Penny stocking 1 DVD Notes

They have few fundaments. Trust No one – especially management.

The Basic to know and rules:

1. It’s all in the stock charts – learn how to technical analysis and reading price action and level 2 action.
2. Learn about the company – premarket research and news catallus
3. Keep it simple – use few indicators, don’t complicate things when charting.
4. Penny stalking – play what’s hot only. Price actions that is hitting scans and do your watch list.
5. Do not discriminate – be willing to play anything, so long it is hot.
6. Aim to profit:  20 cent – $1 per share and move on. Very important. This is not investing
7. Be willing to go LONG and SHORT at all times. This is the goal.
8. USE CANDLE STICKS charts only, nothing else matters – read candle stick books - important
9. Don’t Diversified and be thorough and Be conservative – do not risk high amount until comfortable and experience.
10. Take 1 to 2 positon at a time – always monitor your position, Always monitor the news
11. Take losses quickly- no matter what. Protect your gains
12. 90% traders loss money and give up- don’t be that – protect your capital. Okay to burn commissions and not loss capital amounts.
13. Do not trade before earnings- wait for it to come out.
14. Follow your stocks

Penny stocking/ low cap NASDAQ’s companies have:

• No revenue to little
• NO profits to little
• Have Huge losses
• No capital
• Failure rate is high, success rate is low.
• Stock price between 5 cent and $10
• We take advantage of failures and the hype creation through the volatility it creates.
• Under 250 mil in market cap
• Listed on Nasdaq, AMEX and OTCBB and Pinksheets
• Extremely violate

Equation: great volatility + little liquidity = Massive problem

Lack of large players + Gross Manipulation= Massive Opportunity

How to find trading opportunities:

• % gainers
• High volume stocks
• Scans and Research
• History learns – learn from history lessons.
• Scans

Corporate Events (that can influent the stock price)

Planned

·         Earnings

·         Feature appearances

·         Analyst days

·         Conference call

Unplanned

• Newsletter and recommendations
• SEC filling /halts
• Management changes
• Analyst Coverage
• Patents / Lawsuits/  FDA approvals
• Index add -Russel 2000 funds