Are you looking for some wisdom on how to find penny stocks before they explode? Well, you have definitely come to the right place my friend. This page contains strategies and tips on how you can go ahead and find some really good penny stocks before they run hard. The information contained here will help you locate penny stocks that have great potential to provide massive gains.
Now, one thing to keep in mind. I am not actually going to provide you with penny stock ticker suggestions. This is not that kind of page. Instead, I will provide some information on how you can on your own locate such stocks. Some of the topics that I will cover are things like; share structure, chart history, company reverse stock split history and more.
If you are interested in doing things on your own the proper way and not having somebody spoon feed you bad information, then please read on.
Alright, lets go ahead and get started!
How To Find Penny Stocks Before They Explode
When looking for penny stocks that have great potential for massive gains, I recommend looking at certain criteria when doing your research. The first thing that one should look for is a good Penny Stock Screener. A good stock screener allows for you to find accurate stock information for a particular stock. The second thing is to go ahead and decide on a general price area that you would like to focus on. As you might already know, penny stock prices can range all the way from $.0001 to $.99 per share. This is a very large range, so deciding on a general price range is important to help develop a good strategy. The 3rd thing would be to go ahead and look at the share structure of a penny stock. The share structure will help determine if the penny stock is bloated or not. Basically, it will help us to determine if it would take a ton of capital for the stock to move. The next thing that I would look for is the company’s history with reverse stock splits. By doing the research on a company’s RS history, you will help yourself minimize risk. Lastly, I would look for a good chart. A good chart is very important as it paints a visual picture of what is going on with a particular penny stock.
Alright, now that I have given you a taste of what’s to come, let’s go ahead and break down some of these topics into more detail. So if you are ready to continue learning techniques on how to find penny stocks before they explode, let’s continue.
How To Find And Utilize A Good Penny Stock Screener?
When looking for ways on how to find penny stocks before they explode, a good place to start with is a powerful stock screen. Penny Stock screeners allow you to pinpoint and locate penny stocks on certain criteria that you type into the screening application. For example, you could look for stocks in a particular stock price range, certain industries and sectors, recent low vs high volume, 52 week lows and highs and more. Basically, a penny stock screener is like filtering system for penny stocks.
My favorite one that I like to use myself is Otcmarkets.com Stock Screener. Otcmarkets.com website is actually pretty amazing for researching penny stocks. The stock screener is just one useful tool on there. If you are looking for a penny stock in a particular industry or sector, OTCMarkets is a good place to start. Go ahead and check out the stock screener and play around with it a bit.
How To Find a Good Penny Stock Price Area To Focus On?
The next thing to watch out for is the stock’s price / cost per share. When I first started trading penny stocks, I would typically focus on penny stocks with a price range between $.002 and $.0032 (per share) to trade. Once you learn how penny stocks behave in a certain price range, it is easier to figure out how to trade them successfully. You start seeing certain patters that the penny stocks go through. These patterns allow you to get into penny stocks that could potentially pose you less risk.
So, how would you figure out how to find the best stock price that you would feel comfortable trading? Well, that depends on the time frame that you would be willing to hold the stock for. Let me give you an example. If you bought a stock for $.0001 price/share, there is a chance that you might have to wait for a very long time for this stock to get any kind of real volume before it starts moving. As they say, volume before price. With a $.0001 price/share stock, there are lots and lots of shares that would need to be bought and locked up before that particular stock would have any chance of getting out of the triple zeroes. $.002 and $.003 stocks on the other hand, tend to move quicker northbound, but they will typically not have as good of a gain potential of a triple zero stock. Just think this way, if you buy a stock for $.0001 per share, every tick up from there is a 100% in gains. So, if your triple zero stock that you bought at $.0001 per/share goes to $.0005 per/share, you just multiplied your initial investment 4 times. Now, don’t let this get you too excited, triple zero one stocks can be very, and I really mean that…. very dangerous to trade (lots of things can go wrong, reverse stock splits, going to no bid, de-listing, dilution etc..).
As you can see, figuring out your comfortable price range for penny stock trading can definitely have make quiet an impact on how to find penny stocks before they explode.
If you are serious about the penny stock trading business, it is very important to look for stocks that are not too bloated. Not only will penny stocks with good share structure have a better chance of running all together, but they will also be able to potentially run higher and create more gains for you. Just think of it this way. If you fill up a bath tub with water, and you put a small remote-control motor boat in there. Do you think that this motor boat will be able to make some waves in the bath tub? Of course it will, in fact; it will make quite a splash in there. Now think on the other side of this. Imagine that you put that same remote controlled motor boat inside of a big lake. Do you think that the motor boat will make as big a splash in the lake as it did in the smaller bath tub? Of course not.
The same thing applies to penny stock trading. Example. Lets take penny stock A and penny stock B for example. Hypothetical penny stock “A” has a stock price of $.002 per/share with an Authorized Share Structure of 300 Million shares, and hypothetical penny stock “B” also has the same stock price of $.002 per/share with this time an Authorized Share Structure of 2 Billion shares. Which one of these stocks do you think has a better chance of running harder, quicker and with more vigor? It would of course be the penny stock with the smaller authorized share structure of 500 Million, that is Penny Stock “A”.
A good place to research the Share Structure of a penny stock is once again on the OTCMarkets.com website. If you find a stock that you like, go ahead and type in the name of the stock company or the company’s stock ticket into OTCMarkets.com search box. When you pull up the company’s profile, look around a bit to see if you can find a current share structure. As websites tend to periodically change where they display certain information, I won’t tell you exactly where to look for this information. I’m sure that if you look at a penny stock company’s profile on that website, you should be able to locate the stock’s share structure there somewhere. One thing to make sure.. Make sure that the share structure is updated and current. Sometimes the information on OTCMarkets.com is out of date, and you will have to manually find the share structure information. You can manually look for the info by either calling the company’s transfer agent, doing manual research online, calling the company, or by looking at the company’s filings.
I really hope that you were able to understand this concept. It will really help with your research on How To Find Penny Stocks Before They Explode.
Has a Penny Stock Company Done Many Recent Reverse Stock Splits?
This is also a super important thing to watch out for when researching penny stocks to buy. If you look at a company’s history and see that they have done lots of recent reverse stock splits, there is a pretty good bet that this company might just decide to do another one. I typically will not buy stock in a company if it has done a reverse stock split in the last 3 years or so. This is my opinion is a deal breaker and it tells me that this penny stock company most likely doesn’t care about their share holders and that they like to dilute the stock. This is not always 100% the case, but most of the time it is.
Bottom line in my book, never trust a penny stock company that has done reverse stock splits. The general rule is to never trust any penny stock company, but least of all the ones that do reverse stock splits. This rule definitely is one to be followed by anybody that is real about learning how to find penny stocks before they explode.
What Type Of Chart Should I look For In a Penny Stock?
Lastly, this tip right here is one of utmost importance. As you might already know, when it comes to penny stocks (or any stocks for that matter), charts play a huge role. Without stock charts, one is not able to get a complete picture of the company’s trading history. So, how exactly should you use charts when trying to figure out how to find penny stocks before they explode? Well, for one; I never buy penny stocks where the price of the penny stock has been fluctuating heavily over the last 6 months or so. In fact, I personally like a clean line where the stock has been trading for a similar price fora at least 6 months or so. And preferably, without too much volume.
Let me give you an example.. Hypothetical penny stock company “A” has a good share structure and is currently trading for $.0023 price per/share. For the last 6 months, the price of the stock has fluctuated between $.0021 & $.0024 price per/share. In my opinion, this would end up being a decent candidate for me to do further research on to figure out if this one checks off with all of the criteria that I am looking for before I buy.
Well, we have reached the end of this page on how to find penny stocks before they explode. As you can see, if you follow just some simple rules when researching penny stocks, there is a very good chance that you will be able to find some golden penny stock gems in the rough. I hope that all of the tips that I just shared with you make sense and are easy to comprehend. Nothing that I shared with you here should be hard to figure out. In fact, this all sounds pretty basic; but let me tell you my friend. I have used this along with some of my other criteria when researching penny stocks to pick some real winners.
As you move forward with you penny stock adventures and as you figure out how to trade penny stocks with more and more success, I’m sure that you will end up tweaking some of the tips that I shared and even adding some of your own to your trading style so that you can stay successful. In my opinion, penny stock trading is not hard. What is hard, is the learning part that most people out there will not dedicate enough time to. Most people out there will simply wait for that alert from a penny stock marketing guru and hope that they can get some real gains out of it. Well, I ill tell you this; trading penny stock alerts is in my opinion not the correct way to continually stay successful in the world of penny stock trading.
If you like the information that I shared with you here via this “How To Find Penny Stocks Before They Explode” page, please go ahead and visit our Ultimate Guide On Penny Stock Trading for more tips.
Cheers and Best of Luck to you.
- 1 How To Find Penny Stocks Before They Explode