Looking for hot penny stock picks? Salivating over the latest penny stocks to watch? Wake up. The best penny stocks to watch should be determined by you and only you. Any outside resources should only provide you additional data which you consider along with your own technical analysis and due diligence. Analyzing trading and pricing patterns and researching company backgrounds will lead you to your own legitimate and profitable list of penny stocks to watch.
[ad name=”300×250″]There are a number of penny stock websites, penny stock forums and so-called penny stock newsletters which hype hot penny stock picks and penny stocks to watch for. In many cases, the lists are empty and useless. But even for those few resources which have some legitimate value, you should still only use them to further inform your own analysis. The moment you start to rely on others to make your picks for you or do the work for you is the moment you lose. So whether the advice originates as micro cap stock information or hot insider information on nano stocks, ultimately you must still exercise your own due diligence and conduct your own technical analysis.
Lists of Hot Penny Stocks to Watch Are Often Part of a Fraud Scheme
Anytime you find a list of hot penny stocks to watch on the Internet, you can rest assured that list of penny stocks to watch is one of two things (if not both at the same time): 1) Too old to matter anymore as the penny stock market moves fast or 2) Put up on the Web by someone trying to make a buck off you with one of the scams popular in this market.
This second motivation can be more subtle than you realize. I’m sure some people reading this penny stock guide probably read number 2 up there and assumed that the person “trying to make a buck off you” would be selling you something directly. This isn’t always the case. In fact, often times they make their money by promoting so-called hot penny stocks only to inflate the value of the stock so they can then sell it once it is pumped.
This is called the pump and dump and it is technically illegal. Unfortunately it can be very difficult for the SEC (Securities and Exchange Commission) to track down pump and dump schemes because they can appear so generic and innocent on the surface. This is also the same reason these schemes remain so effective. But make no mistake about it: it is fraud and those implementing the schemes are preying upon new stock traders and lazy stock traders seeking over-night riches.
One mistake people make is that they think, “Oh, well if they’re pumping it maybe I can go along for the ride and dump it with them.” If you think this way at all, it is painfully obvious you’re new to penny stock trading. Penny stocks are infamously illiquid. What this means, on a practical level, is that they often don’t trade easily. And that means that just because you hold a stock and put in an ask (to sell it), doesn’t mean it will actually sell. In most cases, when the individuals and organizations promoting and propagating pump and dump schemes decide to dump, it will be too late for you to save your butt. By the time you’re able to sell it, or even execute the order to sell it, the price of your penny stock will have tanked.
Penny Stock Investing Requires Due Diligence and Real Technical Analysis
The only place you should find top penny stocks to watch today are the Pink sheets and the OTCBB (Over-the-Counter Bulletin Board). While a few penny stocks may be found on the New York Stock Exchange and NASDAQ, a majority of your time trading penny stocks will be engaged in studying stocks listed on the OTC Market.
With the OTC listings as a base, you then must exercise real technical analysis to find good penny stocks to watch. Technical analysis is the process of searching for archetypal patterns within the stock’s pricing data. You need to familiarize yourself with established patterns like the Head and Shoulders, the Double Top Reversal Pattern and Moving Averages. Furthermore, you should study separate technical analysis theories such as Elliot Wave Theory, Dow Theory and Candlestick Charting.
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While you don’t have to become a hardcore market technician, you need to understand these fundamental stock analysis theories and the stock market software required to obtain the data to implement such analysis.
Additionally, you need to exercise your own due diligence. This means taking the time to research and verify the legal and financial data on the stock’s company. This takes extra care when researching penny stocks because verified public data is often scarce compared to major stocks or corporations.
Applications and online brokers can provide stock filters to help you key in on stocks fulfilling certain patterns and behaviors which indicate penny stocks to watch, but you should never rely on a stock filter to do all the work for you nor should you put blind faith into either the filter or emerging pricing pattern by itself.
Over time, I will begin teaching some of these specifics, but the primary purpose of this article is to dissuade you from getting suckered into laziness. No magic “stock robot” or single newsletter will provide a magical trail to your mythical pot of gold. Ultimately you need to do the work to succeed.
The Only Place Where You Should Accept Penny Stock Recommendations
When you first get started, I encourage you to work with an established full service broker. These well-known and reputable organizations can help you learn the ropes and provide real actionable advice and penny stock tips. You will pay for that advice, but that is the cold reality of this business. You can view my broker recommendations here: Top Online Brokers
As they inform you on your decisions, you will learn and grow. Perhaps once you really know what you’re doing you can graduate to trading with a discount broker. But if you’ve come here looking for a list of penny stocks to watch, I’m here to tell you that the only place you should rely on such a list of penny stocks to watch is when it is provided by your full service broker. It should also come with a series of questions and variables you need to consider before acting on any stock in that list.
How to Find Penny Stocks to Watch: Hard Work
Try to remember this quote from Thomas Edison each time you find yourself succumbing to the allure of a so-called list of hot penny stocks to watch:
“Opportunity is missed by most people because it is dressed in overalls and looks like work.”
— Thomas Edison
Ultimately, you have to be willing to roll your sleeves up and engage in some research and analysis to find hot penny stocks to watch. If you’re not, you may be wasting your time with penny stock trading. This is not a get-rich-quick scheme. This is a the real world trading real money and more people lose money than get rich. To earn your penny stock fortunes, be prepared to study and practice.
If you’re just beginning and you’re disappointed that I didn’t just give you stocks to go buy, I suggest you read one or both of the following guides: How to Trade Penny Stocks and Where to Buy Penny Stocks
I hope this helps you find your own penny stocks to watch and thank for reading Penny Stock Trading.
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