- Personal Finance»
- Investing in Stocks, Bonds, Real Estate, More
Doubling Your Money with Low Volume Penny Stocks
There’s a new method for making money in the stock market that is gaining popularity and notoriety as a genuine and almost full proof strategy. It’s so simple a beginner to the stock market can do it but so profitable that even the big players are interested. It’s called, Low Volume High Profit (LVHP) stock trading. The concept behind this is that buyers locate a stock that has been “bouncing” between two prices consistently for a long period of time due to a low trading volume. Choosing a stock with this track record creates a predictable pattern that can be easily exploited to make larger returns on the investor’s money. Traditionally this has been a method that has been passed around quietly through word of mouth by investors for years now. I have decided to write this article and expose this method after I personally have double my initial investment multiple times using this strategy. Here’s how it works:
Step 1: Find a Stock that "Bounces"
Find a stock that has had a predictable “bouncing” in its share price over at least the last six months. To find a really stable stock that has been up and down a consistent and considerable amount you may have to look at very low prices or “penny” stocks. Here’s an example of a stock of this type (CORR):
As you can see, this stock is very cheap. It’s trading for between 0.0001 per share and 0.0002 per share. That is a 100% difference in price! Look how consistent it is! Keep in mind that this stock may or may not still show a chart like this when you read this article, so please take this as an example of what to look for when locating a stock to buy and not as a recommendation to buy this specific stock.
Step 2: Make a Limit Order to Buy the Stock
Place a limit order (not a market order) for the amount of the stock you want to buy. The reason you want to place the order as a limit order is so that you are guaranteed to buy the stock at the lower of the two prices. So let’s say you want to buy $200 of CORR. You would place your limit order for 2,000,000 shares of CORR at $0.0001 per share. Yes that’s a lot of shares and your stock broker might laugh at you but we’ll see if he laughs at the end of this process. Now be patient, in these stocks that aren’t trading a lot of volume it could take a few weeks to fill the order.
Step 3: Immediately Put in a Limit Sell Order
As soon as you have bought your shares, immediately put a limit sell order in for 5,000,000 shares of CORR at 0.0002. Now again you have to be patient, selling the stock may take just as long as it took to buy it if not a little longer. Keep in mind that professional stock brokers are considered extremely successful if they can produce a return of 20% a year and you are looking at 5 times this amount of return on your money and in a lot less time. So in a month or so you will likely be notified that your stock has sold at your price of 0.0002 on one of these “bounces” that the stock has been doing so consistently and for so long. For the stock itself, nothing unusual has happened here. This low volume stock has been bouncing between these two prices for over a year and a half now.
Now this scenario that I gave you with the $200 of CORR was exactly my first attempt at trying this LVHP method of trading stocks that I had heard about from friends in the stock market business. Because this had been a method that I had heard via word of mouth and never tried myself is why I decided to start with such a small initial investment of $200. I did sell my stocks of CORR about a month later for $400. I can’t describe the thrill you feel the first time you pull off this method of trading and you see that it is possible. I have done it a few times since and have now decided to document this method for others who may find it beneficial. Just remember nothing is a sure thing in the stock market but if you can get the odds stacked in your favor as much as possible, that is when you can make some serious returns on your money.