How Top Investors Make Money Buying Penny Stocks
So you’re ready to start investing but don’t have tens of thousands of dollars to invest in shares of Facebook or Twitter. You may want to look at penny stocks. Before you dive right in, it’s good to know some tricks of the trade.
It’s also essential to understand the risks and how to avoid them as best as possible. Unlike the typical blue-chip companies like Apple (NASDAQ: AAPL) or General Motors (NYSE: GM), penny stocks allow people to buy more shares with less money to gain leverage based on small moves in price. If Apple stock jumps 5 cents, it doesn’t mean much. But if one of the penny stocks under $1 makes that type of move, you’re looking at a pop of 5% or more relatively quickly.
What Are Penny Stocks?
The term “Penny Stock” is defined as a stock that trades under $5 per share. Popular opinion might assume that these equities are only traded Over-the-Counter on the OTC market. However, there are hundreds of stocks under $5 traded on major exchanges like the New York Stock Exchange and the NASDAQ.
Penny Stocks Are Usually Smaller Company Stocks
Penny stocks are usually associated with smaller-sized companies, many of which could be considered start-ups. Because of this, investors could have trouble finding stocks with high levels of liquidity. This means that there is a lower trading volume for many penny stocks.
This can make for a tough time when it comes to selling stocks to take your profit. Investors may also have difficulty finding a stock price that accurately reflects the current market for a stock. It’s always important to keep this in mind before deciding to buy a penny stock.
On the other side of this coin, these small companies can become market leaders or, at least, formidable competitors. For instance, during the early days of the COVID pandemic, a small company called Novavax (NASDAQ: NVAX) was working on an influenza treatment candidate. They then flipped the switch on a potential coronavirus vaccine. Investors saw shares surge from under $5 to over $300.
Penny stocks can also include companies that’ve been beaten down. Thanks to the “Ape” movement, many of these were uncovered and brought to the masses. Most notably, AMC Entertainment (NYSE: AMC) and GameStop (NYSE: GME) were two that exploded from levels below $5 to over $480 in the case of GME stock. It’s important to note that this isn’t the norm, but it is possible under the right circumstances.
Finding The Best Penny Stocks To Buy
Now that you know what penny stocks are, it’s time to start formulating your plan of attack. Since these stocks can be very risky investments and highly volatile, you need to trade smart. Know what to look for to see what makes a penny stock a potential moneymaker. Note that these are not guarantees, but they are good rules to keep in mind.
Characteristics Of Penny Stocks That Could Make You Money:
1. The Company Should Have Substantial Assets
Novice investors may come across skyrocketing penny stocks, but many of these can be “fly by night” schemes. These companies will typically have little to no assets or cash and boatloads of debt. When it comes to making money with penny stocks, look for companies that have substantial assets. They will be more likely to have a real business plan in place and look to grow the company rather than pump shares into the market.
2. The Company Should Have A Plan
If you come across a penny stock with little or no news, very few financial documents, and a limited amount of information, beware. It’s important to look for penny stocks whose companies have significant public information. This should outline the corporate strategy, growth plan, significant milestones, and more to show that this is a real company.
3. Beware of Overly Optimistic Projections [But Don’t Ignore Them]
You don’t see large-cap companies like Netflix or Disney “expecting to increase revenue by 40,000% next quarter.” Likewise, beware of companies releasing news that is too good to be true. Instead, utilize the two points above to help deduce the truth behind any corporate guidance. If it sounds overly optimistic, it could very well be the case. This doesn’t mean you can’t use such headlines to your advantage.
Specifically for day traders, speculation on optimistic company updates can act as short-term catalysts for day-to-day moves in the stock market. Today, retail traders are becoming a larger piece of the pie and, as a result, have leaned on “playing the speculation” more than relying on fundamentals. Again, this is for day trading, specifically. If you’re investing in penny stocks (or any stock), fundamentals should play a role in your long-term outlook.
6 Ways To Find Good Penny Stocks To Trade
If you want to trade penny stocks successfully, you need to find the best stocks with the highest probability of making a big move. Some traders will look for solid fundamentals, but most traders will rely on technical penny stock scanners to track irregularities in the market.
If you are building your penny stock scanner, you’ll want to include at least one of these parameters:
1. Share Float
This refers to the total number of shares in the publicly traded float or market. This includes everything in retail shareholder circulation. The figure is calculated by removing the shares held by insiders/employees from the overall outstanding shares. In general, the lower the float, the lower the number of shares that are trading at any given time. Higher levels of buying interest could drive prices up quickly.
2. Scan For Penny Stock News
Watch for companies that are making announcements. Penny stock news can become an active catalyst to push stock prices higher on company optimism.
3. Penny Stock Volume Scan
Look for companies with higher relative trading volumes. Traditionally, the higher the relative volume, the more traders will be watching and trading specific penny stocks. This means plenty of liquidity to enter and exit a trade.
4. Short Squeeze Penny Stocks
Like low float penny stocks, stocks with higher short interest can also move quickly. Volatility plays a large role as a result. AMC stock and GME are clear examples of what can happen when stocks squeeze. The first thing to identify is stocks that many traders shorting.
What is shorting anyway?
When someone shorts a stock, they take a bet against it, and to profit from that bet, they’ll borrow shares from their broker, sell those shares into the market, then when the stock drops far enough, they’ll repurchase the shares at the lower price and return them to the broker. The profit is made in the difference in the price at which the shares were sold and repurchased. No matter what, the amount of borrowed shares needs to get returned.
So what’s a short squeeze?
When there’s a short squeeze, anyone shorting loses money. They are forced to buy back stock at higher prices to return their “loan” to the broker. This buying paired with short covering creates a unique situation where prices explode. This is more beneficial to short-term traders than investors. But if that’s you, it’s something to be aware of.
5. Penny Stocks With Unusual Options Volume
New traders might not know that even though penny stocks are already cheap, many have options to trade as well. Looking for stocks with unusual options activity can help shed light on sentiment. There aren’t any guarantees that heavy Call volume means a stock will explode or heavy Put volume is a sign an implosion is coming. But, in most cases, unusual options activity has been used to understand what “smart money” is thinking about specific penny stocks. If you are new to options, check out our article, “Trading Options 101: A Beginner’s Guide.“
6. Penny Stocks With Insider Trading
Insider trading doesn’t have to always be a “swear” word in the stock market. In fact, every investor can legally identify insider buying or selling by taking a few extra steps. Looking for things like Form 4s and Schedule 13s is a way to find insider and hedge fund trading activity in specific stocks. Like options volume, there’s no guarantee that insider buying means a stock will rise and vice versa for insider selling. However, it has been used to gauge sentiment and, as a result, remains a catalyst for speculative trading.
You’re Ready To Make Money With Penny Stocks
Having a good gauge of your risk tolerance and knowing the basics of penny stocks will put you at an excellent starting point to begin trading. If this sounds like the right choice for you, your next step is to find the best broker and make your first trade. Always keep your strategy and unique trading rules in mind to avoid taking significant losses and capitalize on big gains.
The post How To Make Money With Penny Stocks appeared first on Penny Stocks to Buy, Picks, News and Information | PennyStocks.com.nasdaq equities stocks pandemic coronavirus penny stocks otc vaccine treatment
FTSE 100 gains as commodity-linked stocks bounce back
The commodity-heavy FTSE 100 gained 0.4%, while mid-cap FTSE 250 index inched up 0.3% UK’s FTSE 100 gained on Monday, as an easing of COVID-19 restrictions…
The commodity-heavy FTSE 100 gained 0.4%, while mid-cap FTSE 250 index inched up 0.3%
UK’s FTSE 100 gained on Monday, as an easing of COVID-19 restrictions in China brought relief to commodity prices, lifting shares of major oil and mining companies.
As of 0704 GMT, the commodity-heavy FTSE 100 gained 0.4%, while mid-cap FTSE 250 index inched up 0.3%.
The risk sentiment improved after a Wall Street rally late last week and a rebound in copper and iron ore prices on Monday, boosted by an easing COVID-19 restrictions in Shanghai and relaxed testing mandates in several Chinese cities.
The burst of global enthusiasm for equities has put a spring in the step of the FTSE 100 at the start of the week, Hargreaves Lansdown analyst Susannah Streeter said.
Mining stocks led gains on the FTSE 100 index, with Anglo American, Rio Tinto and Glencore rising more than 3%, after Group of Seven leaders pledged to raise $600 billion private and public funds in five years to finance needed infrastructure in developing countries.
It is hoped this scheme, seen as a counter to China’s Belt and Road Initiative, will set off a spurt of spending and demand for commodities around the world, Streeter added.
Among individual stocks, CareTech surged 20.8% after the UK-based provider of care and residential services agreed to be acquired by a consortium led by Sheikh Hoidings in an 870.3 million pounds ($1.07 billion) deal.
Carnival Corp jumped 5.6%, extending its Friday gains after the leisure travel company forecast a positive core profit for the current quarter despite surging costs.
London-listed shares of Rio Tinto added 2% after a U.S appeals court ruled that the federal government may give the UK copper miner a right to lands in Arizona.
BAE Systems inched up 0.4% after the defence company received a $12 billion contract from the U.S Department of Defence.
The Depopulation Of Taiwan
The Depopulation Of Taiwan
Authored by Igor Chudov via Igor’s Newsletter,
This is a continuation of my post from yesterday about a massive…
This is a continuation of my post from yesterday about a massive 13% decline in births in Germany. Such a decline is a nine-sigma event, meaning that it is so unlikely to occur by chance, that it would naturally happen as rarely as an asteroid striking the Earth.
My article explored several more locales (UK, North Dakota, and Switzerland).
But no other place stands out as much as Taiwan does.
23% Drop in Birth Rate in Taiwan
According to a Taiwan government report, the birth rate dropped by 23.24% in May 2022, compared to May 2021.
I inputted historical birth rate data from Macrotrends for the years 2009-2021, and added the year 2022 as year 2021 adjusted down by 23.24%. Obviously, 2022 is not over and the number of Taiwanese babies to be born this year (or during the next 12 months) is unknown. So the chart below is an illustration of what would happen in the next 12 months if the 23.24% drop stays constant.
When expressed in “sigmas”, units of standard deviation, the 23.24% drop in the birth rate in Taiwan is a 26-sigma event!
This is can be described as “unimaginable” in terms of the likelihood of happening due to random chance.
The Wolfram-Alpha illustration of likelihood by sigma only goes to ten-sigma. They thought that it would be pointless to show more sigmas. Except a 26-sigma drop in birth rate just happened in Taiwan.
What Happened In Taiwan?
Health experts are quick to blame Covid for all sorts of health problems afflicting those they advised to vaccinate. It is not the vaccine, they say, it is Covid. We tried to protect you with the vaccine, they would always insist. But you got Covid anyway, thanks to the evil antivaxxers, and your problems are due to Covid — that’s their explanation.
We know for certain, though, that the drop in birth rate in Taiwan is NOT due to Covid. Yes, Taiwan is suffering from a terrible COVID pandemic right now (despite being 91% vaccinated), however, Covid in Taiwan only started around April 21 of 2022, and could not impact May birth rates much.
To see what could cause the extreme drop in births, go back 9 months from May 2022, so to September 2021.
Taiwan was a poster child for successful vaccination. 91% of all Taiwanese residents received a vaccine dose. By October 1, 2021, 56% of ALL people of Taiwan received Covid vaccines.
They got a fairly usual mix of “safe and effective” AstraZeneca, Moderna, and Pfizer vaccines.
People of Taiwan got their shots, felt assured that Covid-19 stops with every vaccinated person, and moved on with their lives.
I doubt that the people of Taiwan noticed anything at the end of September. They knew for sure that their vaccines were safe and effective and would not affect their sperm or pregnancies. So they proceeded with family plans just as before, trying to make babies on purpose, or partying and having fun and getting pregnant accidentally, just as people do elsewhere.
Except for 9 months later, they only gave birth to 77% of the number of babies expected.
I hope that the people of Taiwan will start asking their authorities: what is happening to us?
A Glimmer of Hope
If you are like me, and you like babies, children, and grandchildren, you are probably upset by now and are wondering what will happen to all of us. Let me mention a possibility that, although unlikely in my opinion, may make this drop in birth rates temporary.
Covid vaccines are known to “disrupt the menstrual cycle” and lower sperm counts. It is possible that some women, for a period of several months, could not conceive and become pregnant due to these disruptions. Because all Taiwanese women were vaccinated at almost the same time, those disruptions created a precipitous drop in birth rates.
My hope, as someone who likes people, is that this will turn out to be the case. However, in my opinion, we will likely see the opposite, and reductions in birth rates will be permanent. Why? Because vaccinating young people was a crime. It was not a mistake. Let me not explain why, in this article.
Crimes like this are NOT perpetrated to achieve a two-month drop in birth rates. Criminals of such nature who gave young people shots that they did not need, for sinister reasons, go for the jugular. Of course, not all people participating in vaccination campaigns were having such sinister intentions. But it is possible that some persons on top had criminal motives that they did not disclose.
Again, I hope that the preceding paragraph will turn out to be unfounded. I was, and am, against any of that happening, do not support anything that is happening in Taiwan, and I am very worried.
Time will tell.
They Told Us it is Safe
This fact check from Dec 5, 2020 says that the vaccine is definitely safe for pregnancy “because there is no evidence that it is unsafe”. No trial specifically for pregnancy and fertility was conducted. They just lied to us that it is safe — but had no way of knowing.
Hot Penny Stocks to Buy This Week? 3 For Your List
Can these penny stocks continue to climb
The post Hot Penny Stocks to Buy This Week? 3 For Your List appeared first on Penny Stocks to Buy, Picks, News…
3 Hot Penny Stocks to Add to Your Watchlist This Week
Let’s face it, finding penny stocks to buy is not easy. And over the past few months, it has been increasingly challenging to make money with small caps. Now, while this may be true, not every investor has lost money in that time. Rather, to make money with penny stocks, traders have to be extra careful and know what penny stocks to buy.
There are a few key things to look for when finding penny stocks to buy. The first is a reason that it may move. When penny stocks shift up or down, there are numerous causes. But, most penny stocks will have a fundamental reason to do so. This could be a new product launch, an FDA approval, or anything else that would increase demand for the company’s shares.
The second is liquidity. This is key because you need to be able to buy and sell penny stocks quickly. If there is not enough liquidity or shares traded in a day, you may be stuck with your penny stock.
The last is price. You obviously want to buy penny stocks that are cheap, but you also want to make sure that the company is valued appropriately. This means looking at its fundamentals and understanding why it is at its given value. With all of this in mind, let’s take a look at three penny stocks to add to your watchlist this week.
3 Penny Stocks to Watch This Week
- Visionary Education Technology Holding Group Inc. (NASDAQ: VEDU)
- RLX Technology Inc. (NYSE: RLX)
- Uranium Energy Corp. (NYSE: UEC)
Visionary Education Technology Holding Group Inc. (NASDAQ: VEDU)
One of the largest gainers of the day on June 27th was VEDU stock. By EOD, shares of VEDU had shot up by more than 30% with an over 5% after-hours gain. And, in the past five days, shares of VEDU stock have exploded by over 120%. These major gains come alongside no recent news. The most recent news however, came on May 19th.
On the 19th, the company announced the closing of its $17 million firm commitment IPO. This came with 4.25 million shares at a public offering price of $4 per share. For some context, Visionary Education is a Canadian based company offering high-quality education resources to students around the world. While it has fallen from its IPO price to around $2.60, its recent bullish momentum is exciting without a doubt. So, with all of this in mind, will VEDU be on your penny stocks watchlist or not?
RLX Technology Inc. (NYSE: RLX)
With over 3% in gains during trading and after hours on June 27th, RLX is another penny stock that investors are watching right now. In the past month, we’ve seen shares of RLX climb by more than 19%, which is no small feat. The most recent news from the company came in the form of its unaudited Q1 2022 financial results. In the results, the company saw its net revenue decline slightly, however, it stated that this was due to the pandemic.
“During the first quarter of 2022, we continued to focus on our core strategy and maintain our leading position in the industry while preparing for the anticipated regulatory changes.
As the new regulatory framework has come into effect and detailed implementation measures have been released, we are proactively adapting our business to the new market environment by applying for the relevant licenses and developing qualified products that meet the requirements of the most recent national standards.”The CEO of RLX Technology, Ms. Ying Wang
While this news was not ideal, it did bring shares of RLX stock down to lower levels. And as a result, its recent bullish momentum could be due to RLX being at value prices. Whether this makes RLX worth adding to your list of penny stocks to buy, is up to you.
Uranium Energy Corp. (NYSE: UEC)
On June 27th, UEC stock saw modest gains however, it did post abnormally high volume. And because of this, many investors are keeping a close eye on it right now. The most recent update from the company came on June 22nd, when it announced its entrance into a definitive agreement with UEX Corporation. It stated that it would acquire all of the outstanding shares of UEX with a C$5 million private placement.
This is big news for the company and should add to its large and growing business. If you’re not familiar, Uranium Energy is a uranium mining company. And, recently, we’ve seen heightened interest in alternative energy penny stocks. And although UEC is highly volatile, it is an interesting penny stock to watch. With this considered, does UEC deserve an addition to your watchlist or not?
Which Penny Stocks Are You Buying Right Now?
After a relatively flat day of trading, investors are looking for the best penny stocks to buy this week. That involves understanding what factors are impacting the stock market, and how we can use those to benefit.
Although trading is not easy, there are plenty of ways to find penny stocks to buy in 2022. So, with this in mind, which penny stocks are you buying right now?
The post Hot Penny Stocks to Buy This Week? 3 For Your List appeared first on Penny Stocks to Buy, Picks, News and Information | PennyStocks.com.nasdaq stocks pandemic penny stocks fda small caps
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