How to Find Penny Stocks Pre-Spike

Learning how to find penny stocks pre-spike isn’t difficult… as long as you put the work in. I’ve spent decades studying penny stocks and the chart patterns that allow me to spot my penny stock winners.

But what if you’re just getting started? Selecting the right penny stocks to watch can seem daunting, but I’ve put together this article to help you learn how to find the best penny stocks to buy — ideally before they explode.

Let’s dig in…

What Is a Penny Stock?

A penny stock is a security that trades for less than $5 per share.

Although penny stocks can be found on the major Wall Street exchanges, I trade a lot of over-the-counter (OTC) penny stocks listed on the OTC Markets. There are three tiers of OTC markets: OTCQX, OTCQB, and pink sheets. OTCQX is the most-regulated market, while pink sheets are the least regulated. This means the lower you go, the more sketchy the stocks.

While understanding the nature of penny stocks is crucial, it’s equally important to explore the broader landscape of these investments. There’s a vast world of penny stocks out there, each with its unique characteristics and potential for profit. However, it’s essential to remember that not all penny stocks are created equal. Some may offer higher returns, while others might be more stable. It’s all about finding the right balance for your investment strategy. If you’re interested in diving deeper into this topic, consider reading our comprehensive guide on penny stocks.

A Comprehensive Penny Stock Guide

Get my weekly watchlist, free

Sign up to jump start your trading education!

Send me your weekly watchlist

100% Privacy. I will never spam you!

Penny stocks are the underdogs of the stock market, often overlooked, yet they have the potential to deliver substantial returns. They’re risky, volatile, and not suitable for all investors, but if you’re willing to stick to a good strategy, penny stocks could be worth exploring.

Just remember to never risk more than you can afford to lose.

How to Pick a Potential Penny Stock Winner Pre-Spike

How do I pick penny stock winners before they spike? I use technical analysis — support and resistance levels and patterns on the chart.

This is the bedrock of trading — but it has much less to do with investing. At its core, investing is about building a diverse portfolio that can withstand market fluctuations. One way to achieve this is by investing in dividend stocks. These stocks can provide a steady income stream, helping to offset potential losses from day trading. To learn more about how to analyze the fundamentals and technicals of dividend stocks, check out our article on investing in dividend stocks.

If you can read stock charts and find reliable patterns, you can sometimes find penny stocks before they spike. Does it work every time? Of course not.

However, the more you learn and study, the better your penny stock picks can become…

Sign up for my NO-COST weekly penny stock watchlist here!

How to Find Penny Stocks

You can find penny stocks on major exchanges like the NYSE and NASDAQ, as well as the Over-the-Counter (OTC) markets. Use a stock screener to filter for low-priced stocks with high volume and check company fundamentals.

To invest, start by researching a company’s history, stability, and past price movements to gauge risk. Look for catalysts, such as product launches or technological advancements, that may signal potential growth and value increases.

Share Price and Valuation

Share price and valuation contribute to a company’s market capitalization (a.k.a., market cap). Penny stocks are typically considered micro-cap, which means they have a low valuation. But that’s not a bad thing.

Big-cap stocks are the major companies with huge valuations and high share prices.

More Breaking News

• Rigetti Computing’s Quantum Breakthrough: Is This the Dawn of a New Era in Tech?
• BTCS Stock Sees Remarkable Volatility: What’s Driving the Change?
• First Majestic’s Silver Lining: Will the Momentum Last?

Beware of Dilution

Dilution occurs when the number of outstanding shares increases. I avoid trading stock in a company that has recently had a number of its options exercised or issued new shares.

What Happens When a Stock is Overbought?

When a stock is overbought, it means that it has been aggressively purchased to the point where its price has likely been inflated and might be due for a correction. Identifying overbought conditions can help you avoid buying into a stock just as it’s about to take a nosedive. Remember, timing is everything in this game.

How to Pick a Potential Penny Stock Winner Pre-Spike

Traditional stock traders buy low and sell high. My students often take things one step further, both buying low and selling high, and then selling short when prices begin falling and buying to cover.

This can help us make a profit both on the way up and the way down.

In my “How to Make Millions” DVD, I go over my favorite catalysts that can cause stock spikes. If you want a front row seat to my favorite penny stock trades, sign up for the Supernova Alerts service to see them in action.

I’ve developed the following criteria and requirements for finding the best stocks to buy over my 20 years of trading. Learn them. Love them. And use these rules as you work toward being a better penny stock trader…

Rule #1 — Look For Stocks That Are Already Spiking

One of the quickest ways to identify a spike in the making is to start by using your stock screener to find stocks that are already moving.

You should be watching for news catalysts. With penny stocks, there are a lot of information inefficiencies. So even if you miss the initial news, you might still be able to catch a part of the move.

You also want to keep an eye on low-float stocks. These small-supply tickers have greater potential for big moves.

The flipside of this: you want to watch for volatility AND liquidity. Without enough liquidity, you won’t be able to exit your trade at the right time, potentially the difference between a profit and a loss.

Rule #2 — Look for Potential Breakouts That Are Reaching New Highs

I look for stocks that can break out to new highs — especially those still up on the day and holding morning highs.

If you see a play like this on a Friday afternoon and the stock’s still holding its morning high, there’s always the potential for a short squeeze into the close. Short squeezes are a play that all penny stock traders need to learn to recognize.

But always be ready to cut losses quickly. Sometimes when potential breakouts reach new highs, they can’t maintain their value above the previous resistance level.

Rule #3 — Bet on Price Action

Price action gives you the real story about a stock. Is it breaking out to a new high? Has it crossed VWAP? All the news sites in the world won’t tell you when these things happen, but a stock’s chart will.

Believe it or not, watching price movements can be educational. It sounds boring, but you’ll start to see patterns you wouldn’t have caught otherwise. Make it into a game. Which way do you think the stock price will move next?

Once you get a sense for a stock’s chart, start with small positions. Alternatively, try paper trading on StocksToTrade and get a feel for how it works without the financial risk.

Rule #4 — Do Your Research

I hate to say it, but a big reason most penny stock traders fail is because they’re lazy. They don’t want to do the research that my students learn how to do. They want someone to tell them what to do, but that’s not how I teach.

If you're lazy, I beg you to unfollow me & spare me from wasting a second of my precious life own your useless ass. Sorry to be harsh, but life is short and lazy people & I do not get along. Go make your excuses & whine about your issues to someone who has compassion for I do not

— Timothy Sykes (@timothysykes) February 6, 2022

I don’t want to give you fish. I want to teach you how to fish. That way, you can learn how to find penny stocks on your own.

Research is how I locked onto ​​Paratek Pharmaceuticals Inc. (NASDAQ: PRTK) for a $4,350 profit in 2020 (starting stake $14,010). That same day, Eastman Kodak Company (NASDAQ: KODK) was going supernova off of news of federal funding for developing pharmaceutical ingredients. I follow industry trends, so I was looking for sympathy plays.

I remembered PRTK previously had news about federal funding as well. And it had the potential to spike as a lower priced sympathy play.

It had already spiked slightly on increased trading volume when I bought at $4.67. Then it sped up and was even halted. After the halt I sold at $6.12.

If you want to know how to find the best penny stocks to buy, remember to look for former runners, news, hot sectors, and sympathy plays.

Success requires hard work and determination. It takes the ability to do what other people won’t do. Proper planning isn’t fun, but it’s necessary.

Think Like a Retired Trader

If the rules I’ve listed above tell you anything, it should be that I don’t make a move unless there’s a good reason.

That’s why I like to think of myself as a retired trader.

I’m not going to come out of retirement for a so-so trade — just like a retired athlete won’t come back to play for a minor league team. I don’t waste my time, and neither should you.

Thinking like a retired trader can stop you from making emotional plays. You might not have a trade every day, and you can work to avoid falling into the overtrading trap. It’s how traders lose everything they’ve built.

I can teach you these patterns, but I can’t teach you the discipline it takes to be a successful penny stock trader. Only you can do that for yourself.

How to Tell When Stocks Will Rise

Crystal ball, anyone? If only it were that easy. Unfortunately, predicting the future isn’t part of the stock trader’s toolkit. But we can use tools and indicators to spot potential upward trends. Pay attention to high trading volumes, positive news releases, and a company’s overall financial health. And remember, trends are your friends. Stick with them, not against them.

Successful day trading also involves an understanding of price movements, market trends, and company fundamentals. Most of all, it requires the right knowledge and skills. For a closer look at what it takes to succeed in day trading penny stocks, we recommend reading our detailed guide on penny stocks day trading.

How to Select a Penny Stock Broker

The top penny stock brokers have reasonable fees and better executions. They’re also supportive and provide a user-friendly interface.

Prioritize Transparent and Competitive Fee Structures

Understanding brokerage fees is crucial for traders, especially when dealing with low-priced stocks and small-cap investments. Transparent fee structures foster trust and satisfaction, ensuring that traders know exactly what they’re paying for. Over the years, I’ve seen how hidden fees can erode profits and create frustration. It’s essential to choose a broker that clearly outlines all charges.

Here are common fees typically charged by brokers and their impact on your investment returns:

• Trading fees: Costs incurred for buying or selling securities.
• Commission fees: Charges for executing trades on your behalf.
• Annual fees: Yearly charges for maintaining an account.
• Inactivity fees: Penalties for periods without trading activity.
• Account maintenance fees: Ongoing costs for account services.

These fees can significantly affect your overall returns, particularly in the volatile penny stock market where every cent counts.

Evaluate Trade Execution Quality

Trade execution quality is a critical factor in achieving optimal trading outcomes. It refers to how effectively and efficiently a broker completes your buy or sell orders. High-quality execution can mean the difference between a profitable trade and a missed opportunity.

To evaluate trade execution quality, consider the following criteria:

• Speed: The time it takes to execute a trade. Faster execution can capture better prices.
• Price Improvement: The ability to get a better price than expected.
• Likelihood of Order Execution: The probability that your order will be fully executed at the desired price.

By focusing on these aspects, you can ensure your trades are executed under the best possible conditions, maximizing your trading performance.

Assess Platform Usability and Tools

A user-friendly trading platform is vital for effective trading. Features like intuitive design, accessibility, and mobile compatibility contribute significantly to a trader’s experience. Over the years, I’ve tested numerous platforms and found that ease of use can directly impact your trading efficiency and success.

When comparing trading platforms, consider the following tools that enhance trading and analysis capabilities:

• Advanced charting tools: For detailed technical analysis.
• Automated trading systems: To execute trades based on predefined criteria.
• Real-time market data: Essential for making informed decisions.
• Customizable dashboards: Tailor the platform to your specific needs.

These tools can significantly enhance your trading strategies and performance, providing you with the edge needed in the competitive market.

Consider the Level of Customer Support

Reliable customer support is crucial in brokerage services, especially when resolving trading issues or seeking informational support. Quality support ensures that you can quickly address any problems and get back to trading without significant disruptions.

Different forms of customer support channels include:

• Phone support: Direct and immediate assistance.
• Live chat: Real-time help through online chat.
• Email: For less urgent queries or detailed support needs.
• FAQs: Self-service for common questions.

Evaluating the effectiveness of these channels can save you time and stress, ensuring you have the help you need when you need it.

Look for Additional Features

Additional features can set a brokerage apart, adding value for various types of investors. From beginners to advanced traders, these features can enhance the trading experience and provide educational and strategic benefits.

Key additional features to consider include:

• Educational resources: Tutorials, webinars, and articles to enhance trading knowledge.
• Social trading platforms: Follow and copy the trades of successful investors.
• Customizable interfaces: Tailor the platform to suit your trading style.

These features can offer significant advantages, helping you stay informed and make better trading decisions.

Research Regulatory Compliance and Reputation

Regulatory compliance is fundamental in the brokerage industry, ensuring that your investments are protected and that the broker operates within the legal framework. Choosing a broker with a solid regulatory standing can prevent potential legal and financial issues.

To assess a broker’s reputation, consider the following:

• Reviews and ratings: Feedback from other traders.
• Regulatory actions: Any past violations or sanctions.
• Industry reputation: Standing within the financial community.

By thoroughly researching these aspects, you can select a broker that not only complies with regulations but also has a strong reputation for integrity and reliability. This diligence is crucial for safeguarding your investments and achieving long-term trading success.

Tips to Remember When Investing in Pre-Spike Penny Stocks

Here’s the thing about pre-spike penny stocks — they can be a gold mine, but they can also lead you down a rabbit hole. You’ve got to be careful. So, how can you increase your chances of success?

Utilize Chart Patterns

Chart patterns can be your best friend. Recognize setups like flags, pennants, and head-and-shoulders to identify high risk-to-reward scenarios.

Monitor Unusual Trading Activity

Always be on the lookout for stocks with unusual trading volumes or price swings. This could be a precursor to a significant move.

It’s a good idea to monitor stocks that consistently have a lot of trading activity. These stocks can offer lucrative opportunities for quick gains, especially if they are supported by strong catalysts like positive news or earnings reports. Keeping an eye on these stocks can provide early entry points before they potentially spike. For an in-depth look at some of the most actively traded penny stocks and the factors driving their movements, check out this article on the most active penny stocks.

Don’t Put All Your Eggs in One Basket

Diversification is crucial. Never put all your capital into a single stock, no matter how tempting it seems. Spread your risk across different sectors and industries.

Set Stop Losses & Take Profits to Limit Risk & Reward Yourself

Set strict stop losses to limit potential downside, and don’t forget to take profits when you can. It’s important to reward yourself and secure gains.

What Should You Consider When Picking a Broker?

Choosing the right broker is critical. Look for low fees, a reliable platform, excellent customer service, and easy access to the markets you’re interested in.

Robinhood has gained popularity among traders for its user-friendly interface and commission-free trading. And these traders are hungry for penny stocks. Check out my list of top penny stocks on Robinhood here.

Does the Broker Have an Online (and Mobile) Trading Platform?

Find out whether you’ll have access to both an online and mobile version of the broker’s app. That way, if a trade goes against you, you can access your trading account whether you’re sitting at home in your pajamas or lounging by the pool at a hotel in Fiji.

Get a free copy of my book “An American Hedge Fund” to read about the trade I made from a highway rest stop.

When it comes to a broker, also make sure it offers great customer service. This is the company that will be holding your money and responsible for good executions. So when you have a problem, you want to be sure you can get through to someone and have any problems resolved quickly. Always check the customer service reviews page before deciding on a broker.

Fees

You’ll definitely want to know what you’ll pay for orders you execute with a broker. Although most brokerage services have gone to a commission-free structure, you’ll still have fees for locating shares to short, interest on borrowed shares, and monthly fees for real-time data.

Make sure you know the details before you get started.

Broker-Mandated Regulations for Trading Frequency

You probably won’t have to worry about this. Most places don’t require a minimum number of trades per month, unless they’re offering a rebate on monthly fees for higher-frequency traders.

If your broker requires you to trade at a certain frequency, bow out. As I mentioned before, you need to think like a required trader. If the stars don’t align, don’t trade.

Minimum Deposit

Many online brokers don’t require a minimum deposit anymore. Of course, you’ll have to fund your brokerage account if you want to trade.

Do your own research on the minimum deposit requirement for the broker you’re interested in. Also remember you’ll be subject to the pattern day trader rule (PDT) if you fund your account with less than $25,000, no matter which broker you use. (Unless it’s offshore, which I don’t recommend).

List of 5 Penny Stocks to Watch in 2024

My list of the best penny stocks to watch in 2023 includes:

• NYSE: AMC — AMC Entertainment Holdings Inc — The Meme Stock Winner That Jack Crushed
• NYSE: GME — GameStop Corp — The Supernova Meme Stock With the Roaring Kitty Catalyst
• NASDAQ: FFIE — Faraday Future Intelligent Electric Inc — The 9,600%* Meme Stock Runner That Jack Nailed
• NASDAQ: MGOL — MGO Global Inc — The Earnings Meme Stock Winner
• NYSE: HIMS — Hims & Hers Health Inc — The Breaking News Weight Loss Winner

No, that doesn’t mean that I’ll trade them. Learn the patterns that work best for you — you might see a chance to use them with these stocks!

AMC Entertainment Holdings Inc (NYSE: AMC) — The Meme Stock Winner That Jack Crushed

My first 2024 penny stock pick is AMC Entertainment Holdings Inc (NYSE: AMC).

Jack Kellogg is one of my most successful students.

He joined the Trading Challenge in 2017 after graduating high school. And in 2020, during the initial meme-stock craze, he passed the $1 million milestone.

Jack didn’t stop there …  Currently, he’s sitting at $12.5 million in trading profits (that includes his losses).

Take a look at his profit chart below:

There’s no telling what his account could look like at the end of 2024. We’re in a HUGE meme-stock resurgence right now. 

Already, Jack’s been banking on some of the biggest runners in the market. AMC is a prime example.

It’s a legendary meme-stock runner from 2020 and 2021.

On Sunday, May 12, meme-stock trader, Keith Gill posted a cryptic image to X. As a direct result, the share price of AMC spiked the next day, Monday, May 13.

I covered the whole story in this blog post.

You have to understand: the resurgence of one meme stock can affect the whole sector. AMC wasn’t the only meme stock to spike.

• GamesStop Corporation (NYSE: GME) spiked.
• BlackBerry Limited (NYSE: BB) spiked.
• Bed Bath & Beyond would have spiked too if it wasn’t bankrupt and delisted …

These stocks are all HUGE sympathy plays in the meme-stock sector.

Jack’s Profits

Jack experienced this volatility once before, in 2020 and 2021 when he crossed $1 million in profits.

And now he’s ready to bank again. Take a look at two of his AMC trades below:

Starting stake of $3,599,367:

Starting stake of $462,745:

AMC passed $11 per share on May 14. In total, it spiked 300%* before pulling back.

But back in 2021, AMC spiked past $60 …

(The yearly chart shows AMC spiked much higher because of a reduction in the total share count. It’s a ratio issue.)

There’s no telling how high the price could spike in 2024. Currently the chart is consolidating around $4, more than 50% off of the highs.

Wait for the chart to match one of the patterns within our trading framework. We could see a #5 bounce any day.

GameStop Corp (NYSE: GME) — The Supernova Meme Stock With the Roaring Kitty Catalyst

My second 2024 penny stock pick is GameStop Corp (NYSE: GME).

You probably heard about the GameStop spike in 2020 and 2021.

This meme stock influenced the subsequent 2021 spike in AMC shares as well …

(Each stock boasted a MASSIVE short ratio, but social media and the Reddit armies took a greater liking to GME.)

It was one of the most remarkable moves the market had seen in years. As evidenced by the complete lack of understanding from major media sources lolol.

My students and I knew exactly what was happening … And right now, in 2024, it’s happening all over again.

Let me explain:

GME and AMC don’t deserve to spike +100%. These are horrible companies with horrible financials.

Because the stocks are crap, a lot of major Wall Street players were shorting them. It’s a good strategy: Crap stocks will probably drop.

There’s One Major Issue

If there are too many short sellers in a stock, the strategy can become overcrowded. That’s the “short ratio” that I spoke about earlier.

When short sellers exit a position, they buy-to-cover. And if the short ratio is too high, the momentary bullish momentum can cause a domino effect of short sellers blowing up.

It looks like a massive stock spike that traders are banking off of. But in reality, it’s mostly short sellers blowing up. Except for a select few traders savvy enough to profit off the common price action. Like me and my students.

We knew GME and AMC were going to run after the Roaring Kitty social media post by Keith Gill.

And Jack banked off of GME just like he did on AMC.

The spike got to 270%* before it pulled back…

Take a look at his trade below, with a starting stake of $249,873:

And like AMC, there’s no telling how high GME could spike!

It’s still below the highs from 2021 …

FOMO is a powerful emotion. Everyone who missed out on GME last time is likely itching to bank this time around.

It’s very possible the true GME spike is yet to come.

Prices are consolidating around $20 right now. That could be the base for its next spike …

Don’t risk your hard earned cash on a massive profit opportunity like this. We’re tracking these meme stocks LIVE every day. Follow the process that we use to profit:

>> Join The Next Trading Live Stream <<

Take notes from professionals like Jack Kellogg and myself.

Faraday Future Intelligent Electric Inc (NASDAQ: FFIE) — The 9,600%* Meme Stock Runner That Jack Nailed

My third 2024 penny stock pick is Faraday Future Intelligent Electric Inc (NASDAQ: FFIE).

You don’t need to be a professional trader to profit off of these moves.

Jack is one of the best traders in our community. But there are A LOT of people profiting right now who aren’t as successful as Jack.

See one of my student’s posts on X that I reposted below. They traded another hot stock right now, Barnes & Noble Education Inc. (NYSE: BNED):

Jack’s success is something to strive for. But recognize that all of my students start from humble beginnings. And we take it one trade at a time …

FFIE is the biggest meme stock of 2024 thus far. In one week it spiked 9,600%.*

Here’s one of the trades that Jack made on FFIE, with a starting stake of $56,700:

Now, most small-account traders don’t have $50k to put toward a stock.

That’s OK.

FFIE never traded above $4 … You could start with $100 in your account. Heck, you could start with $10.

That’s the beauty of this niche: Massive percent gains are accessible for traders with small accounts.

Even for brand new traders, there are opportunities to profit!

Here’s how you can capitalize:

Thanks to the emergence of AI in 2023, I built an AI bot capable of following my trade process. It’s the same process all of my millionaire students and I use to profit.

The first week of the FFIE stock spike, my AI bot XGPT alerted four different profitable trade entries!

See the chart below, every candle represents one trading minute:

>> Get the next AI stock pick <<

You don’t need to be an expert.

You just need to follow the rules.

MGO Global Inc (NASDAQ: MGOL) — The Earnings Meme Stock Winner

My fourth 2024 penny stock pick is MGO Global Inc (NASDAQ: MGOL).

This market is perfect for small-account traders. It’s perfect for me and my students.

In case you weren’t convinced, I’ll keep dropping examples.

Take a look at the X post that I included below:

Ummmmm … 20% is not small, Ricardo, lol.

20% is huge!

Hedge fund managers would LOVE to make 20% on the year.

And my students and I are finding opportunities like this within a single day in the 2024 stock market.*

Let’s explore a follow-up opportunity on MGOL:

On May 21, the stock spiked 570%* before noon.

Most traders missed out … Unless they were watching the Breaking News system.

Take a look at the premarket alert we got for MGOL after the company announced filing its Form 10-Q for earnings. Every candle represents one trading minute:

And if my students missed the Breaking News alert, that afternoon the XGPT AI trading bot alerted a potential overnight swing trade.

The chart is below, every candle represents one trading minute:

Whether it was from Breaking News or XGPT, my students had ample time to build a position on this intense runner.

The spike measured 730%* in less than two days.

Keep an eye on key support levels like $1.25. It could rally and push higher in this intense 2024 market.

Hims & Hers Health Inc (NYSE: HIMS) — The Breaking News Weight Loss Winner

My fifth 2024 penny stock pick is Hims & Hers Health Inc (NYSE: HIMS).

On Monday, May 20, my students and I got a Breaking News alert stating Hims & Hers Health Inc. (NYSE: HIMS) announced consumer access to GLP-1 injections.

The injections help consumers self-administer medications for diabetes and weight loss. And the move reportedly decreases the overall cost for consumers.

As a direct result, prices spiked 35% that day. And my students were alerted right when the news came out.

Take a look at the chart below. Every candle represents one trading minute:

It’s possible that the stock pushes higher in the next few days …

I’ve seen advertisements for this company all-over social media. It’s a big name in the at-home-health-care sector.

But in the short term, I traded it for some sizable profits thanks to the Breaking news alert. You can see my trades below.

With a starting stake of $41,853:

With a starting stake of $73,800:

For the largest profit opportunities …

Use Breaking news to find these spikes early! And keep an eye on HIMS’ price action as traders continue to digest the company’s news.

My Favorite Platform to Trade Penny Stocks

If you’re looking for my favorite penny stock trading platform, check out StockToTrade.

I might be a little biased (I helped develop the software and I’m an investor), but I think StocksToTrade is one of the best trading tools on the planet. It has custom stock screeners made by traders, for traders. You can use it for everything from paper trading to price event alerts.

You’ll have access to more resources, better-quality information, and high quality catalysts with the add-on alerts service Breaking News Chat.

Get Breaking News and StocksToTrade for the next 14 days — only $17!

I also have a NO-COST weekly watchlist of my stock picks. But this newsletter isn’t an example for you to copy — it’s for you to study the process.

Remember, do your own due diligence and make your own trades. Different people trade for different purposes, and your goals may not be the same as theirs.

How to Protect Yourself from Penny Stock Scams

The penny stock world is rampant with scams. New traders tell me how they’ve lost money buying and holding stock pumps ALL THE TIME. They usually fall victim to the hype and promises of big earnings.

• When you’re scanning for potential winners, look for insider buying and selling. This can be a sign that something fishy is going on.
• Follow social media trends to understand market sentiment. If a stock is buzzing on Twitter or Reddit, it might be worth a closer look.

However…

Never listen to Internet stock promoters sending out mass emails about so-called no-risk penny stock picks. If you receive them, you’re probably the target of a pump and dump scam. Run the other way!

Promoters often inflate a penny stock’s price so they can profit. Naive traders lose because they’ve been tricked into thinking that penny stocks are long-term investments.

One of the best steps to protect yourself is to only listen to traders who show all their trades, like my students and I do on Profit.ly.

Tread with caution and seek advice from experienced traders if you’re not sure about a stock. And NEVER trade a stock because someone told you you should.

Potential Penny Stock Payoffs

Will you get rich tomorrow from penny stock trading? Probably not. Instead, develop a good basis for trading by investing in your education.

I turned just over $12,000 into more than $7.4 million in profits. Some of my top Trading Challenge students have profits well into the seven figures, and many more have six-figure gains.

But that doesn’t mean everyone finds success or achieves profitability. Chances are, you’ll experience losses. You won’t make the right trading decisions and get big returns overnight. Trading is one of the hardest things you’ll ever learn, so be patient and study hard.

Join My Trading Challenge

I can teach you these patterns, but I can’t teach you the discipline it takes to be a successful penny stock trader. Only you can do that.

My blog is chock full of tips and useful articles… But if you’re ready to get serious and put in the time and energy needed to develop a good trading mindset, you should apply for my Trading Challenge! That’s where I teach the rules and patterns that have helped many of my students pave their way to financial freedom.

You won’t need to learn alone, either. You can make trading friends in my Challenge on the same path as you, so you can learn from multiple sources.

Apply for my Trading Challenge here if you’re ready to get serious about your trading!

The Bottom Line on How to Find Penny Stocks

Becoming a better trader involves lots of research and work, but it can also be fun.

If you learn how to find penny stocks accurately and consistently, you might do well in the market. Over time, if you see profits add up, you’ll find yourself even more motivated to do the research.

What’s your favorite way to find penny stocks to trade? Let me know in the comments … I love to hear from my readers!

FAQs

How do I find reliable content on penny stocks?

To find reliable content on penny stocks, look for well-researched articles and reports from reputable financial websites and trading platforms. Consider using ETFs that focus on small-cap or micro-cap stocks as they often highlight sectors where promising penny stocks may be found. Pay attention to factors such as the company’s financial health and market trends to ensure you are getting accurate and useful information.

What are the main risks associated with trading penny stocks?

Trading penny stocks carries significant risks, including high volatility and the potential for substantial losses. Factors such as low liquidity and susceptibility to price manipulation increase these risks. It’s essential to be cautious and perform thorough research, considering both the potential gains and the inherent risks of trading low-priced stocks.