Is it possible to make money from a penny stock worth 10 cents or less?
- Thread starter codestar
- Start date
I detailed a strategy like this one here on ET like 12-14 years ago. Back then they were able to fax their news releases. I figured out who the bigger guys were and was able to get in faster than the mom and pops. Two issues were NO SIZE and Not GETTING printed because of MM's having a license to kind of steal. But the returns where astronomical just not with size. Back then it was up to the B/D to review the opinion letters and most let them side through and just deposit the stock because it was lucrative. FINRA then started to put the clamp on the Clearing firm instead and it was pretty much game over for the pumpers. In some campaigns the pumpers would dump size at the start of the release and then pull back offering only not hitting bids, those days were huge. One of those penny pumpers was here on ET I believe. But he will remain anonymous.
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For the questions you are asking no amount of capital is sufficient.
Penny stocks are very thin markets, mean reversion can be a effective strategy when dealing with instruments with sufficient volume but that is still a countertrend bias which most noobs will get steamrolled by.
Learn to ask better questions.
For a beginner wjon founder of IBD wrote some books that would at least give you a basis.
Hodl crypto could work with that capital, if you find the right project. 10x-1000x is possible in a very short timeframe.
Good luck on your endeavors!
I agree with everyone here, and also it's good to know that shorter term strategies need very liquid stocks. And that aint penny stocks!
One of the most reliable and profitable techniques I found by accident works great on penny stocks and you might even consider it "mean reversion" in a crude sense, but you need to be dedicated to provide liquidity (as they have very little to begin with), on the few that are worthy!
One of the most reliable and profitable techniques I found by accident works great on penny stocks and you might even consider it "mean reversion" in a crude sense, but you need to be dedicated to provide liquidity (as they have very little to begin with), on the few that are worthy!
You are probably better off saving your money until you have 5K or better to invest in higher quality stocks. If that 1K is important to you, then don't invest it if you are going to be upset if it is gone in a month.
But, if you do lose the 1K, consider it the price of Tuition for learning something new about the markets. You might learn more from trading (winning or losing ) that 1K than sitting in class for a semester studying 2,3 classes on Business.
Cryptos seem to be heating up again. BTC was $9,000 3,4 days ago and now it is $11,000.
I am not a major fan of them, but if enough people are, then the price will rise,
(Tulips, Beanie Babies, Paintings by Thomas Kinkade). A rising tide raises all boats. If you bought some Ripple (XRP), at .43, you are less likely to lose all your money like you would do if you bought a penny stock.
I own a few hundred shares in BLOZF. It's a Canadian company that is doing research on breathalyzers for marijuana. Currently, there is nothing that will detect marijuana, similar to the way we can detect alcohol.
It is about .95 and it has been there for two years. But, if they ever figure it out and get it licensed; they will be the only ones in the world with the product. A breathalyzer for alcohol can cost $10K and every community has dozens or thousands. Multiply that by all the cities and counties across North America, Europe etc...and there is a lot of $$$$ potential. But, it's still a work in progress.
They have a legitimate product with unlimited potential if it is successful.
So, the risk is worth the potential reward for me. Most penny stocks aren't worth the risk though.
Good Luck
But, if you do lose the 1K, consider it the price of Tuition for learning something new about the markets. You might learn more from trading (winning or losing ) that 1K than sitting in class for a semester studying 2,3 classes on Business.
Cryptos seem to be heating up again. BTC was $9,000 3,4 days ago and now it is $11,000.
I am not a major fan of them, but if enough people are, then the price will rise,
(Tulips, Beanie Babies, Paintings by Thomas Kinkade). A rising tide raises all boats. If you bought some Ripple (XRP), at .43, you are less likely to lose all your money like you would do if you bought a penny stock.
I own a few hundred shares in BLOZF. It's a Canadian company that is doing research on breathalyzers for marijuana. Currently, there is nothing that will detect marijuana, similar to the way we can detect alcohol.
It is about .95 and it has been there for two years. But, if they ever figure it out and get it licensed; they will be the only ones in the world with the product. A breathalyzer for alcohol can cost $10K and every community has dozens or thousands. Multiply that by all the cities and counties across North America, Europe etc...and there is a lot of $$$$ potential. But, it's still a work in progress.
They have a legitimate product with unlimited potential if it is successful.
So, the risk is worth the potential reward for me. Most penny stocks aren't worth the risk though.
Good Luck
About same return as lottery tickets. Buy 5 shares of msft, then lottery tickets with dividends
He trades using VWAP, price action, market structure.
I see.
Yet the reason, why i suggested to listen - to avoid - doing the same mistake.
Codestar. No you can't. If you try you will lose.
I curently have mid-6 figures invested in penny stocks under 10cents. But I'm invested in the Australian market (ASX) which is full of them. Market caps are possibly different to the US at this price, but price action I expect is the same. The correct strategy at this end of the market is to buy as an investment strategy for longer term holdings in the few penny stocks that will become large businesses. How you figure that out is a separate skill.
To trade in very short timeframes of a week or less you need larger, more liquid stocks. Certainly if you are using TA to decide your entry exits as that will only be reliable with higher transaction volumes.
If you're new, start by position trading larger stocks, i.e. holding for weeks or months. That's far more forgiving.