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4 Reasons You’re Not Making Money With Penny Stocks

How to make money with penny stocks.
The post 4 Reasons You’re Not Making Money With Penny Stocks appeared first on Penny Stocks to Buy, Picks, News…

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Have you ever been curious about penny stocks or how to make money with them? If you’ve seen any stock market game or movie about trading, I’m sure the topic has piqued your interest. It seems easy, right? Just load up some cash into some mobile brokerage account, and you can start making money with penny stocks. They’re only cheap stocks, right? How hard could it be?

The rise of meme stocks like AMC Entertainment (NYSE: AMC) and GameStop (NYSE: GME) did something interesting to the stock market; it brought a whole new type of “investor” into the fold. The idea of “buy and hold” was thrown out the window in exchange for capitalizing on short squeezes and breakout stocks. It also put penny stocks at the center of the spotlight. But in this case, it wasn’t about how these cheap stocks could jump in a single day; it was the potential of a much bigger move.

Let’s look at the AMC and GME examples.

GME Stock Explodes 16,967%

The GameStop saga began much earlier than 2021. In fact, GME stock was a frequent mention on PennyStocks.com over the last few years. One of the most significant developments came when “Big Short” investor Michael Burry actually got behind GameStop. Jumping ahead to the meme stock explosion and the sub-$5 GME was now trading at a modest $20. In a movement more akin to the movie, The 300, traders locked down during the pandemic found a common goal: fight against hedge funds that had depressed certain “underdogs” for so long. Ultimately, GME stock would explode to highs of $483 in a move of nearly 17,000% in less than a year.

AMC Stock Surges 3,700%

Thanks to the attention that GME stock received, the new “Ape Army” was on the hunt for the next heavily shorted, all-but-forgotten penny stock to buy. In early 2021, AMC stock was, by all accounts, considered a penny stock. It met the standard sub-$5 definition and was relatively illiquid. The underlying company had also taken its licks in the market. That was due to a floundering business at the time, thanks to COVID restrictions.

But some saw the potential in the company, including our writers. We pointed AMC out in November 2020 as one of the top epicenter penny stocks to watch before the new year. Fast-forward and AMC stock became one of the leading meme stocks at the center of interest. This was for thousands of traders taking their first step into the stock market. Shares of AMC stock surged from under $2 to highs of over $72 in one of the most epic rallies in recent history.

penny stocks to buy sell AMC Entertainment AMC stock chart

4 Reasons Why You’re Not Making Money With Penny Stocks & How To Change That!

So, if AMC stock theoretically turned $1,000 into $37,000 and GME stock took the same $1,000 and made it nearly $170,000, why aren’t you making money with penny stocks?

1. You’re Trying To Find Duplicate

So many new traders started by taking advantage of the moves in AMC and GME stock. It was a global phenomenon that brought in all the appeal, including scandal, money, & a David and Goliath type storyline. When hundreds of thousands or even millions of investors focus on a single issuer, these moves can happen. But it’s a rare occurrence. Sure, you have your groups of traders agreeing on a similar trade idea at times. But what we saw happen with the Ape movement was an outlier.

One of the first reasons that new traders aren’t making money with penny stocks is that they’re trying to find “the next GME” or “the next AMC” instead of learning how to trade. The fact is, there are plenty of penny stocks that explode 50%, 100%, or even over 300% within a matter of days or weeks. But all-too-many new traders see a position up 300% and think, “Well, this is it. THIS is the next GME; I found it,” only to see share prices implode soon after. The vast majority of penny stocks are young companies or ones looking to get on their feet. They are priced lower for various reasons.

The Solution: As a trader, understanding how to set profit targets, stop losses, and manage risk is the first step in removing this issue from your trading strategy. Have a plan, execute the plan, and have backstops in place to protect your capital if things don’t go as planned.

2. Catching The “Whole Move” In Penny Stocks

Like a good piece of fruit you’re trying to juice, you want to get every drop out of it. Rarely does this happen. There’s always some liquid left in the rind. Like fruit juice, catching the entire move in penny stocks tends to result in more failed trades than winning ones. At most, attempting to “top tick” your sale or “bottom tick” your entry will force you to deviate from your original plan.

Sure, technically, the GME and AMC stock moves were between$3,700 and nearly $17,000 from low to high on the charts. But the chances of catching the entire move are low. Another reason why you might not be making money with penny stocks is you hold too long, hoping to see the whole move.

Penny Stocks Get Big Boost From r/WallStreetBets & Reddit Buying Spree

The Solution: Clearly outline your trading game plan ahead of time. Set your price targets for selling shares, set your stop-losses, and, most importantly, STICK TO THE PLAN! Not catching the entire move is fine as long as you remember why you’re trading in the first place: to make money and repeat the process. At the end of the day, if you “sell too early,” as long as the underlying trend is strong, there should be more opportunities to re-enter a trade if you choose.

3. Letting Emotions Dictate Your Strategy

We’re talking about penny stocks here. You can buy them for as little as $0.0001 per share or as much as $5 if you stick to the definition of penny stocks. In all cases, small moves in price equate to much more substantial percentage changes than higher-priced stocks. So it’s not hard to imagine that if you’re up 30% on a penny stock, “just a few more pennies” could put you up 40% or 50%. When emotions dictate your strategy and force you to deviate from your original plan, that’s when things can go south. Holding out for another 10%, in this example, could end up costing you much more based on how volatile stocks are. Look at a recent example of how volatility can quickly turn a winning trade into a break-even or losing trade.

In late-2021, shares of Remark Holdings (NASDAQ: MARK) exploded from under $1 to over $6 within a 2-day timeframe. But, by day #3, MARK stock was already back at $2. Letting emotions take over, thinking “this is the next GME,” likely caused more losses than gains. The traders who made the most money from MARK stock traded according to their original plan. Was the trend strong? Ultimately, the answer to that question is “no,” but those holding out, thinking $6.70 wasn’t “the top yet,” more than likely found out exactly why emotion has no place in trading.

penny stocks to buy sell Remark Holding MARK stock chart

You even had former penny stocks like Novavax (NASDAQ: NVAX) and FuelCell Energy (NASDAQ: FCEL) go on epic rallies but ultimately plummet from their record highs.

The Solution: STICK TO YOUR PLAN! Most of the time, a clear, defined strategy will yield more consistent results than “a gut feeling.” Will there be outliers? Definitely, and you’ve got to be alright knowing that you might catch the entire move in a penny stock. Again, if a trend is truly strong, it will give multiple opportunities to profit.

4. You Don’t Know How To Trade Penny Stocks (or other stocks)

Let’s face it if you saw the moves that AMC stock and GME stock made, your outlook on trading is much different from those who’ve been in the market for years. These massive breakouts brought a different mentality to the market that was more about “betting” on winning trades than identifying them. If that sounds like you, that’s ok (for now). The market doesn’t have to be one big bet; you can become consistently profitable and don’t need to have an AMC-type move to do it.

The Solution: Learn the basics, understand technical analysis, learn how different types of news impacts the market, and know what various SEC filings mean and how to use them. There are many ways to make money with penny stocks, just like there are plenty of ways to do other professions. But the first step is learning how to do so the right way.

Take a step back and learn. Believe it or not, trading can be a full-time profession and is one for thousands of market participants. Like any profession, learning basic and advanced techniques is key to making it to the top of your game. Getting lucky is one thing but becoming consistent in your trading is another; luck doesn’t have a place.

Should You Trade Penny Stocks?

That depends on your goals and your risk tolerance. Penny stocks are not suitable for everyone, but they can be a great way to make money if you’re willing to take on the risks. Do your research and understand the risks before you trade penny stocks. And never invest more than you can afford to lose. Penny stocks are risky, but they can be a great way to make money if you know what you’re doing.

If you are interested in learning more about penny stocks and the stock market as a whole, then you need to check out True Trading Group, the fastest growing & highest-rated online premium educational platform available today.

True Trading Group offers a 7-day Trial of its platform for a 1-time, non-auto renew payment of just $3! To Learn More Click Here.

The post 4 Reasons You’re Not Making Money With Penny Stocks appeared first on Penny Stocks to Buy, Picks, News and Information | PennyStocks.com.

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Fighting the Surveillance State Begins with the Individual

It’s a well-known fact at this point that in the United States and most of the so-called free countries that there is a robust surveillance state in…

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It’s a well-known fact at this point that in the United States and most of the so-called free countries that there is a robust surveillance state in place, collecting data on the entire populace. This has been proven beyond a shadow of a doubt by people like Edward Snowden, a National Security Agency (NSA) whistleblower who exposed that the NSA was conducting mass surveillance on US citizens and the world as a whole. The NSA used applications like those from Prism Systems to piggyback on corporations and the data collection their users had agreed to in the terms of service. Google would scan all emails sent to a Gmail address to use for personalized advertising. The government then went to these companies and demanded the data, and this is what makes the surveillance state so interesting. Neo-Marxists like Shoshana Zuboff have dubbed this “surveillance capitalism.” In China, the mass surveillance is conducted at a loss. Setting up closed-circuit television cameras and hiring government workers to be a mandatory editorial staff for blogs and social media can get quite expensive. But if you parasitically leech off a profitable business practice it means that the surveillance state will turn a profit, which is a great asset and an even greater weakness for the system. You see, when that is what your surveillance state is predicated on you’ve effectively given your subjects an opt-out button. They stop using services that spy on them. There is software and online services that are called “open source,” which refers to software whose code is publicly available and can be viewed by anyone so that you can see exactly what that software does. The opposite of this, and what you’re likely already familiar with, is proprietary software. Open-source software generally markets itself as privacy respecting and doesn’t participate in data collection. Services like that can really undo the tricky situation we’ve found ourselves in. It’s a simple fact of life that when the government is given a power—whether that be to regulate, surveil, tax, or plunder—it is nigh impossible to wrestle it away from the state outside somehow disposing of the state entirely. This is why the issue of undoing mass surveillance is of the utmost importance. If the government has the power to spy on its populace, it will. There are people, like the creators of The Social Dilemma, who think that the solution to these privacy invasions isn’t less government but more government, arguing that data collection should be taxed to dissuade the practice or that regulation needs to be put into place to actively prevent abuses. This is silly to anyone who understands the effect regulations have and how the internet really works. You see, data collection is necessary. You can’t have email without some elements of data collection because it’s simply how the protocol functions. The issue is how that data is stored and used. A tax on data collection itself will simply become another cost of doing business. A large company like Google can afford to pay a tax. But a company like Proton Mail, a smaller, more privacy-respecting business, likely couldn’t. Proton Mail’s business model is based on paid subscriptions. If there were additional taxes imposed on them, it’s possible that they would not be able to afford the cost and would be forced out of the market. To reiterate, if one really cares about the destruction of the surveillance state, the first step is to personally make changes to how you interact with online services and to whom you choose to give your data.

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Stock Market Today: Stocks turn higher as Treasury yields retreat; big tech earnings up next

A pullback in Treasury yields has stocks moving higher Monday heading into a busy earnings week and a key 2-year bond auction later on Tuesday.

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Updated at 11:52 am EDT U.S. stocks turned higher Monday, heading into the busiest earnings week of the year on Wall Street, amid a pullback in Treasury bond yields that followed the first breach of 5% for 10-year notes since 2007. Investors, however, continue to track developments in Israel's war with Hamas, which launched its deadly attack from Gaza three weeks ago, as leaders around the region, and the wider world, work to contain the fighting and broker at least a form of cease-fire. Humanitarian aid is also making its way into Gaza, through the territory's border with Egypt, as officials continue to work for the release of more than 200 Israelis taken hostage by Hamas during the October 7 attack. Those diplomatic efforts eased some of the market's concern in overnight trading, but the lingering risk that regional adversaries such as Iran, or even Saudi Arabia, could be drawn into the conflict continues to blunt risk appetite. Still, the U.S. dollar index, which tracks the greenback against a basket of six global currencies and acts as the safe-haven benchmark in times of market turmoil, fell 0.37% in early New York trading 105.773, suggesting some modest moves into riskier assets. The Japanese yen, however, eased past the 150 mark in overnight dealing, a level that has some traders awaiting intervention from the Bank of Japan and which may have triggered small amounts of dollar sales and yen purchases. In the bond market, benchmark 10-year note yields breached the 5% mark in overnight trading, after briefly surpassing that level late last week for the first time since 2007, but were last seen trading at 4.867% ahead of $141 billion in 2-year, 5-year and 7-year note auctions later this week. Global oil prices were also lower, following two consecutive weekly gains that has take Brent crude, the global pricing benchmark, firmly past $90 a barrel amid supply disruption concerns tied to the middle east conflict. Brent contracts for December delivery were last seen $1.06 lower on the session at $91.07 per barrel while WTI futures contract for the same month fell $1.36 to $86.72 per barrel. Market volatility gauges were also active, with the CBOE Group's VIX index hitting a fresh seven-month high of $23.08 before easing to $20.18 later in the session. That level suggests traders are expecting ranges on the S&P 500 of around 1.26%, or 53 points, over the next month. A busy earnings week also indicates the likelihood of elevated trading volatility, with 158 S&P 500 companies reporting third quarter earnings over the next five days, including mega cap tech names such as Google parent Alphabet  (GOOGL) - Get Free Report, Microsoft  (MSFT) - Get Free Report, retail and cloud computing giant Amazon  (AMZN) - Get Free Report and Facebook owner Meta Platforms  (META) - Get Free Report. "It’s shaping up to be a big week for the market and it comes as the S&P 500 is testing a key level—the four-month low it set earlier this month," said Chris Larkin, managing director for trading and investing at E*TRADE from Morgan Stanley. "How the market responds to that test may hinge on sentiment, which often plays a larger-than-average role around this time of year," he added. "And right now, concerns about rising interest rates and geopolitical turmoil have the potential to exacerbate the market’s swings." Heading into the middle of the trading day on Wall Street, the S&P 500, which is down 8% from its early July peak, the highest of the year, was up 10 points, or 0.25%. The Dow Jones Industrial Average, which slumped into negative territory for the year last week, was marked 10 points lower while the Nasdaq, which fell 4.31% last week, was up 66 points, or 0.51%. In overseas markets, Europe's Stoxx 600 was marked 0.11% lower by the close of Frankfurt trading, with markets largely tracking U.S. stocks as well as the broader conflict in Israel. In Asia, a  slump in China stocks took the benchmark CSI 300 to a fresh 2019 low and pulled the region-wide MSCI ex-Japan 0.72% lower into the close of trading.
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Forget Ron DeSantis: Walt Disney has a much bigger problem

The company’s political woes are a sideshow to the one key issue Bob Iger has to solve.

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Walt Disney has a massive, but solvable, problem.

The company's current skirmishes with Florida Gov. DeSantis get a lot of headlines, but they're not having a major impact on the company's bottom line.

Related: What the Bud Light boycott means for Disney, Target, and Starbucks

DeSantis has made Walt Disney (DIS) - Get Free Report a target in what he calls his war on woke, an effort to win right-wing support as he tries to secure the Republican Party nomination for president. 

That effort has generated plenty of press and multiple lawsuits tied to the governor's takeover of the former Reedy Creek Improvement District, Disney's legislated self-governance operation. But it has not hurt revenue at the company's massive Florida theme-park complex.  

Disney Chief Executive Bob Iger addressed the matter during the company's third-quarter-earnings call, without directly mentioning DeSantis.

"Walt Disney World is still performing well above precovid levels: 21% higher in revenue and 29% higher in operating income compared to fiscal 2019," he said. 

And "following a number of recent changes we've implemented, we continue to see positive guest-experience ratings in our theme parks, including Walt Disney World, and positive indicators for guests looking to book future visits."

The theme parks are not Disney's problem. The death of the movie business is, however, a hurdle that Iger has yet to show that the company has a plan to clear.

Boba Fett starred in a show on Disney+.

Image source: Walt Disney

Disney needs a plan to monetize content 

In 2019 Walt Disney drew in more $11 billion in global box office, or $13 billion when you add in the former Fox properties it also owns. In that year seven Mouse House films crossed the billion-dollar threshold in theaters, according to data from Box Office Mojo.

This year, the company will struggle to reach half that and it has no billion-dollar films, with "Guardians of the Galaxy Vol. 3" closing its theatrical run at $845 million globally. 

(That's actually good for third place this year, as only "Barbie" and "The Super Mario Bros. Movie" have broken the billion-dollar mark and they may be the only two films to do that this year.)

In the precovid world Disney could release two Pixar movies, three Marvel films, a live-action remake of an animated classic, and maybe one other film that each would be nearly guaranteed to earn $1 billion at the box office.

That's simply not how the movie business works anymore. While theaters may remain part of Disney's plan to monetize its content, the past isn't coming back. Theaters may remain a piece of the movie-release puzzle, but 2023 isn't an anomaly or a bad release schedule.

Consumers have big TVs at home and they're more than happy to watch most films on them.

Disney owns the IP but charges too little

People aren't less interested in Marvel and Star Wars; they're just getting their fix from Disney+ at an absurdly low price. 

Over the past couple of months through the next few weeks, I will have watched about seven hours of premium Star Wars content and five hours of top-tier Marvel content with "Ahsoka" and "Loki" respectively. 

Before the covid pandemic, I gladly would have paid theater prices for each movie in those respective universes. Now, I have consumed about six movies worth of premium content for less than the price of two movie tickets.

By making its premium content television shows available on a service that people can buy for $7.99 a month Disney has devalued its most valuable asset, its intellectual property. 

Consumers have shown that they will pay the $10 to $15 cost of a movie ticket to see what happens next in the Marvel Cinematic Universe or the Star Wars galaxy. But the company has offered top-tier content from those franchises at a lower price.

Iger needs to find a way to replace billions of dollars in lost box office, but charging less for the company's content makes no sense. 

Now, some fans likely won't pay triple the price for Disney+. But if it were to bundle a direct-to-consumer ESPN along with content that currently gets released to movie theaters, Disney might create a package that it can price in a way that reflects the value of its IP.

Consumers want Disney's content and they will likely pay more for it. Iger simply has to find a way to make that happen.

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