Trading signals for penny stocks are best generated on a daily basis. There should be no need to jump within minutes into a buying signal in a market that is often illiquid. Penny stocks offer the combination of lazy trading and adventurous or even breathtaking price moves. The strength of this type of speculation is exactly this – gains that are many times greater than the maximal loss.
Not so fine with the micro cap markets is the inevitable and ongoing cheating. The typical scam is the pump and dump scheme. Take some unknown company and tout it like hell, often by suggesting a strongly exaggerated potential or with the anticipation of completely imagined events of the future.
There is lots of criminal activity in these markets. So, why bother with this type of energy drain? The answer lies in the charts… Just look at them, and you will find that prices still do what they ought to do in a stock market. They go up and down – just faster than with mature stocks.
But there is another drawback. Only scarce information is available about potential penny picks. Some professional help is needed, but … most of these helpers do nothing but the pump’n dump con. You would need someone whom you can trust and perhaps a system for specifically trading penny stocks. Not so much with his ability to foresee the future. That will be severely limited in most cases anyway;) No, the first problem is to find someone with the honesty to issue real picks and not only pigs.
The penny stock picker above has a horrible site. Don’t be rebuffed by that. He isn’t a prophet either. Again, that shouldn’t hold you off. He is just putting work in the detection of favorable situations. Combine that with the favorable math of huge gains and limited losses and you could advance to the sunny side of speculation.