A lot of people are searching for a penny stock list, but there is no way to provide one that will stay relevant forever. The biggest reason for this is because the hottest penny stocks are always changing each day. Normally, a penny stock will spike in a short period and then will begin to drop back down to where it started spiking. Sometimes, the price will even fall to a lower price than before it began to make a move. This is why you shouldn’t treat an investment in penny stocks like you can with blue-chip stocks. Instead, you should trade in and out of them relatively quickly.
High priced, blue-chip stocks earn massive profits or at least generate some revenues. Sometimes, they even pay out quarterly dividend payments, which can add to an investor’s returns. On the other hand, penny stocks do not earn anything and generally have no products or services. This means it is unlikely they will ever succeed in the long-term. When you buy and hold penny stocks you are essentially just becoming a gambler, but the odds of winning are much lower a casino.
This Time is Different…
You may think this is the case for most penny stocks, but not the one or two stocks that you own. You may believe these stocks are a diamond in the rough and are your one-way ticket to financial freedom. Lots of people went into penny stocks with this same belief, but it never ended well for them.
Penny stocks are not good companies and are not fundamentally sound. So, no matter which penny stock list you utilize, you will always end up a loser when you invest in them. Normally, the longer you hold them, the greater the chance that you will end up deep in the red. A lot of these companies seem to have a great “story” with what seems to be an amazing product or service. The truth is, penny stocks are not what you think and 99 out 100 times, their online profiles are fabricated by PR firms. Most of the time, they spend hundreds of thousands of dollars on marketing, rather than investing in their business operations.
Face The Facts:
Although many penny stock companies may have started with good intentions, they soon find out how competitive it is. Without a means of generating any revenues, the only way for “start-up” company’s to continue to operate is by raising capital. These stock offerings are dilutive and directly impact shareholders. Without them, the company must file for bankruptcy so unfortunately, they have no other choice.
This is why having a static penny stock list can be dangerous because they aren’t stocks that you should hold for long. You need to realize that investing and trading are very different from each other. Penny stocks are trading vehicles that are created to raise capital and make their management and large institutional sponsors rich. A majority are pump and dump schemes and some are not even real companies. For this reason, they are bad investments.
Luck vs. Skill:
While it’s true some people make a killing in penny stocks, most people do so because they get lucky by gambling. The few who profitable consistently trade them on a short term basis. Even if you have the best penny stock list, you won’t make consistent money in penny stocks. Unless you trade them in the short term, yous odds of profiting are extremely low. When you find out a method of entering and exiting these stocks quickly,, you can start to extract large sums of money. It isn’t something that will happen in a few weeks, but over time, you can pull out profits consistently.
Each day you can find some of the top penny stocks which will often increase by 50-1000% per day. To do this, you want to use a penny stock list like one of these at stocksunder1.org. This is a free stock screener. It will let you filter out penny stocks for the price, volume, and gainers or losers. These are the stocks that have the greatest chance to make the biggest percentage moves.
List of Penny Stocks To Avoid:
Volatility is a requirement to make money in penny stocks. The best penny stock list will have the biggest movers. Most penny stocks become active for a very short time and then go dormant for months or even years. When a fresh news catalyst becomes stale, the volume dries up, and nobody is interested anymore. This lack of demand means the stock goes no place and generally starts fading away.
As a trader, we must avoid getting caught in penny stocks while they are stuck in this period of limbo. At these times, it’s like getting your tire caught in the mud. The more you press on the gas and try to get yourself out, the deeper the hole gets, and the harder it becomes to get out. New investors often buy penny stocks after they spike, while they have become over-inflated. Sometimes the bubbles can continue to inflate causing a penny stock to continue to rise and a few people get lucky and sell while the stock is up.
Why Greed is Dangerous:
Most people take too small of a position and fail to sell for a profit. Since greed overtakes their thought process it completely blocks their rational decision making process. As they continue to hold the stock, they watch as all there profits slip away and they curse at themselves for being foolish. As the stock continues to drop, these investors watch in horror as their account value plummets before their eyes. Then comes the period of regret and the deep desire to breakeven to get their money back. At this point, most penny stock investors feel like they have made a bad decision and vow that they will never touch penny stocks again. If they can just be made whole everything will be better. The truth is, a lot of penny stocks will never recover to their previous high, and the penny stock investor ends up a loser.
Keep in mind, that most of the opportunities you will find in a penny stock list are very volatile and can be very dangerous. But, with big risks come large rewards and those in the know can earn vast sums from these penny stocks. The way to trade penny stocks successfully is to make sure you understand the risks and to utilize strict money management. By sizing your positions correctly, you can minimize your risks and improve your success rate.
Position Sizing Is Key:
A lot of times new people enter penny stocks and start with too small of an account. If you start with for example $500, then you need a huge percentage return of 50-100% or greater just to make a decent return. Although this is possible on a one-off basis, you aren’t going to consistently earn these kinds of returns. The successful traders have realized this and now have more realistic expectations. They don’t expect home runs, but instead shoot for singles.
They know that if they can take 10% from stock by using a $3000-5000 position, they can earn a decent return faster. If they do this consistently, they will compound their gains and get rich over time. This can greatly reduce their risks and enhance their overall profitability. Since these returns are much more common and more predictable, traders can become more consistent. To learn more about why traders win vs lose in penny stocks, click here.