Where To Find Penny Stock Tips on the Internet
Where To Find Penny Stock Tips on the Internet | Getting Started
The key regarding where to find to find penny stock tips on the Interne is to understand where penny stock traders are located on the Internet and where they share their stock tips and information. While there are many websites that tout penny stocks and many other websites that have discussions about penny stocks, there are only a few key websites on the Internet where penny stock traders regularly share and discuss their penny stock tips. It is these key websites that offer the best chances for penny stock traders to obtain solid penny stock tips that can be traded for a profit. Knowing where to find these penny stock discussions on the Internet are occurring is the key to knowing where to find to find penny stock tips on the Internet.
In addition to finding penny stock tips, the Internet has also provided many avenues for the average penny stock trader to obtain penny stock tips and information about penny stock companies. Since the companies that are the subject of penny stock tips should be investigated prior to trading, it is important to know where to find information about penny stock companies on the Internet.
Where To Find Penny Stock Tips on the Internet
Where To Find Penny Stock Tips on the Internet | A Word of Warning
Before I provide the websites and forums where most penny stock traders share their stock tips and information, a word of warning about penny stock trading is necessary (if you are only interested in where to find penny stock tips on the Internet, then skip to the next section).
Penny stocks are inherently risky, much riskier than the New York Stock Exchange (NYSE) and NASDAQ stocks that many people are familiar with. Penny stocks are much riskier because they often represent companies that are in the development stage and have no operating business, or companies that are operating but are very small and not well capitalized, or companies that are in financial difficulties. These precarious situations often lead penny stock companies to dilute the number of shares available to trade by authorizing additional shares and selling them into the open market, which is colloquially known as “printing shares”. Some traders characterize penny stocks as little more than share printing and selling operations, which is often but not always the case. Compounding this situation is the fact that information about the inner workings of penny stock companies is often difficult to come by since many of these companies are not under Security and Exchange Commission (SEC) requirements to disclose company information, due to their small size.
The bottom line is to be very careful when trading penny stocks. Keep in mind that the owners of the companies that penny stocks represent hold all the cards in the penny stock trading game, since they are almost always majority owners and fully control the actions of the companies and boards or directors. They make the decisions about selling additional penny stock shares into the market that may benefit themselves and other company insiders, but hurt those that hold penny stock shares. Money that one cannot afford to lose should never be used to trade penny stocks. For every 1,000% penny stock gainer, there are tens of penny stocks that lose value, sometimes significantly and very quickly, as they are diluted into oblivion.
Where To Find Penny Stock Tips on the Internet: Websites and Message Boards
Now that I have gotten the important warning about trading penny stocks out of the way, I can move on to the reason why I wrote this article, which is to share sources for penny stock tips on the Internet. Although there are numerous websites and places on the Internet where penny stocks are discussed, it is well known amongst penny stock traders that there is one dominant website where penny stock traders discuss their penny stock tips, information, and strategies. That website is Investors Hub. Investors Hub offers general penny stock trading boards that are an excellent source for penny stock tips. These boards quickly allow one to determine which pennystocks are currently trading actively and are a source for tips on penny stocks that may have upcoming news or material developments that could cause increased interest in the stocks in the future (see my list of these general penny stock trading boards at the end of this section). Investors Hub also offers penny stock company specific boards for more focused discussions, tips, and information about pennystock companies. Company specific boards are helpful once you have committed money to a penny stock, so you can stay abreast of the latest company developments. To make it even easier to figure out which penny stocks are currently hot, Investors Hub provides a constantly updating list of the top fifteen most active discussion boards.
A decade ago, Silicon Investor was a popular penny stock tip forum, but many of the penny stock traders from Silicon Investor are now using Investors Hub. There is one Silicon Investor penny stock tip board that is worth checking out (see below) because it is still active with penny stock traders.
Both Investors Hub and Silicon Investor can be viewed without a membership. However, participation in these websites is limited without a membership. It can be helpful to have a membership, so you can ask questions about penny stock tips and about the stocks that you are holding.
Avoiding the Pitfalls of Penny Stock Trading
It is usually a good idea to avoid penny stock tips that are received via e-mail. This is due to the fact that e-mailed penny stock tips are sent by pennystock promoters that have been paid by a penny stock company to promote their pennystock. It is not uncommon for penny stock companies to use the interest generated by e-mail promotions to sell additional stock, thus diluting the value of their stock. By the time you receive the e-mailed penny stock tip, any increase in price due to the promotion is likely to have played out, and the stock may quickly reverse direction and fall.
In the same vein, it is not a good idea to chase a hot penny stock that has already made a significant move to the upside. Quick penny stock moves higher bring in great deal of penny stock momentum players, and although you might get lucky and catch some more of the upside momentum, you do not want to be holding the penny stock when the music stops and everyone is scrambling to sell. The selloffs in penny stocks can be brutal.
Be careful not to be drawn in by the hype surrounding a particular penny stock. Every penny stock has its advocates, long shareholders and sometimes paid promoters, that make wild claims about the potential upside of the pennystock that they are holding or promoting. Due diligence is important when evaluating a penny stock. Do your research and discount the hype. If SEC filings are available for a penny stock you are considering purchasing, then take the time to read them. Look for convertible debt deals in which money borrowed by the penny stock company can be converted into shares. Those types of deals usually lead to dilution and a lower stock price.
Keep in mind that the penny stocks that have failed miserably once had the same hype about their upside potential before they fell in value. Just look at their boards on Investors Hub to see what kind of hype and claims were being made before their stock price collapsed.
Penny Stock Trading Strategies
The biggest difference between trading penny stocks and trading NYSE and NASDAQ stocks is that penny stocks are much more volatile. While NYSE and NASDAQ stocks sometimes make big moves on earnings or takeovers or mergers, penny stocks can gain or lose value much more quickly than NYSE and NASDAQ stocks because they move on momentum. Because penny stocks are often thinly traded, only use limit orders to buy or sell penny stocks. Otherwise, you may wind up buying or selling at prices that are far higher or lower than you are expecting.
Set your limits. Be prepared to sell quickly, if a penny stock trade is not working out. You may not get a second chance to sell at a price you are comfortable selling at. It is better to lose 10% and still be in the game looking for a winner, than to be holding a penny stock that continues to drop in value. The key to the penny stock trading game is to preserve your trading capital and wait for the big 1,000% gainer to fall into your lap. Do not wait for penny stocks to rebound, because it may be a long time, if ever, before they rebound. Some penny stocks, even once high fliers, go to zero and lose all of their value. Stay in the game by preserving your trading capital.
Do your research, follow the penny stock tip boards, find posters who have good track records, and try to find a penny stock that is poised to move higher. 1,000% penny stock gainers are not common, but they do happen; which is why so many people take their chances trading pennystocks. Sometimes these small penny stock companies actually do have big developments, such as significant contracts with big well known companies or large sales gains. The risks in penny stocks are great, but the rewards can also be great.
A good strategy for a newcomer to penny stock trading is to start following the penny stock trading boards and trade on paper, without using real money. Just note when you would have brought the penny stock you are interested in buying and how much you would have brought and paid for it, and then when you think it is time to sell, make a note of the price. See how you do on paper, and when you are comfortable, start trading penny stocks with real money, but never more than you can afford to lose. Penny stocks are not for retirement investing or investing for long term financial needs.
Disclaimer: This article was not written by a financial professional or a registered financial advisor. This article is for informational purposes only, and is not intended to be solicitation or recommendation to purchase penny stocks or any type of stocks. Please consult a registered financial advisor to ensure you understand the risks and rewards associated with buying and selling penny stocks before undertaking penny stock stock trading.
If you have additional ideas regarding where to find pennystock tips on the Internet, please share them in the comments section below.
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How to pick penny stocks
© 2011 John Coviello