The penny stock pump and dump scheme is the longest running pink sheet scheme still in practice today, but it is difficult to control because of the way it works. Since the barrier to day trading has been reduced by advances in computers and internet availability more people are becoming addicted to trading stocks and making money in this market. The newcomers to day trading are often more susceptible to manipulation because they are often following technical trading patterns laid out in books, but even more experienced traders can get caught up in these schemes.
Here’s how the penny stock scheme works: Continue reading
Day trading involves sticking with stocks for the shortest period of time possible to make as many small profits as possible. Day trading often carries a stigma of wild gamblers or genius big shots playing or manipulating a system to make millions, but this usually isn’t the reality of this profession.
In reality the day trader is someone who knows how to make a consistent plan that has proved itself and stick with it. Most day traders prefer highly volatile systems like the options and futures markets, but there is plenty of room in the realm of day trading penny stocks. Here are some reasons you should or shouldn’t day trade penny stocks. Continue reading
Most consider penny stock trading to be the exchange of stocks at a price between $1 and $5 per share. You’ll also see them labeled as micro cap stocks, microcap stocks, nano stocks or even just small cap stocks. But that doesn’t mean there is less risk involved in this market; in fact these stocks generally carry more risk. That’s why it’s a good idea to practice trading before you start investing real money.
Penny stock trading occurs within the OTCBB (Over-the-Counter Bulletin Board) or on the Pink Sheets. So you’ll also find these stocks labeled as OTC stocks (OTC stands for over-the-counter). They tend to represent smaller companies, newer companies or struggling companies. They either haven’t proven themselves enough to list on NASDAQ or the grand New York Stock Exchange (NYSE) or in some cases they’ve been penalized by those exchanges and removed.
There is a common misnomer regarding this type of trading. Continue reading
Interpreting the OTC Market is a crucial component of discerning how to buy penny stocks. A majority of penny stocks aren’t listed on a stock market like NASDAQ or the NYSE but instead on the OTC market (or OTC securities market).
NASDAQ (National Association of Securities Dealers Automated Quotation) controls a little component of the over-the-counter market with the NASDAQ National Market (NNM), but this portion of the OTC Market doesn’t include penny stocks.
Pink OTC Markets, at one time called the National Quotation Bureau (NQB) and colloquially referred to as “Pink Sheets”, operates on the most active component of the OTC market. If you begin earnest and extended penny stock trading, you’ll at some point deal in Pink Sheets. Continue reading
Penny stock trading can be a fun business with great potential, but unfortunately there are a number of scams associated with niche, as well as penny stock fraud. Here we take a serious and professional look at online penny stock trading and aim to provide quality information on this specific market.
Many people get involved in trading penny stocks because they want a way to get rich quick. There is no easy way to get rich quick. There is money to be made in this market, but it doesn’t necessarily come easily. There is a learning curve, and there is plenty of risk.
Comparing penny stock brokers is one good place to start if you are serious about getting into this market. We’ll discuss various online brokers and the differences between the types of brokers. We also explain how to trade penny stocks as well as stock trading software.
This site provides a good look into penny stock trading, providing tips on what to do and advice of what to avoid. Continue reading