Last Updated: 26 January 2017
So you are looking for the best penny stock picks?
We often get asked, why penny stocks? Aren’t they risky? Well yes of course they are. But what in this world gives you phenomenal returns without risk? Nothing.
But you see, the key is to minimize the risk while maximizing potential gains. That’s where we come in.
Let’s take a look at some key differences between Investing in penny stocks vs large cap stocks:
- Penny stocks have the ability to move 10-100% (and sometimes more) in a day whereas large cap stocks can take months to see equivalent gains.
- Large cap stocks are manipulated by Wall Street Insiders and Institutional Investors – small investors like us can’t compete with the big boys, we simply do not have the buying power or access to news flows that these guys have.
- Penny stocks are largely ignored by the market – so any positive news to come out is generally unexpected, therefore our alerts can be extremely powerful.
- Trading our penny stock picks can grow your portfolio much quicker than investing in large cap stocks.
- Penny stocks can move big on promotion, hype, buzz and chatter within the investing community – our job is to bring you these stocks before the herd gets in.
Our penny stock newsletter sends stock tips straight to your inbox and Twitter feeds, so you don’t need to spend hours every day trying to reinvent the wheel. Identifying the top penny stocks is only one part of the equation though.
The other part is risk management.
Penny stocks can be risky, and therefore you need to manage your risk and follow a simple set of rules that all traders, big or small, use.
Here is a quick summary of our trading rules:
- Always use stop losses on your positions. Our picks are known for their great timing. This means that we only alert stocks at just the right time before they are about to explode. However things can sometimes go wrong, and using stop losses is essential. The old adage is “if you think a stock can’t go down any further, it will go down further”. In other words, cut your losses quickly and move on to our next profitable alert.
- Don’t fall in love with any one stock. A stock that moves up one day, can just as easily move down the next. Therefore, we always tell our members not to fall in love with any one stock for too long.
- Do not risk too much of our capital in one stock. If a pick does go wrong, you want to live to fight another day. If you invest too much of your money in one stock and for some reason it falls big, you risk losing too much of your capital. We suggest that you use no more than 10-15% of your total capital in any one stock.
- Always book profits along the way. This can be the hardest thing to do. The only thing worse than losing money on a trade, is selling a stock too early only for it to keep moving higher after you have sold. If a stock is moving in the right direction, and you have a profit, don’t be afraid to take profits. You don’t have to take it all, but certainly think about taking some profits along the way.
Many of our members have made 500% – 1,000% gains in a month or less from trading our penny stock picks. This is not typical, but it does show you the potential for unbelievable returns in penny stocks.
Of course some alerts are losers (we are human after all), but members who stick to their rules and follow our risk management advice might only lose 5-10% on any one trade. And given we often alert penny stock picks that double, the winners far outweigh the losers.