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Sage Advice For Penny Stock Newbies – Wisdom From an Experienced Trader I make good money with penny stocks and I do so on a consistent basis. I make enough that I am able to fund several non-profit causes I really care about and to provide random acts of kindness for my family, friends and sometimes just people I meet. I also sock away a nice bundle and indulge occasionally in a really cool and very expensive toy! I didn’t always make good money with the stock market and I wish looking back on it now that an experienced trader passed on their wisdom. So, I’ve decided to do this for you. First, if you are trading just for the sake of making money without any goals in mind as to how you are going to use the money, I can guarantee that your learning curve will be much steeper than for someone who has clearly defined goals on what they want to do with their profits. Clearly defined goals give you a clarity of purpose, and with this clarity of purpose, your mind somehow figures things out faster. While I don’t pretend to understand all the reasons this is true – I just know it is true. You learn to zero in on what really works and more quickly eliminate what doesn’t work. It wasn’t until I really needed the money for a non-profit that had lost their funding source that I really began to make serious money with penny stocks. I was very motivated in my heart and my mind just suddenly found the best way to make the money I needed (and a lot extra!). Second, while it is true that penny stocks can be more easily manipulated than other stocks, and subsequently they carry more risk, some penny stocks are much riskier than others. The quicker you learn this and and learn how to avoid the ones that carry more risk, the more money you’ll make – and the easier it will be on you to do so (it’s amazing what a tanking penny stock that you can’t sell will do to your blood pressure!). Okay. Here’s a real quick summary. Penny stocks that trade on the pink sheets are far more risky than those that trade on the OTCBB – and it’s not just a “one step” difference! In my mind, I think of them as at least 100 – 1000 times more risky and I treat them accordingly. I avoid all subpennies period (penny stocks trading for less than a penny). These carry a ridiculous amount of risk. Anything trading for less than $0.50 I am far more wary of – this is based on experience, not some arbitrary rule. If it is trading for less than $0.50 and it trades on the pink sheets, I almost always forget about it – in fact, I very seldom buy anything on the pink sheets unless there a really compelling reason to do so and hype doesn’t phase me much any more. The mention of hype leads me to my third point. I used to subscribe to everything that was offered and I spent HOURS upon HOURS every week reading through all this stuff. I got ripped off a few times too and I’ve always been more wary than most from the very beginning. Here’s what I’ve learned. Practically NONE of the free newsletters and other free information sources on stocks such as free training videos offers anything that is really useful when it comes down to the nuts and bolts of actually making money with penny stocks. Worse, most of the information in these free sources is nothing more than various versions of the pump and dump scams or useless dribble peddled by someone with little knowledge pretending to be an expert to sell their product. I realize this may sound cynical to you but that is my honest conclusion after years of trading. I ignore at least 90% of the free information now yet I make MUCH more money. My fourth piece of advice is actually related to the first and third pieces of advice above. There are only so many hours in the day and I have to decide every day how I’m going to allocate my time. It is very easy to get so wrapped up in trying to learn everything you can and reading all the hyped information out there, you basically lose sight of what’s really important. It’s easy to get so caught up in the process, you lose sight of what you want the end result to be. I occasionally still have to back up and look at the big picture and why I’m doing what I’m doing. I have to remind myself that if I spend 1, 2, 3, etc hours reading the latest fluff and duff I’m not doing what it takes to really make money – and MORE importantly, I’m not making enough money to fuel my real purposes to make money in the first place (remember, you need a clarity of purpose – I can’t stress this enough!). I have found that if I actually dedicate myself to spending LESS time, I actually end up making MORE money. I’m more efficient and I concentrate my efforts on things that actually work instead of spinning my wheels just trying to learn stuff from free sources that can’t teach me much of anything useful to begin with. I take that extra time and go out and enjoy nature and use it to get involved in the community – and THAT fuels my fire to make more money more than anything I could have ever read online! Fifth, on to some nuts and bolts. When picking out a discount broker, you need to realize that most of the popular ones for trading traditional stocks are NOT the best for trading penny stocks. They often tack on extra fees and have complicated fee structures for trading penny stocks. Some will not let you short penny stocks and this can be useful at times so I prefer to have this option open. Many can’t feel an order for penny stocks because they simply don’t have good access to penny stock shares. Worse, they have trouble selling them when the time comes. When you’re shopping for a broker, be sure to pay close attention to what they offer for PENNY STOCKS, not just what they say they offer in general. Don’t call them… ask your questions in writing and get back their answers in writing. Don’t be shy about asking for clarifications when necessary (also in writing). Make sure they have an easy way to set up test accounts so you can easily test things before you inv est any real money. The mention of test accounts gets me to my sixth point. ALWAYS test any penny stock picks you receive in a test account so that you can become familiar with how profitable a source of picks really is. Remember, almost anyone can get lucky once in a while. Maybe they pick something great one time and then 12 duds after that! So, test, test, and test again!! Now, I do NOT recommend using free picks. Again, these are almost always pump and dump scams or someone pretending to be an expert by regurgitating the pump and dump scammer’s hype. You need REAL information to make REAL money. I highly recommend buying PREMIUM stock picks from individuals who are making real money with penny stocks. And remember… people who are great at picking penny stocks often don’t look or sound like a typical stock analyst. Instead of a suit, look for a really good investigative reporter type. Here’s one of the very best premium penny stock pick services. I have tested these picks thoroughly and I find them to be extremely profitable on a consistent basis. Not only will you make good money, you’ll learn a lot too as you see first hand how a REAL expert picks them. Tags: Advice, Experienced, Newbies, Penny, Stock, Trader, Wisdom View this post on my blog: http://stocktips.valuegov.com/sage-advice-for-penny-stock-newbies-wisdom-from-an-experienced-trader/