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What is a Penny Stock Investor?

Penny stocks are not traded on any of the major stock exchanges such as the American Stock Exchange (AMEX), the NASDAQ, or the New York Stock Exchange (NYSE). Per the Securities and Exchange Commission (SEC) the term “penny stock” refers to low-priced speculative securities of very small companies. Low price is considered to be below $5.00. Penny stocks typically don’t contain much of a history and the company as a whole is valued at about four million dollars or less. The term “penny stocks” is also used interchangeably with microcap stocks, small cap stocks, and nano caps.

Rather than trade on major stock exchanges, penny stock trading takes place on the Over the Counter Bulletin Board (OTCBB) also known as the “pink sheets.” The beginner stock investor will find that the OTCBB, also referred to as the OTC Bulletin Board, is owned by the NASD and it is a regulated quotation service. Those stocks that do not meet the requirements of the major stock exchanges end up being traded on the OTCBB. These are typically smaller companies who may be new companies that may try to eventually be traded on the major stock exchanges.

While penny stock investing can be a great way to make money, it is also a very risky way to trade stocks. There is potential for quick growth which attracts investors however this quick growth is a magnet for illegal “pump and dump” schemes. Fraud is so common in this form of trading that new investors must be on the alert. These schemes are often in the form of emails in which stocks are acquired for pennies and then are illegally sold overseas. These facts are according to some experts. Other risk factors that the stock investor should be aware of include limited liquidity and the lack of adequate financial reporting when you buy penny stocks.

Another issue that traders should be aware of concerning this form of trading includes the statistic that only about five percent of small cap stocks are truly worth investing in. These statistics can be discouraging therefore contributing to the negative reputation of penny stock investing. The good news, however, is that with the right guidance and knowledge, you can make a significant profit in this market.

Continue to read about the penny stock investor and how to build your list of penny stocks. You will find that you can make money with this type of trading however like any other type of investing you must have the knowledge and the discipline required to succeed.


Market Direction: Participating in the strong price moves becomes much more comfortable when having an accurate method for analyzing the market trends. The Dow and the NASDAQ continued to demonstrate a nice steady uptrend. This is in the face of many so-called 'experts' projecting  this is a bullish bounce in a bearish downtrend. The bounce has produced numerous 100% to 200% returns in individual stocks, again while many so-called experts are sitting on the sidelines waiting for the downtrend to continue. If the so-called Wall Street experts are sitting and waiting for the next downleg, who are the dimwits making huge gains in this market bounce?

Candlestick signals allows an investor to control their own financial future. If you had listened to the experts over the past two months are constantly stated that this was no time to be buying the bank stocks, you would not have participated in Bank of America's price move from the $4 area to the $11 area, Or FITB going from $1.85 to $4.37. If you continue to listen to the experts that supposedly know what they are talking about, you will consistently lose money in your portfolios. If you let the candlestick signals tell you what the markets are doing, you will constantly produce profits in your portfolio.

DOW

NUAN up 60% from the re-alert point, AMAG up 30%, a multitude of stock picks over the past six weeks have produced huge gains. Is this because somebody at the Candlestick Forum is a great stock picker? Definitely not! Candlestick signals and patterns produce trade setups that can be analyzed with a high degree of accuracy  This is due to the reoccurring affects created by investor sentiment. What would you rather depend upon? Signals and patterns that have been identified to create high probability price moves, that have worked effectively for many centuries, or the expert opinion of current day analysts. Oil stocks were declared dead recently, prior to the moving up on average of 50%. Bank and financial stocks were downgraded by a major banking analyst just a few days ago. Since that time, those stocks have moved up another 15% to 25%.

NUAN

BAC

The Candlestick Forum provides training CDs that cover every aspect of investing. Candlestick analysis involves commonsense investment practices put into a graphic depiction. Imagine if you had learned how to invest correctly from the beginning. You would not have to be un-learning all the things that are taught incorrectly. The investment 'secrets' touted by most investment trading methods do not address one of the most important aspects of investing, the control of our own emotions. That is an area that is left unattended for most investors. Unfortunately, once investors develop the wrong investment perceptions, their emotional fears and greeds never get corrected. Candlestick analysis incorporates investment practices that greatly reduce the need for emotional decision-making.

This market is an uptrend. An extremely high percentage of the professionals continue to declare this a bullish bounce in a downtrending stock market. They have been sitting on the sidelines, forgoing the opportunity with these market conditions to be making 20%, 40%, 100% returns or greater. Please take control of your own investment future. Nobody else is going to be more concerned about producing profits for your account then you are.

There are opportunities in every market condition to make excellent money. Candlestick signals provide the visual ammunition to make those profits and keep those profits. Learn the 12 major signals! Learn the price patterns! These situations create the probabilities of not only making money by putting investors into profitable situations but a good probability of being in the big price moves when they occur. Each aspect of candlestick analysis is directed toward some very simple functions, to identify the most profitable opportunities and reducing the possibility of large losses. Wouldn't you like to wake up every morning very confident that your portfolio positioning is going to create a profitable day? This is the fun result of candlestick signals. It will make you look forward to seeing what each and every trade will produce for you the next trading day.

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Good investing,

The Candlestick Forum Team


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