Reddit penny stocks “r/pennystocks” subs continue to be a great resource for Make Money knowledge in 2019 With Penny Stock Signals-Expert Guide. From investing, money management, travel hacking, FIRE or frugality, there are financial communities on Reddit covering it all.
1 ) /r/pennystocks Discord Partnership
We’ve been accepted to the Discord Partner program! While this doesn’t mean much will change, it does give our server access to better voice servers as well as a vanity url: https://discordapp.com/invite/pennystocks
If you haven’t had a chance to join yet, I highly recommend you give it a shot! There’s always something brewing in #stock-discussion!
So it’s Saturday morning and it’s beautiful and I’m appreciating life again from my bodhi tree Buddha pose.
And I’m in a philanthropic state of mind.
I was chatting with this kid in the subway who shoulder surfed my tweeting and asked me for advice. He invested money on subpenny stocks and they are all in no bid at the moment.
And when I call subpennies the Wild West… it really is. Imagine the 1850s west where a couple of dudes on horseback attack you, take your money and leave you for dead. That is exactly what happens as the SEC is largely asleep.
I want to do another thread for penny stocks over .01 but let’s keep this focused on the subpenny realm. We have all done this in our youth.
Before you invest, few things to consider:
- Take a look at the outstanding shares. If it’s in billions, it needs billions in volume to move the pig. Mostly never happens.
- Take a look at the authorized shares… some have 25 billion of them. That means …. the float can be increased any time and they have plenty of shit in waiting to add to the pile.
- Most penny traders look at history and go… on the same date last year, it was at .04 and now it is .0022… so it should go back to .04 and I will make money… BUT, that .04 last year was on a lower float – management must already have diluted the shares all the way down to .0022. They are selling to new investors who are now holding the pile of shit. It may have moved to .04 with 300mil outstanding shares but now it is at .0022 with 2 billion outstanding shares – majorly diluted
- What is dilution? The miscreants aka management always use a news PR to pump the stock – 2 years ago many used bitcoin to pump it – like xxx holdings now exploring bitcoin mining – and the stock jumps – new buyers, old holders including management sell and take the money – that is how they pay themselves. Now it is cannabis.
- Why the news to dilute and dump to new shareholders? Because there is convertible debt obligations to be met and dumping to you is also their salary because these companies make negative earnings – cash flow is a joke.
- Reverse mergers and shells – this is another PR to boost the stock and dump it to new shareholders. Reverse mergers are always a sham because the one doing the reverse merger is a shell. They are both run by the same or similar management team and their only objective is to take your money.
- Front loaders – those who pump on twitter or stocktwits or Reddit are mostly front loaders. About 50 traders work together and front load a ticker at no bid. Then they tweet the hell out of it and make new buyers buy the stock. When the stock doubles or triples – they dump and move on.
- Pumpers – other pumpers are bots. Most accounts on twitter shilling penny stocks are bots. When you see a tweet with a set of tickers, it is always a bot.
- If you still want to invest in this, buy at .0001 and dump at .0002. If you wait for .005 or .01, you are never getting there. There will be a few times you will get to .005 and that is only because you got extremely lucky. Most penny traders (non front loaders) lose their money.
- These are not real companies. Some have an address but if you visit the address you will see the building is empty. Or perhaps one little space in the cleaning closet with a phone. And no staff.
I would like to add more but after my French press coffee and red velvet waffle. I’m sure others will have excellent advice too. If you do, add them.
When I was first learning the loops of the stock market I stumbled into this subreddit hoping to profit from small investments. I took the advice I saw in here because I had no clue what I was doing. I lost a lot of money.
I’ve learned do day trade since then and have since earned back all the money I lost and am on the path to becoming a full-time day trader. Gains from day trading penny stocks can be up to 100 dollars a day trading with a 1,500 dollar account. Day trading strategies as you get used to them also put you in a position where you can choose to trade with a high winning percentage. Long term investing is more of a gamble because some companies despite having good fundamentals may take over a decade to be noticed. Don’t you want to profit now? Time and effort invested in learning day trading strategies can and will earn you a lot of money if you stick with it. I’ve put some resources below for those who will heed my warning.
I see this question asked a lot and I thought it would be helpful if I created a detailed step by step instructional how-to screen for penny stocks. There are many different types of screeners but this one specifically will cover oversold stocks that are on the verge of a reversal.
I have seen a lot of people charging for screeners similar to this one but everything below can be set up on tradingview.com which is a completely free service. Of course with paid services you may get better and or more accurate results but I’ve been using trading view for a while and have been very pleased with it.
Here are my stipulations for the penny stocks that I screen for:
- The stock price must be under $3.00
- The stock must have an Average Volume of 300,000 or more.
- I use MFI so I want my readings to be oversold and under 20.
- Last Candle has a change of 0.5% or better
Obviously, since we are trying to trade cheap penny-like stocks we don’t want to spend more than $3.00. I’ll be honest I typically play under $2.00 but I like to have that $1.00 buffer incase something is set up nice. We also need enough volume to execute our trade in and our trade out. There are plenty of set ups everyday with little to no volume. Trust me, that is a terrible place to be in.
I trade MFI on everything so that is my preference but you can change MFI to RSI or stochastics or another momentum based oversold/overbought indicator. The idea is we want to see an oversold level on the daily.
Lastly, the change in the closing candle needs to be the reversal candle. We can try and time reversals and predict the bottom but it rarely works out. It’s okay to let go of some of that profit in order to catch in-the-momentum action. This is why I set the change to half a percent or greater so that we can see where the reversal is. This makes your trade a little safer.
I typically ride these penny stock plays to 3-5% and cut.
So, now that you know why my screener is set up this way let’s walk through the how-to of getting it set up on tradingview.com\
- On the homepage of Tradingview.com click “Screener” underneath the ticker search
- Select “Stock Screener”
- On the right hand side underneath the blue filter button there are three little dots to change the column. Click this
- Check boxes for “Last” “Money Flow 14” “Average Volume (30 Day)” “Change %”
- You can save this column set by clicking the “Column Sets” button on the left hand side and then “Save set as”
- Once you have saved you can now adjust your filters by clicking the little funnel next to each column title. Use the parameters above
- You’ve done it!
Now you have the stocks to keep an eye on!
Since my last post got so much positive feedback I’ve decided to release another tips video. This would be ideal for beginners who just don’t quite understand technical analysis yet. Day trading can be frustrating and confusing at times and I’m just here to simplify it as much as I can and for free.
*ALSO DAY TRADING IS NOT EASY!!! IT TAKES TIME TO BECOME GOOD AT IT SO BE PATIENT, SHOW UP TO THE MARKET EVERYDAY AND MASTER YOUR STRATEGIES*
DETROIT (PENNYSTOCKS.NEWS) With the markets being really hot and with so many stories popping-up of so many successful day traders. But should you trust most of the stories? Well, some have become very successful day trading in the stock market. But some are scams and are just trying to perceive themselves as people that they are not. Thus, most rookie traders follow their lead and end up blowing up their accounts. In this article, I will discuss the major mistakes and possible way to avoid making them again.
The Mistakes Rookies Make
It is not their fault, but most new investors follow the lead of what other people say in groups. People that are new in this industry do not put in the time to do their own due diligence. That is the most important aspect. Most rookies don’t know what all the numbers mean, and get confused and just follow the lead of what others. Most people get caught in a pump and dump. Without them even knowing about it, until it is too late and have lost most of their investment. This is mostly happening in Over the Counter Exchange better known as OTC markets. Another mistake that both experienced and rookie investors make is that they get greedy. Investors will see a substantial gain and would get the feeling that it will continue to go up. The biggest mistake investors make, undisciplined and not taking profits. Over time those profits will add up and cause a small account to grow to a new level.
I recently saw this video about a 24 year old millionaire who shorts penny stocks.
This seems like a great idea. Almost all penny stocks are dumpster fire junk. You could easily make so much money since almost all of these companies fail.
However I’ve tried short selling different Penny stocks and my orders never go through. There are never any shares available to be borrowed. From what I’ve seen it seems impossible to short penny stocks.
I’ve made a post here recently asking the genuine question, how do I pick a stock? My way is kind of obtuse, requires lost of near arbitrary googling, and I don’t think can easily be summed up succinctly. So I’m going to write out what I do, with a stock in live time, and you can see why my method may or may not be the best for you.
Now before I get into it- I encourage folks to give me tips, improvement, everything.
Okay so I’ll get into it. First of all, we are on reddit, this is a great tool. It’s human discussion from all around the world to provide both input and output. I see too many folks looking for 3 things:
“When is it going to pop?”
“Whats the entry/exit point”
When I first started posting here, I thought it was etiquette to provide your due dilligence as input and get sound output in return. But now I see posts that don’t even include a body…just flat out questions in the title. That is not using this great tool, this discussion platform, in its best capacity. I get the feeling like everyone thinks I’m a pro but guys…I’ve only been actively looking into stocks like this since late December. I’m just as wet behind the ears as you are.
So how do I pick a stock that interests me before using our discussion tool? I use a couple different screeners but before I even get into a screener…I look with one thing repeating in my mind: Pennystocks are awful investments. I think you have like a 90:1 chance in finding a stock that is really trying to make it, most of them are based on a mountain of bullshit to begin with.
Have any of you seen Jackie Brown? There’s a scene where DeNiro asks Sam Jackson “How can you trust Melanie (his live-in money sucking pot toking stoner girlfriend.” Sam Jackson replies “I can’t trust Melanie, but I can trust Melanie to act like Melanie.” That is one thing that has helped me…I can’t trust any of these stocks to behave as a normal stock does, but chances are I can trust it to act like a penny stock. It’s going to soar high or divebomb into a 6 sided ring of fire in a pit of hell cohabitated with truants and fornicators. So get in, have your jollies, and get out. Getting out is based on how far you can trust this stock. Can you trust it for 1, 2, or 5 days? See where your trust is after reading this.
Just want to preface this summary by saying that anything in parentheses is my own thoughts. Bullet points are mostly copied word for word from what he had written down on his slides.
• We want high volatility stock
• We want a stock with a beta >1
• We want a higher liquidity, ergo more volume. At least 50,000-100,000
• Shareholder = Stakeholder = Stockholder
• Dividends: portions of company’s earnings that are distributed to shareholders
• Common Stock: more, ability to vote, paid last in bankruptcy
• Preferred Stock: rarer, can’t usually vote, paid before common shareholders in bankruptcy
• Bonds: you loan money to government or corporation and make money through interest.
• Outstanding shares: total amount of stocks held by stockholders. Not the same as number of stocks available.
• Float: total number of shares available on the market. It is Closely held shares – Outstanding shares.
• Capital Gains Tax: tax owed on stock gains
• Day trader: execute multiple trades by buying and selling intraday
• Intraday: any time period that occurs during the course of a single day.
• Commission Fee: avg. around $10, charged each time you buy or sell
• Swing Trading: places trades and holds more than a day. Sometimes holds stocks for weeks or months.
• Scalping: An illegal practice in which an individual or group of individuals will recommend stock to be highly valuable to unsuspecting traders and/or investors. As they buy the stock when the price rises, the manipulative individual(s) sell their portion of the stock, making a profit, while the unsuspecting traders and/or investors get left with worthless stock. (This is actually a pump and dump, this guy’s an idiot)
• Scalping: Placing numerous trades and holding a position for minutes or seconds, making very little percentage gains per trade.
• Position Trader: places trades on a monthly or yearly basis.
• High-Frequency Trader: placing millions of trades per day at the millisecond level. Conducted by a computer.
• Look up the Flash Crash of May 6th, 2010
• More than 50% of all stocks are traded by HFTs
• (Spouts on about how evil hedge funds hacked the AP twitter to crash stocks momentarily)
• Algorithmic Trading: Pre-programmed computer code that distributes commands to an electronic platform, which then issues automated orders.
• Trend Trading: buy and hold trends in a stock.
o Tip: a lot of trends in biotech and Pharma industries. Also, energy experience trends.
o Most penny stocks trend sideways(yay)
• Momentum Trading: momentum trading is often confused with being the same as trend trading. This is wrong. Volume is the differentiating factor. Trend trading can be short or long term but momentum trading is almost always short term.
• Momentum formula is bunk. It is last price – closing price x days ago. This is just a difference in prices.
• He does some fancy analogy about a car and soccer ball but he’s just getting at that volume is the differentiating factor.
• Contrarian: Investors or traders with views contrary to the standard norm or status quo. More needless stories about Copernicus and MLK Jr.
• (Goes super neckbeard about having contrarian mindset and how most people aren’t smart enough to possess this mindset.)
• Breakout Trader: stocks generate patterns based on historical price levels. Those price levels form very explicit patterns and when those patterns are broke, there is usually a lot of volatility.
• Market Capitalization: appraises the overall size of a company.
o Market cap = outstanding shares x stock price
• Mega cap – Large cap – Mid cap – Small cap – Micro cap – Nano cap
• Penny stocks are small caps and below.
• Market cap doesn’t equal the value of the company. (doesn’t explain what does)
• (CORRELATION DOES NOT EQUAL CAUSATION. He took 10 minutes to explain this)
• (Correlations are represented by Pearson’s R.)
o (Range from -1 to 1. 0 means there is no relationship.)
o Some stocks are strongly correlated, one goes up, buy the strongly correlated stock to it.
• There is a correlation between market caps and risk/reward
o Larger market caps – lower risk/reward
o Smaller market cap – higher risk reward
What moves stock prices?
• Stocks prices are driven by the law of supply and demand
• Stock prices don’t move if there isn’t any volume
• Humans and their self-interests control supply and demand in the stock market.
• Demand: who is willing and able to buy various quantities of stock at various possible prices
• Market: a place where buyers and sellers meet to facilitate an exchange.
• (Holy shit he goes ham on some supply and demand chart for like 10 minutes)
• (Still talking about how supply and demand works)
• Law of demand: it is an inverse relationship between price and quantity demanded.
• (I’m not typing all of these fucking definitions, if you want to learn about supply and demand go to 1:09:00)
• (Bad news causes stock prices to go down, good news makes it go up. Shocking)
• (I regret typing this summary)
• (HOLY SHIT 1:09:00 – 1:25:00 was just explaining demand)
• (I didn’t summarize from 00:00:00 – 00:13:00 and 1:09:00 – 1:47:00 and 1:49:00 – 1:51:00)
• (Finance 101)
• Ask Price: Minimum price that sellers are willing and able to sell at.
• Bid Price: Maximum price that buyers are willing and able to buy at.
What is a Penny Stock? (lol with 7 minutes left in the 2 hour video)
• Penny stock: any stock that trades under $5
• Penny stock: any stock that falls within small, micro, or nano market capitalization
• Penny stock: any stock trading under $1
• Penny stock: any volatile stock or a stock with high beta (his favorite definition)
• Penny stocks are rippled with scams.
• Are you going to win 100% of the time? NO!
Winning and losing
• Myth: a greater win to loss ration equals greater success.
• The more trades you win, in contrast to the number of losses, the better you are at trading does not determine the outcome of your success.
• (Goes on to explain that different trades can differ in monetary amounts and you can lose a bunch of small losses and still be profitable. Holy shit!)
I apologize for the weird formatting, I mostly just copied and pasted from Word.
This guy sounded like the all-knowing college freshman at times. He never really specified what strategy he uses, apart from “I use them all and I know when to use them.” I feel like I wasted two hours, please don’t waste your time on his future installments.