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Penny Stock Basics

Where I Find Stocks To Trade

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Written by Timothy Sykes Reviewed by Tim Sykes Fact-checked by Tim-bot
Updated 9/5/2023 4 min read

In trading, correctly picking your entry and exit points is only half the battle. More importantly, you gotta be sure you’re playing the right stocks! To find the right stocks, I use just a few different websites.

Below is a list of websites I check every night to find what’s in play—and by in play I mean stocks that moving 30-300%/day and have plenty of trading volume so that I can get in and out easily. The time it takes to research varies (anywhere from 2 minutes to 2 hours) dependingon market conditions (during boring markets, there’s not much volatility, during bear markets, there aren’t many bullish plays, during bear market spikes (hopefully we get one in the next 2 weeks, there are tons of plays because I look to short into the brief spurts of strength, etc).

I’m sure there’s a way to model everything and/or use pure screening software, but that’s not my game—I just stick with what I know. Once you start practicing the PennyStocking process, you’ll see that anybody can do this—no assembly required.

Yahoo! Finance —this is the grand daddy of financial websites and you should plunder it for information. On the left hand side, I scroll down and click Price % Gainers and I look at each day’s biggest winners. I’m looking to see which big movers will continue to run and which ones will break down. This simple list is where I get 90% of the stocks I trade. Price % Losers doesn’t interest me because I’ve found that big losers are much more unpredictable.

StockCharts.com — I use all the various stock scans to see all the various chart patterns – 52-week highs, $ gainers, gap ups, whatever. 99% of these charts are too messy / unpredictable so I ignore them. I’m looking for very clean-looking charts. I’m working on a charts page for this site so you can see examples of what I’m talking about—it should be up within a few days.

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Clearstation —I use the tag and bag to see all the various charts—best trends this week, stocks in new uptrends, etc. Again, just looking for interesting charts with enough trading volume (at least 500,000 in daily trading volume).

And, even though the financial media doesn’t give them any respect—internet message boards are great places to do research. Particularly hype research. TheLion.com (more specifically one message board--Wall Street Pit) and InvestorsHub (more specifically one message board Zeev’s Turnip Patch) are the two best places—Yahoo has message boards, but they’re not great for finding stocks, they’re mostly just spam and amateurs looking to brag about their winners and comfort themselves over their losers.

After I find the stocks in play, I write down all the tickers that interest me and then do full investigations on them—fundamental, technical, and the message boards. Yes, the chart/price action is what interests me initially, but then I want a story to back it up and people who believe that story to back it up even more. In smallcaps and microcaps, it’s all one big self-fulfilling prophecy (many people can’t understand this) so as long as the hype is believable, the price action is predictable.

Certain types of news influence stocks in different ways (buyouts usually lead to little volatility aka I ignore them, FDA news leads to big gains, but I don’t understand the science nor can I predict how successful any drug will be (despite all the BSers out there, nobody does) so I usually leave those alone unless they’re big winners for several days in a row—then I might look to short, newsletter/analyst mentions lead to wild swings—the hype only lasts for so long—so those are my favorite kinds of plays to short, earnings can really power a stock—I hardly ever short these, instead I look to buy these plays if and when their trading volume proves to me that their outstanding earnings have forced people to view the company more positively, etc.

Everybody seems to like to play the same stocks, GOOG, CROX, BIDU (or maybe they just like to write about them), but if you’re willing to look beyond the most actively traded issues, you might be surprised as to how much easier it is to trade stocks that everyone and their mother aren’t playing.

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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”