Posts Tagged ‘penny stocks’
Penny Stock Gains Can Be Staggering
Written by troy on Tuesday, March 02, 2010 | No Comments
Categories: Penny Stock Trading Tags: penny stock gains, Penny Stock Trading, penny stocks, stock gains, Stock Trades
The goal of stock trading is to make money. Unfortunately, the way it is practiced by many you would think just the opposite. If your goal is to make money then you need to give consideration to penny stock trading for the mere fact that penny stock gains can be staggering.
It is humorous that many in the investment community consider themselves successful of they return in the neighborhood of 10% on their account each year. Why is this humorous? Because a 10% gain is a good day for some penny stocks, not a year. Penny stock gains can easily run in the neighborhood of 10%, 20% or even 50% in a day. A five percent move is just an average run of the mill move. Why is this the case? It is because penny stocks have such a low cost per share.
Penny stocks usually refer to any stock trading under $5 per share. Since they are priced so low every move in the stock is magnified. A 20 cent move in a $20 stock is only a 1% move, however, the same move in a $2 stock is a 10% move. Ten thousand dollars invested in the $20 stock would leave you with $10,100 where the same money invested in the penny stock would give you $11,000. If you think that this is a large move, think again. In the world of penny stock trading, penny stock gains of 10% are small. Let’s take a look at a couple of examples.
Dendreon (DNDN) is a biotech stock. On March 9, 2009 DNDN was trading at $2.64. On April 27, 2009 it closed the day at $21.55. That is more than a 900% return in 1 1/2 months. This is the power of penny stock gains. Today the stock trades over $33 per share. This is what can happen when there is great news on a biotech penny stock.
Human Genome Sciences (HGSI) is also a biotech stock. On March 11, 2009 it closed at .48 cents per share. On July 28, 2009 it closed at $14.63. Today it closed at more than $30. That is more than a 6300% return in less than one year. To give you better understanding $10,000 invested in HGSI nearly one year ago would have produced $625,000 today. So when I say that penny stock gains can be staggering, this should give credence to it. You may want to consider doing some penny stock trading of your own.
Increase Trading Profits with Penny Stock Trades
Written by troy on Monday, March 01, 2010 | No Comments
Categories: Penny Stock Trading Tags: diversification, Exit Strategy, Penny Stock Trades, Penny Stock Trading, penny stocks, Profits, stock positions
If you are looking for a way to give a boost to your trading profits you may want to consider using penny stock trades. Penny stocks have the ability to make large percentage moves. If used in conjunction with your normal trading patterns, penny stocks can help increase the percentage return on your account.
If you do not normally trade penny stocks I would recommend that you take a small portion of your account and dedicate it to penny stock trades. You may want to consider using about 10% of your account for this purpose. As you become more adept at trading penny stocks you can increase the amount you dedicate to this type of trading.
Penny stocks have been know to make 20% – 100% moves with a single trading day. Higher prices stocks that you may be trading do not have the ability to make similar moves. You can look at makying penny stock trades as sort of a diversification for your account. This portion of your account would obviously be the riskier strategy.
Depending on the amount of money that you will be using will determine how many different positions that you may trade at the same time. Never include more than three penny stock positions. There is no need to diversify further since this is ony involving 10% – 15% of your account. In fact, if you wish you can carry only one position at a time.
Since penny stock trading can be volatile and risky at times know your exit strategy for each of you penny stock trades. If your exit strategy has been triggered then exit the stock and wait for a new opportunity to enter another trade.
If used properly, penny stock trades can be used to effectively increase your trading profits.