ah – i could indeed write a book !
as a transplanted penny stock trader, moderator, teacher and manager of others portfolios gather up close and listen !
penny stocks offer a TREMENDOUS income prospect, IF you comprehend that the pennies are the MOST MANIPULATED trading vehicle in the world. IF YOU LEARN THE RULES OF THE GAME and follow them completely, its very simple to get into the game and succeed !
they work this way — a deep pockets trader (or group, including many many of the penny stock sites) will slowly start buying a stock that appears to be bottomed, ever so slowly stoping the downside move. They will do this slowly, over a matter of a few days, and then ANNOUNCE to all the sites that this stock is READY to run. (REMEMBER – they are already HEAVILY in at the lowest price possible !)
between their now HEAVY BUYING and the influx of newly interested traders, the stock moves up, and the deep pocket traders help by buying at points of resistance which moves it up faster and faster as more and more people see and want to partake of the action !
on the first day, the stock will most likely close at its high, opening the second day with more gains UNTIL the NOON reversal area where it takes its FIRST retrace, but will also close at a new high during the afternoon session after the 2pm reversal !
Now we come to day 3, and lo and behold our little amazing head turner GAPS UP at the open, and this is where all hell breaks loose !
Now that it gapped, it waits till about 10 and the deep pockets GET OUT FOREVER, and then the stock wavers and DROPS like the proverbial, and the market makers MAKE BACK all the money they lost by SHORTING the downside, as people panic and sell their shares for anything the market makers will offer !
to understand the rest, one has to understand how the mms make money on the short side, which is another story in and of itself !
If you follow the rules, ride it to either the second day close or at least get out really fast on the gap day, you can make out very nicely, but WOE be to the ones who HOLD past that gap, for they shall spend the rest of their lives looking at a worthless holding, whose price has dropped beyond any worth.
all during the previous activity, scores of people are on the internet “pumping” these stocks, and as people see the sudden movement, they hop on the train, adding their money and more momentum to the news ---- of course, comes the appropriate times when “deep pockets” SELLS, the world ends for those not smart enough to understand the game (which happens in forex also, btw) — this becomes the DUMP portion of the program, and hence the expression “pump and dump” !
NOW comes the dangerous part, because SOME pennies can be played for a week or more, although the end game is always the same ! But as a pretty simple rule, if one gets out on the third day and NEVER looks back, even if the stock continues to rise, you will always be ahead — like any other trading, its greed that will ruin you in the end, so avoid that greed, take profit when youve got a decent amount, and leave the weeping and knashing of teeth to the others, not so fortunate to be “in the know !”
its a game thats played (like forex, btw) at specific times of the day and in a very orchestrated manner for those who have studied it, and can produce VERY large amounts of profit for very small amounts of input, BUT it does NOT have the trending abilities of forex, which can be plotted over a short OR long time period and is the very reason Ive been a forex trader after successfully trading pennies, for a number of years now.
In my mind, forex is simpler and easier and allows you to play both short and long, which cannot be done with pennies in the USA legally by other than market makers !
It tends to be more honest in that we KNOW the banks will move the price from one side of the LRC to the other, although we dont always know WHEN, which is why taking profit at the midline of the LRC, as was suggested way back there, is a truly good way to make profit !
enjoy and trade well
mp
[B][I]Within the great hall at Elfinore stands a wondrous coffer, precisely four cubits square and securely latched against the outside world. Inside that repository, shut away from impertinent eyes, abides many an intriquing trading secret garnered from around the world and over the ages !
As a child, i used to watch from the darkness as the secrets were debated and annotated by the elders. No one there held a single thought of my presence – BUT I KNOW WHERE THEY HID THE KEY !![/I][/B]
