My plan

I've got a watch list with a few penny stocks that are near there 52-week lows (extremely cheap- most under a penny). Do you think that buying one of these penny stocks with an indicator of momentun is a good idea? I'd only buy a stock that was up 5-30% on the day and would hope for it to run higher in the next few days and then sell it. How liquid are penny stocks that are under .01 because i've never traded them? I'm not planning on risking a huge % of my account value because I know that I could lose all the money I put into a cheap penny stock. What kind of charts and technical analysis should I look at to determine if a stock is a buy or no-buy. I have lots of charts to look at online but I'm not sure what many of them mean.

[netwrangler]

Originally Posted by Niketennis1

I've got a watch list with a few penny stocks that are near there 52-week lows (extremely cheap- most under a penny). Do you think that buying one of these penny stocks with an indicator of momentun is a good idea? I'd only buy a stock that was up 5-30% on the day and would hope for it to run higher in the next few days and then sell it. How liquid are penny stocks that are under .01 because i've never traded them? I'm not planning on risking a huge % of my account value because I know that I could lose all the money I put into a cheap penny stock. What kind of charts and technical analysis should I look at to determine if a stock is a buy or no-buy. I have lots of charts to look at online but I'm not sure what many of them mean.

As a tennis player for 50+ years, let me try a tennis analogy:

Hoping to make your fortune by putting money in penny stocks is like hoping to win a tournament by trying to paint the lines with your shots. You might get some spectacular wins, but your chances of winning consistently are virtually nil.

Reminds me of the guy who played in a weekly poker game and lost money every week. Finally a friend talked to him. "Don't you know the guys you are playing with are crooks? Why do you play there?"

The poker player answered, "I know the game is crooked, but it's the only game in town."

Penny stocks are not the only game in town.

[TonyM]

Just go to Vegas and blow it all, at least you'll have fun doing it.

[freakscene]

Why not test your plan virtually before testing it in real life?

Use a virtual system and see if it works for you.

Good luck.

[netwrangler]

Originally Posted by freakscene

Why not test your plan virtually before testing it in real life?

Use a virtual system and see if it works for you.

Good luck.

Excellent suggestion!

all good advice. I know its risky but look at stocks like DLAV and other pennys that increase rapidly with momentum. With DLAV you could have turned $500 into $4000. I know this DLAV momentum is not normal but if you get lucky, you can earn a lot of money quickly even though you are risking your initial investment.

I may use a virtual system though to see how i do before testing it in real life. its a great idea

[freakscene]

http://vse.marketwatch.com/Game/Homepage.aspx

there is a 20 minute delay

[TonyM]

Originally Posted by Niketennis1

all good advice. I know its risky but look at stocks like DLAV and other pennys that increase rapidly with momentum. With DLAV you could have turned $500 into $4000. I know this DLAV momentum is not normal but if you get lucky, you can earn a lot of money quickly even though you are risking your initial investment.

You are only looking at supporting arguments and the whole "could have turned $500 into $4000" is a prime example of how $500 gets turned into $0.01

The field of broken dreams is strewn with flawed thinking just like that which you are exhibiting. You've been on this forum for a while now and it is disappointing to see that you have not yet learned that there is no get rich quick scheme to be had.

Think of the millions of traders before you, do you really think that you have suddenly come up with a foolproof way to turn your $1k into a 4 year college payment? Playing micro's at that? You are being naive at best and insulting at worst.

I probably seem harsh and overbearing and that's fine, I'm not in it for popularity. However, blowing smoke up your ass won't help you protect your capital.

[netwrangler]

Originally Posted by Niketennis1

I may use a virtual system though to see how i do before testing it in real life. its a great idea

Using a virtual system is a good idea for all of us when getting into a new investment area.

One caution about virtual systems and Penny Stocks: As Microhedge and other point out, the problem with Pennies in not buying in, but selling out. If the volume is thin, the bid-ask spread may be humongous. Not sure how a virtual system simulates that problem.

My guess is that most systems just ignore it and assume if you can sell 100 shares at a price, you can sell 100,000 shares at the same price. As Sportin' Life sings in Gerswin's Porgy & Bess, "It Ain't Necessarily So."