Yeah right… hope you knew that was BS from the title. There is no such thing as ultimate Penny Stock Picks from stock promoters. They throw out so much trash they should be garbage men. I want to discuss the best way to trade Penny Stocks. You should never listen to stock promoters. They are paid to manipulate price. Most promoters are blowing hot air. All of the emails they send out promising the moon are bogus. Now you may be thinking “Well the company did come out with news??” Doesn’t matter it is a scam, welcome to the world of penny stocks. They are meant for trades and not investments.
First thing I want to discuss is the usual good trade on a penny stock is going to be off the reversal. Since most penny stocks don’t trend there is usually not going to be a ton of momentum stocks on a daily chart set up. So the best thing to do is take high volume stocks that have sold off really hard to trade.
The best stocks that sell off and give bounces are stocks that have recently announced they are filing bankruptcy, filed bankruptcy, been delisted or send out PR stating that they don’t know if they will have the cash to finance operations.
By finding a stock like this you will usually not have to worry about liquidity. On a low volume penny stock you may find it hard to exit at a reasonable price. You will usually find the spread jacked up 10% or more.
Popular stocks are the best. When Fannie and Freddie Got down listed it was an awesome bounce. You never want to react right away because there will usually be a few days of selling… sometimes even weeks. Let the price stabilize at a bottom and draw a down trend line from the top of the lower highs. When lower lows are not being created and the down trend line gets broken you will usually find massive jumps in price. Everyone and there mom jump on these trades and shorts start covering sending the stock in orbit.
YRCW is a perfect expample. That stock went from the .12’s area all the way to the .40’s in less than a week. BLOKA another perfect example of that happening. These stocks were major players at one point and now they are cheap so they have become traders stocks and momentum will usually carry if these stocks have big volume.
Here is a list of Penny Stocks that are popular amongst traders.
For the best penny stock picks see picksthatmakecents.com and they really have there stuff together when it comes to pink sheet and OTC picks.
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