Begin trading penny stocks

MarketWatch — The allure of penny stocks is simple: But trading penny stocks is also a good way to lose money. So penny-stock trading thrives. With a relatively small investment you can make a nice return if — and this is a big if — the trade works out. Penny stock promoters make sure to attach a disclaimer to their email, Twitter, or Facebook page, and take advantage of this language to embellish and deceive.

Stock touts prey on investors' inflation fears. Penny stocks and their promoters also tend to stay one step ahead of securities regulators, though just last month the Securities and Exchange Commission charged a Florida-based firm, First Resource Group LLC, with penny-stock manipulation.

What are Penny Stocks? How to Get Started with Penny Stocks

Don't buy a penny stock. Even with these clear dangers, some people insist on trading the pennies.

Timothy Sykes, a penny-stock expert who trades both long and short, says you must not believe the penny-stock stories that are touted in emails and on social media websites. Instead, Sykes says, focus on the profitable penny stocks with solid earnings growth and which are making week highs. Penny stocks are sold more than bought — mostly via tips that come your way in emails and newsletters. There is nothing wrong with wanting exposure, but almost all penny newsletters make false promises about their crappy companies.

Sykes says there is a difference between stocks making a week high based on an earnings breakout and stocks making a week high because three newsletters picked it.

Reading the disclaimers at the bottom of the email or newsletter, which the SEC requires them to do, will usually reveal a conflict of interest.

If you make that kind of return with a penny stock, sell quickly. There is no reliable business model or accurate data, so most penny stocks are scams that are created to enrich insiders.

Sykes says large rings of the same people run promotions using different press releases and companies, including the reappearance of a notorious stock manipulator who was first convicted for an email pump-and-dump scheme when he was in high school. Leave shorting penny stocks to the pros.

How to Buy Penny Stocks (for Beginners) - TheStreet

Stick with stocks that trade at least , shares a day. If you trade stocks with low volume, it could be difficult to get out of your position. He also suggests that you trade penny stocks that are priced at more than 50 cents a share. Although it takes more concentration, use mental stops. I aim for 3: If I think a dollar stock has only cents upside 2: Every penny stock company wants you think it has an exciting story that will revolutionize the world.

If you enter the penny stock arena, be cynical, do your own research, and diversify, even if a friends or family member is touting a stock. By using this site you agree to the Terms of Service , Privacy Policy , and Cookie Policy.

Intraday Data provided by SIX Financial Information and subject to terms of use. Historical and current end-of-day data provided by SIX Financial Information.

10 ways to trade penny stocks - MarketWatch

All quotes are in local exchange time. Real-time last sale data for U. Intraday data delayed at least 15 minutes or per exchange requirements. ET LVMH price target raised to EUR from EUR LVMH downgraded to hold at HSBC. Updated Stock market struggles to return to record territory.

La-Z-Boy shares up AMD's stock soars again on heavy volume after Epyc chip unveiled. Treasury yields travel higher ahead of key housing number. Breaking Stock market opens slightly higher as Wall Street tries to avoid 2nd straight down day. Updated These stocks may be ready to pick up the bullish baton from techs. Nasdaq Composite up 0. Dow industrials rise 13 points to 21, Breaking Stocks open slightly higher as oil steadies.

Ebay launches price matching program. Etsy's stock rallies 0.

Home News Viewer Video SectorWatch Podcasts First Take Games Portfolio My MarketWatch. Retirement Retire Here, Not There Encore Taxes How-to Guides Social Security Estate Planning Events Columns Robert Powell's Retirement Portfolio Andrea Coombes's Working Retirement Tools Retirement Planner How long will my money last? Economy Federal Reserve Capitol Report Economic Report Columns Darrell Delamaide Rex Nutting Tools Economic Calendar. My MarketWatch Watchlist Alerts Games Log In.

Bulletin Split decision on Wall Street early Wednesday: Home Investing Stocks Michael Sincere's Rookie Trader Get email alerts. By Michael Sincere Columnist. February Will the bull see his shadow? Trading February's loopy markets. Should gold bugs buy miners or bullion? APR Last Week 6 Months Low Interest We Want to Hear from You Join the conversation Comment.

How to Pick and Trade Penny Stocks: 13 Steps (with Pictures)

MarketWatch Site Index Topics Help Feedback Newsroom Roster Media Archive Premium Products Mobile. Dow Jones Network WSJ. Magal Security Systems Ltd.