Let me show you how to dig out Hot penny stocks that will explode in the short term
Penny Stocks Mpire
Start generating your own penny stocks to watch list
Penny Stocks to Watch, a phrase searched for by many traders or investors looking for penny stocks that are poised to move or have the potential to explode. While doing this search holds many opportunities, it holds disasters for the novice trader.
Because novice or unexperienced traders lack the proper education on how the stock market works and especially how penny stocks trade, they often make uneducated guesses and make the trade too early or too late in the game. A common mistake is putting relatively large capital into one trade. If things go wrong and they often do, most of the account is wiped out. I personally don't buy more than $500 worth of any penny stock, no matter what the story behind it was.
Another common mistake is holding into a position whether losing or in profit for a long period of time hoping that the penny stock price will come back and recover losses or in case the position was profitable, the penny stock price will increase even further. This is unrealistic in the penny stock world. Watch hundreds of penny stocks behavours and you will come into this conclusion. I personally sell my position when it is down 50% or keep it run freely and not worry about losses if the trading capital was very small, like $200 for example. If in profit, i would sell the whole position thus locking in the whole profit or I would sell half and keep the other half running for a risk-free trade. The secret is to take profits fast and do this over and over again with careful and educated mindset.
The best and safest approach to make your penny stocks watch list is to come up with the stock candidates yourself. This way you'll filter allot of the noises and questionable price flucuations usually accompanied with heavily advertised or promoted by free penny stock alert services. Many penny stocks make good moves during the day, I mean moves that can make you 10% or more. Those that move 100% or more from time to time are usually pump-and-dump type of stocks where few traders make money and the majority lose their shirts. You'll get slaughtered trying to chase a highly volatile penny stock. You'd be better off looking for penny stocks that are somewhat stable with enough daily trading volume and quiet tight price spreads.
One of the good places to start with is yahoo's finance biggest % gainers. Since penny stocks are low priced, a small price movement would make a big % move and would show up in many filters. You would have to click on each stocks there and read what has cased that price to go up. Many times, you would be confused and not know why the price is behaving the way it does. There are many reasons and many of them don't necessarily show up as news. For example, the company could be in a trade show showing their products to thousands of customers and one of these customers decides to take a position in the stock. That is why many traders like us would like to buy a small position in such companies right before any trade show. This is especially so if we know that they have some interesting product or service to offer. Many times the stock will go up shortly before and after the trade show or exhibition. This is the importance of having a penny stocks to watch list where you write down these important dates and look forward to participating in any moves.
Now comes the hardest part, the part where you have pull the trigger and transform some of the penny stocks in your watch list over to the buy list. The stocks to buy list doesn't necessarily mean that you have to buy the stocks right away but it contains potential penny stocks that are either ready to be baught at the current market price or ar ready to be baught but at a certain price level which is about to be met. For example, if a penny stock explode 100% or more in a few minutes, hours or days and you think that the news is so good and wishs to buy. You would have to wait until the price comes back down to a price level where you think is less risky.
Buying after the price has already exploded is not recommended most of the time because in penny stocks, when a price of a stock appreciates 50 to 100% in a very short period of time, early buyers would sell half or more of their position to lockin profits. So, as a rule of thumb, don't buy penny stocks that have exploded for more than 100% in a very short period of time. You might be better off consider shorting these stocks.
The most effective way to make money in penny stocks is to be among the first who know the news. You don't want to go to bulletin boards and read about penny stocks that exploded already and recommendation to "buy now" type of things. You have to get the news first. Doing this is an art and requires some tools and they better be free if you are on a low budget. In addition, you have to be able to sort among hundreds of news releases and know what news you have to look for in advance. If you are going to read each and every news relesae, you would be late to catch the big moves. I explain how to do just that in my book, "Fortune makers".
Here is a very hot news release I came across this afternoon ( Jan7, 2010) that reads, Cyclacel's Seliciclib Found Effective Against Lung Cancer Cell Lines Including K-RAS Mutations. The news was released at 12:08 PM. The penny stock , CYCC, was trading at about $1.1. After the news hit, the stock exploded to $1.40 in one minute and by the end of the day it was about $2.00 and the market has one hour to close as of this writing. I baught it at about $1.29, after it went down a bit. I have decided to buy it because of many factors in the news. First, the drug is a phase 2 drug which means thay are going forward in a serious manner. Second, the news is very positive and it would at least have some pyscological positive effect on traders who will know about it later, remember that you are among the first to know. finally, the stock price has not exploded that much and theoretically should have a very big room to the upside.
The penny stock market is loaded with allot of potential penny stocks to buy. The secret is to dig out the best candidates, put them in a watch list and get ready to pull the trigger when the right time comes up.
Fortune Makers
Learn how to fish for hot
penny stocks The simple and professional way
