I trade on penny stocks when I was beginning to invest in the stock market. A little here.. a little there.. it made me familiar with how the system works and then when I get the hang of it.. I started dumping those penny stocks and up my level on riskier methods.. I now moved on trying to learn how to read technical and fundamentals.. I am not saying penny stocks are nothing... but it was never my intention to trade on those companies.. so.. that's me.
I know that. First of all. DEEL isn't even that big of a gain for a penny stock. And I only grabbed that one because it was in the list of biggest gainers for the day. Any penny can be moved with a small amount of money for the most part. They are cheap. That is the whole point. You seem to be missing what I am saying about penny stocks and DEEL. Lets break it down for anyone looking at penny stocks. DEEL (Once again I knew nothing of this stock before posting it here. I grabbed it from the top gainer section. I don't own it and won't own it) had next to no movement since Nov 2012. If you bought into this stock and it was dumped you are screwed. If you bought $100 worth, you would own 2631 shares. When looking at the chart for the last three months, I see 8 days when more then 2631 shares were sold. And even then it was a high of 16000. That shows you how hard it is going to be to find a buyer for your stock. You might not get out. You could be sitting on it for a year or more. That is if it doesn't just tank completely and totally take your money. Some of the risks of penny stocks. They are cheap. Someone could cause the stock to move with their birthday money. The over the counter market isn't ask strict so you don't really know what the company is doing. Because of the low, low prices, it is easy for people to pump the stock and dump it. What is pump and dump? Someone buys a stock, then pumps it up trying to get people to buy it. People get excited when they here about the next big stock that someone is claiming big gains on. I have received emails before that claimed a stock was going to climb 800-1500%+ They do climb. You look at the stock and see it has climbed a bit already. People get excited and greedy and just buy in. It climbs more with others jumping in on the same pump. Then on the way up the ones that are pumping it start selling off their shares. They get out and do great. Some of the early suckers that jumped in might get out as well with a nice profit. The once that bought in a little later could end up sitting on it. They might attempt to get out but with no buyers the stock sinks way below their sell price and then nobody wants in on this tanking stock. Information on the stock is hard to find if you can find it at all. Normally you are going on rumor. Some buy on rumors of big news. Then try to get in early and hope that the rumor excites people enough to get them to buy in. Then they try to get out before the news hits. They are trying to sell to the people that are late to the party trying to cash in on good news. Penny stocks are risky. Plain and simple. Some do make some money with some of them. Many lose. Some will sit there and say they are good and never traded one. Some will tell you they are bad and never traded one. I am someone that has made some good trades (not a lot) in penny stocks. I know others that have made some. I have lost money in penny stocks. More then I made in them. I know others that have lost as well. At the end of the day, I am down trading penny stocks lifetime. Did it hurt me? Nope. The money I lost in penny stocks wasn't much. It was money I was willing to risk. I would never play (you are playing a risky game with penny stocks) a money game with money that I couldn't lose. And back to Microsoft. I stand by what I said. The big stocks get people excited. You have to have a lot of money to buy the big stocks and earn big. One of the big names today is Apple. It is trading at $118 right now. To open some accounts you need to put in $500. So with that you can buy 4 shares (if you get it at that price) and pay your buy fee. That will take you a while to make money. A lot of people want to be rich. To do that some will want to find the the next Microsoft, Apple and so on. With the lower priced stocks they can get more and possibly see a bigger gain. I have been on message boards for many years. I have spent a lot of time on stock forums as well. I have read the reasoning for a lot of people. "If it just gets to $1 I can..." "If it can hit 50 cents..." "I can turn my $100 into over $3000 if my 3 cent stock hits $1" "If I buy another stock like that and get the same gains I will have $100000!" Some people are going to dream big. Many will lose it all. I spent a lot of time on a sports betting forum. There was a guy that lost his vacation money on a string of losses. Someone showed proof that he was borrowing money from someone to win back that money he lost. He lost that too. He borrowed again before people really knew how deep he was in. His wife didn't know. Doesn't matter if it is stocks, sports betting or anything else. Do not chase loses. That causes you to make mistakes. If you have a a big lose in stocks you have to figure out what you did wrong (if it was a penny then that is your answer right there) and what to do next. Don't try to get it back right away. There is no "sure thing". Do your own research. Don't just go buy want someone tells you. Cotes notes version. Penny stocks are risky. Play at your own risk. Stop calling it investing. You are taking a gamble. Don't gamble with money you can't lose. James
Everything that I have learned from being on this forum is that we should all stay clear of penny stocks. I see the point. They are small little investments, but have a high liklihood of going under and therefore you lose your money. It is better to save up the money you need to buy bigger more reputable stocks.
