Penny Stocks Bible
Stock … A stock which breaks out of a channel or trading range is often affected by … stock trading should be kept as simple as possible, in this guide we …
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PENNY STOCKS BIBLE THE PENNY STOCKS BIBLE Making Money With Penny Stocks Made Simple Welcome to the DoublingStocks.com… Stock Picking Guide This guide is aimed to help you get the most out of our newsletter, by actually understanding the research that me and my team do I aim to help you makemore informed decisions. After Marl has made a stock pick based on technical analysis, we often phone the CEO or company employee’s for the ‘real deal’ on what’s going on. We study press releases and use advanced charting techniques to find the best entry points to make recommendations. Utilising both technical and fundamental analysis through a team of qualified professionals we are able to find stocks with the most upside potential in today’s markets. Doublingstocks.com can help regular, less experienced investors to capture the kind of gains that will make a difference in their lives. IMPORTANT NOTE: Please add ‘ firstname.lastname@example.org ‘ to your contact list/address book/white list of your email account to ensure our emails don’t get lost in your spam box. Yours Sincerely,Michael Cohen Introduction Throughout this book and the regular newsletters here is what I’m going toshow you: 1. How to trade ‘channelling stocks’2. How to limit your risk.3. How to know when to sell.4. How to identify the ‘hype merchants’ from the real companies.5. Which broker to use and why.6.Why penny stocks have more potential than other investments. I’m not going to fill this guide with fluff and filler, and I may not be an accomplished author. So if you read for style or for literary content then this report may not be for you. But if you want the facts on the penny stock market. How people just like you are making thousands of dollars per week from their kitchen table. Then buckle up because I’m about to explain how you can earn thousands from the DoublingStocks newsletter. Enjoy the book, and let me hear from you! What is a penny stock? Penny stocks are generally defined as a stock trading under $5, but in my opinion it’s more like stocks under $2 that display true penny stock characteristics. They tend to be fairly volatile, significantly rising and falling in value in very short spaces of time. Which is what makes using technical analysis (charting) a pretty effective way of predicting future price movements. But we also study the fundamentals, looking into the company, its management, operations, financial position, share structure and growth prospects to name a few. With the DoublingStocks newsletter we combine Marl’s technical analysis with our own charting techniques and fundamental analysis. This helps ensure we only recommend stocks with great upside potential and as little risk as possible. Especially in penny stocks we advocate the use of both fundamental and technical analysis together. By not looking at either, you will be significantly increasing your risk. How to Trade DoublingStocks Stock Picks ‘ From Beginning to End Types of picks As a doublingstocks subscriber you should get our picks once a week at some point during the week. Sometimes we may be a little late but this is usually just because of how time sensitive certain picks are. The US markets are open at 9:30 ‘ 4:00 Eastern Time. Long term play A fair amount of the picks we make in the newsletter are because we like the companies fundamentals. These are the picks you want to buy and hold. They will fluctuate up and down as all stocks do but in the long term these types of picks should rise steadily. They may be undervalued or have high growth prospects, or a combination of the two. Short term plays However sometimes we make picks where we are looking to exit with a quick profit in the following few days or weeks. Here we will usually email at an appropriate sell point. Otherwise we recommend watching the stock trade wherever possible and selling if the run slows and show signs of weakness. There are many different types of shorter term plays. Quite often Marl will recommend stocks because they have been ‘channeling ‘ that is trading in a fairly predictable pattern or because they are about to ‘bounce’. I will explain more about these methods of analysis later. Getting a broker In this section I just want to lay out the basics of a good broker, this could easily be pages and pages of material and charts. Currently we recommend the broker: www.zecco.com to the majority of our members, with their offer of ‘free trades’ allowing larger profit margins than with the likes of www.etrade.com Although I must tell you schwab.com are better at certain things like getting your order filled and getting it done for less, but when starting smaller we prefer zecco.com Alternatives we like include: lowtrades.com / scottrade.com / tdameritrade.com Setting up an account is usually as easy as downloading the application forms, signing them, and folding them nicely into an envelope with a check to fund your account. You’ll receive confirmation of your ability to start trading in pretty short order. Placing a trade Basically there are 4 different types of order you need to know about: 1. Market Order2. Limit Order 3. Stop Order 4. Stop-Limit Order 5. Trailing Stop Order Market Order: A market order is a request to purchase or sell a stock at the current market price. Market orders are pretty much the standard stock purchase order. One thing to keep in mind with a market order is the fact that you don’t control how much you pay for your stock purchase or sale; the market does. This shortcoming can be met with a limit order. Limit Order: This is an order that executes at a specific price that you set (or better) and can be open for a specific time period. While a limit order will prevent you from buying or selling your stock at a price that you don’t want, if the price is way off base, the order will never execute. It’s important to note that some brokers charge more for limit orders. Why? Simple because no execution means no commission. Stop Order: This is a market order that is triggered once your stock reaches a specific target price, the stop price. Stop orders may also be called stop-loss orders, because they help investors put constraints on their losses. Stop-Limit Order : This is identical to the stop order, except for the fact that a limit order is triggered once your stock reaches a specific target price. Trailing Stop: Basically, this is a stop order based on a percentage change in the market price. We usually find it best to use market orders or generous limit orders. How to play the quick trades For the long run growth picks you can forget this, in those trades you just want to monitor them passively and perhaps sell if they become overvalued (or if we email). What I’m about to explain is how to trade the short run momentum picks just looking to scalp a quick profit. Before I go on to explain I want to make sure you grasp one vital concept: Never ever fret about lost profits, if you took a profit you shouldn’t care if the stock continues to run after you sold. When looking for a quick gain, what its really all about is the momentum the stock has and if that stocks run (pps increasing) starts to slow, this is usually a sign of weakness in the market and I’m looking to take my profit. Stocks do sometime slow down and plateuo but in my experience if its just a momentum trade and the stock slows, take profit. Don’t worry about this because where appropriate we will send sell recommendations to you via email, or include a target price in the initial stock pick. One of the reasons I like penny stocks so much, is because of the potential. With little to no institutional presence there is a lot more opportunity to find the gems in the rough. And you can easily pick-up a huge position while its trading very cheap on a lower exchange. It’s also much easier for a 13 cent stock to double than for a $30 NYSE stock. Volume has the answers We always like to recommend stocks that trade on reasonable volume, this makes entry and exit from the stock much easier. But what you also want is stocks that also have a large number of trades. It’s always good if the stock you buy is one that people are buying and selling. For example it’s better if a stock that has traded 20 Million shares on a day with an average trade of 100,000 shares as opposed to 500,000. This is because: An average trade size of 100,000 would equate to around 200 trades Whereas an average trade size of 500,000 would equate to only around 40 trades.
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