| There is no question that day trading penny stocks is | | | | finally learned that winning in the penny market can |
| one of the fastest ways to make money in the | | | | be as simple as following a crowd, and thus the |
| stock market. It is also wrought with rumors, | | | | money. Now, your crowd can be a free newsletter, a |
| half-truths, and bad advise for someone new. As | | | | premium newsletter, or even a message board. |
| someone very experienced with penny stocks, let | | | | Whatever it is, if there are enough people following |
| me share with you a few tips and truths that I wish | | | | the same crowd, there is money to be made. For |
| I had known when I first started. | | | | me, I have had the most success following a |
| Tip | | | | premium newsletter. |
| When you first begin this venture you should be | | | | Truth |
| aware of NASD rule 2520 for pattern day traders. It | | | | Premium newsletters are paid by companies to |
| states that anyone who makes 4 or more round trip | | | | promote their stock. I mention this because some |
| day trades in any 5 business day period must | | | | traders seem to have a problem with it. So let me |
| maintain an account balance of at least $25,000, or | | | | remove the blinders, burst your bubble and tell you |
| risk having their trading privileges suspended. | | | | that yes, sometimes when you get an alert from a |
| Truth | | | | newsletter telling you how great this company is and |
| The penny stock market is full of scams, frauds and | | | | how the technicals are amazing, often times it's |
| terrible companies that will never make a dime of | | | | because they got paid $2,500 to tell you that. So |
| profit. O.k., does that mean you should avoid them? | | | | what, you think that's a bad thing? How else will they |
| Not necessarily, even though these companies are | | | | get word out about a big contract or new product? |
| bad investments, they can still be great trades. The | | | | Trust me, when Google had their IPO they spent |
| main thing is that you know going in that this is a | | | | plenty of money on promotion. so just relax, take |
| very short term trade, and not a long term | | | | the information for what it's worth and hope that |
| investment. | | | | everyone who reads that newsletter likes what they |
| Tip | | | | see so that you can ride that promotion as far as |
| Follow the money, and the crowd. When I first | | | | possible and book some profit. |
| began trading penny stocks I had a tendency to | | | | These are just a few things I learned the hard way |
| over think it. Instead of following a newsletter or | | | | over the years. Just remember, you can make a lot |
| picking service, I wanted to find stocks on my own | | | | of money day trading penny stocks by keeping a |
| without any help. Partly because I couldn't believe | | | | cool head and using some common sense. |
| that it could be as easy as following everyone else. I | | | | |