If you want to know the top penny stocks to buy, you should absolutely read this article.
Apart from looking at the top penny stocks, it also explains a lot about why each of the penny stocks are among the top.
First things first…
Let me ask you a question.
If you went to a second hand store with the purpose of finding something there you could resell for a profit, then what would you tend to focus on?
Chances are you’d focus on anything that had to do with consumer electronics right?
Maybe you’d try to focus on any form of sports memorabilia that was there. I’ve seen instances where entire show boxes of football cards were being sold at these types of stores.
You might also try to carefully look at any books that were on the shelves in order to see if they had any value right?
What does all of this have to do with making money from penny stocks and which ones you should choose?
Well we want you to consider everything we just said.
If you think like what we just stated above, then you’re already in the wrong mindset in order to have success with penny stocks in general. Want to know why?
Well virtually everything we said would be the exact thing that was on the minds of other people going into those second hand stores looking for something to resell for a profit.
These would be the people who became your competitors and it would be them that made things tough for you. Penny stocks are like cheap baseball cards.
Remember the cards you purchase in a pack for cheap hoping you’d get lucky and find a gem inside of it?
Think of penny stocks this way. Yes, you can purchase them for cheap, but the odds of finding one that’s going to be a winner for you are very high.
You have to focus on doing things differently from the way everyone else does it, otherwise you’ll be in that pool of people who lose most of their money playing the penny stock market.
With all of this being said this brings us to our first main point. You came to this article hoping that we were going to provide you with ten specific penny stocks to invest in right?
Well why do you think we’d do this?
If we know a penny stock is truly hot, then we would want to capitalize on it first.
By the time we were telling you the information it’s highly likely that any positive volatility for the stock would be gone. You’d likely be getting in on the wrong end.
We’re not saying getting tips about particular penny stocks is all bad, but understand just how valuable information really is in this game. It’s like horse racing betting.
If I know a horse that’s going off at 25-1 is due to run the race of its life that day, then am I going to tell everyone about it?
This would decrease the odds; maybe even make the horse an odds on favorite.
No, I would keep as quite about it as possible and get down my money in a way I could be sure wasn’t going to depress the odds.
Penny stocks work the same.
What you need to do in order to win in this game is use discernment in regards to focusing on specific types of penny stocks.
You would also need to apply the same discernment if you were going to use any picks given to you. We believe this is what will ultimately lead to success.
Best and Top 10 Penny Stocks To Buy and Why
With that being said we’re going to provide you with 10 types of penny stocks to purchase and why.
We’re not going to provide exact names of penny stocks, but type. Your own discernment will be what you have to use in order to separate the potential winners from the potential users.
You don’t become mechanical this way and you get rewarded for your research and analytical thinking.
1. Penny Stocks That Are Volatile Whether It Be Up or Down
Volatility is your friend in this game. When you see movement it means someone is making money.
Yes, some people are losing money, but there are also people who are making it. Volatility means that things are flowing.
You want to use your research skills in order to understand why this is. Is it a penny stock you can short?
Can you potentially hedge things out a certain way?
Your research and discernment are what will keep you away from simply jumping on board a stock simply because you believe it’s bound to go up or bound to go down.
Volatility is your friend though so don’t be afraid to focus in on penny stocks that have it.
2. Penny Stocks That Are Very New on the Market
These are stocks that haven’t been around for a long time at all. The cost is going to be dirt cheap to get in on them.
All you might have is a basic idea of what the company or so called company is supposed to be into.
In such an early stage the goal is to get start-up money.
The reason you’d want to key in on these young penny stocks is because even the smallest piece of good news or bad news can move them.
Seeing as how the stock is still so young it hasn’t had a good chance to experience serious fluctuations based on information yet or at least not too much of it.
You want to see if you can get in just in time to be on the right side of a major swing.
3. Options That Are Getting Any Sort of Media Attention
There’s one reason why a penny stock that gets any sort of media attention has value.
And this is because there’s going to be major movements on them.
Any company that gets mentioned in the media in any way is going to likely become overvalued.
With penny stocks the move doesn’t have to be much in order for the percentage gain to be huge.
The media coverage gives you the chance to breakdown what was said, dissect it and determine how people might react to it.
Once you did this you could invest accordingly.
4. Any Option That Has Had a Major Move in the Past 6-12 Months
When we say major move we mean major move. If a penny stock went up very high suddenly or down a lot suddenly, then once again there should be some reason as to why this was.
You should be able to uncover this if you do some research. It might have been a pump and dump, which we hate by the way.
It might have been some major announcement that never fell through.
Even if you don’t find anything you can at least understand a little better why serious moves in price take place.
The key thing you want to focus on here is not just a major movement, but how fast it happened.
5. Penny Stocks at All-time Lows
If a stock was once $0.20 and not its $0.02 cents after it showed a consistent period of being on the higher end of that, then you can bet your shirt that I’m going to try and research why this is.
My main question would be if the stock lost such a high percentage of its value, then why didn’t it go to zero altogether?
What’s keeping the company afloat?
If I can understand this, then I’ll be willing to purchase the dirt cheap stock feeling pretty confident that it will continue to not go to zero.
Seeing as how I’m getting in at a dirt cheap price, then even a price increase of just a few cents can mean several times my investment back.
You would just need to be sure you sold super-fast.
6. Penny Stocks on Hot Sheets
Collect a list of several websites that give out free penny stock selections.
See if you can research their picks for the past few months.
No, you’re not actually planning on doing what any of them say.
You want to see just how much information is available about the stocks they give you.
Any information gives you a chance to pick it apart and determine if there’s any value there or not. You might spot something no one else did.
It’s doubtful that you’ll find that by blindly following a tip sheet that you’ll make money very quickly.
If you can handicap the selector though, then this can be a powerful strategy to find the one gem in a pile of junk.
7. Associative Penny Stocks
When we say associative we mean looking at any penny stock that’s in any way related to a serious blue chip player in the game.
This can even be in terms of an idea that hasn’t come to fruition yet. The reason why this is so powerful is because the mind tends to think associatively.
If you see that a company is looking to do something similar to what a major blue chipper is already doing, maybe in a different way, then there’s a good chance this stock is going to be overvalued.
If you’re able to bet against it, then consider doing this. The reason why we say if is because sometimes it’s hard to short penny stocks, especially if they have low daily trading volume.
8. Penny Stocks That Are Frozen Price Wise
Remember when we said that volatility is your friend in this game?
Well a stock that’s not doing anything and hasn’t been doing anything can also be your friend.
Think about it, if everyone is moving around like maniacs and there’s one person standing as still as a statue and has been doing so for a while, then aren’t you going to be curious as to why this is?
Isn’t this person going to stand out like a sore thumb?
Well it’s the same when it comes to penny stocks. Such a company is at least stable for the time being, which shows that whatever idea it’s based on is still alive.
The key to success with these types of stocks would be getting them for as low as possible. Losing a big percentage hurts less when you know it’s based off of a smaller overall total.
9. Penny Stocks With Large Daily Trading Volume
If your goal is to protect your investment from going to zero, then looking for penny stocks with large trading volume will certainly help you.
For starters, the large daily trading volume means you wouldn’t struggle to get out of a position should things start to move against you.
Second, strong daily trading volume means that there’s interest in the stock, whether it be for good reason or bad reasons.
In any case you can look into this and likely find some indicators.
10. Penny Stocks That Are on the Higher End in Terms of Pricing
The lower priced stocks have the chance to earn so much more money based on small movements.
So this is going to come with a higher possibility of manipulation. If you focus on those stocks that are higher priced, then movements are going to be as dramatic.
These stocks will be less prone to manipulation.
Now is this always the case? The answer is no, but you’ll find that the company behind the higher priced penny stocks are a little more serious about what their end game is for the most part.
These are the types of penny stocks you want to focus on and we’ve provided you with several reasons why.
Now before we go we want to give you a little money management tip when investing in these. Try to have a fairly large investment bankroll.
We would say about 25-50 lot opportunities (100 shares equals one lot).
Now all you would have to do is focus on risk management in order to protect your bankroll.
The only negative with this approach is you’d need to be sure that the lot sizes were fairly similar. You would only want to increase your lot size for options you were convinced based on your research warranted the higher risk.