Penny stock trading lessons for beginners: Penny stocks explained to help you avoid costly mistakes. // strategies tutorial tips basics 101 for dummies robinhood live platform 2017 2018 etrade david moadel
welcome to looking at the markets with David Moadel
today we're going to talk about trading penny stocks specifically going along
penny stocks buying penny stocks
is it a good strategy well if you've seen my other videos you might know what
I'm going to say
or maybe you don't so let's take a look
now the market overall is doing quite well today it's up eight tenths of a
percent and this is what we're looking at now is a ticker SP why the spiders
which tracks the S&P 500 and so the market overall is doing quite well today
and when I say the market overall i'm referring to
mega cap stocks large-cap stocks we can see that the Dow Jones is up nearly nine
tenths of a percent financials are up are up almost one and a third percent so
it's a big update and people who bought mega cap stocks
most of them are celebrating today so here's a question to think about
does a rising tide lifts all boats because that's what they say right all
the rising tide lifts all boats
meaning that when the market overall such as the S&P 500 goes up a lot then
individual stocks go up a lot right
well that might be true for mega cap stocks most of them probably did go out
probably did go up today but that doesn't necessarily apply to penny
stocks penny stocks seem to live in a world of their own
irrespective of the overall market sentiment
so I took a sampling of some penny stocks and if you look on the left side
of the screen here we can see that just because the market is doing well
doesn't mean that penny stocks are participating and so we're going to look
at some examples and I think we're going to see a pump and dump pattern here
this is a penny stock and by penny stock I don't literally mean a penny
ok they don't necessarily cost a penny some of them do but anything less than
five dollars i consider to be a penny stock
so here's Great Basin ticker GBS n and we can see the three-day chart here and
we can see it went sideways and then up and I feel bad for people who feel sorry
for people who bought up here because big gap down boom and so far today it
hasn't really recovered and it's down nearly a fifth of a percent 19 .
twenty-seven percent down in one day
not even a full day it's it's only about 12 30 almost could go down more could go
up more but I imagine this would be pretty devastating to anybody who bought
at the end of the day yesterday
let's take a look at some more here is X ticker XE om xterra communications down
almost eighteen percent so far
just today and this is in one day and we can see the you know it's flat flattish
for a day or for a couple days and then again in the morning sometime in the
morning early in the trading day boom just down and not recovering so not
sara lee a pump and dump here but flat and dump
we can look at inap another very low priced stock two dollars a share two
dollars in a penny down almost fourteen percent so far today and we'll wait for
that chart to pop up there
yeah we can see pretty similar huh
we've got two flat flattish maybe even going up a little bit and then the dump
not fun the morning Gap down and then just getting worse all day long
here's let's take a look at I am I
this one is exactly a dollar right now per share and it's down almost
twenty-six percent so far today
yeah that's that's gotta be rough and pretty flat for a couple days
I guess we can call this flat and dump just down and down and down getting
worse getting worse by the hour by the minute we could take a look at some
others i think you get the idea
all right here's a you know I nu v
I mean a new voting think almost eighteen percent down in one day
pretty similar pattern here flat for two days and then the dump and then I
suppose we could look at one more
or maybe two more
TRX
low priced so low priced stock down a little bit over fourteen percent in one
day and look at that similar pattern flat flat and in the morning the dump
gap down and you know we get the idea i don't have to keep showing you these
over and over
we've got UTI down almost thirteen almost fourteen percent TRX down a
little bit over fourteen percent
it's it's it's rough it's rough in the world of penny stocks
especially if you're going long you're going to buy penny stocks be aware that
just because the markets going up
overall just because the S&P 500 is going up doesn't mean that you get to
participate in that as penny stocks are very separate in many ways from the
overall market or for mega cap stocks and if you think about trading penny
stocks please be very careful if you have to trade them at all
personally I don't trade them in all I don't consider myself a gambler
when it comes to stock trading and investing
if you've if you must if you somehow feel like you must invest in penny or
trade penny stocks
how about think about this maybe just don't hold overnight because as we saw
from these examples
a lot of these huge dumps happen it as a gap down overnight and then you wake up
the next morning and you lost
you know the fourteen fifteen twenty twenty-five percent in one day and
that's got to be you know that's gotta be rough to go through that
so if you have to hold them maybe just don't hold him overnight or better yet
don't buy penny stocks at all
I'm not saying that every penny stock is going to go down like this
but many of them do it didn't take me very long to find these examples
it only took a matter of minutes to wade through the
see of penny stocks to find some that dumped today and today is just one day
all right who knows how many more dumped this week or in the past month and once
you dump it it it's not like apple or or you know Microsoft or something like
that
those mega decks or coca-cola mega cap stocks tend to recover sooner or later
if you hold them long enough
because the market overall tends to recover if you hold it long enough
penny stocks you can easily buy it and then have a big dump like this and now
have it never come back ever
and so you're holding shares that aren't worth much if you can even find somebody
to buy it
depending on the volume so be very careful with penny stocks I don't
recommend investing or trading them
yeah but the decision is yours
so if you'd like more help with trading investing
if you'd like to make a trading plan I hope you have a trading plan because if
you don't it's probably not going to end up well so feel free to contact me
anytime
my name is David Modell last name is spelled m.o.e a de el and my email
address is David Modell @ gmail.com
if you liked this video feel free to give it a thumbs up give it a like give
it a subscribe if you want to subscribe to my channel I'm always trying to give
you lots of useful content that can help you things to think about things to help
you in your trading and investing and feel free to contact me at any time
thanks a lot and i hope to hear from you soon
yeah