Penny Stock Picks

Everybody and their grandmother always wants to know how to stay abreast of the latest penny stock picks. You look at the average website relating to penny stocks and it will be loaded with recommendations (containing the all-too-familiar “forward looking statements”) for this or that stock, with so many symbols flying at you that your head will start spinning. I hate to say this, because it may sound like I’m coming across as “high-minded”, but the truth of the matter is that people always want the easy way out, and investors or traders almost always choose the path of least resistance. What I’ve found over the years is that most traders desire the quick fix instead of being willing to actually sit down and understand how a thing works. They would rather just get a list of penny stocks from some so-called investment analysis firm and then just blindly throw their money at them, without too much thought as to why those stocks were picked in the first place. This, in my mind, is a major problem, and a major reason why most traders end up as roadkill in the markets. I’m a firm believer in the premise that nobody cares more about your money than you do. This is why you don’t see me recommending a bunch of stocks every single time I post. Whenever I do make a recommendation (which I hate calling it that, because I’m NOT an “investment advisor”), I actually am really only highlighting a stock that I’ve noticed to be a possible mover & shaker. Have I been wrong? Well, publicly on this blog, not a whole lot, and if you doubt this, take a look at some of my past posts and then check out the price charts for the stocks I mentioned within the time frames that I mentioned them. You’ll see that I’ve been able to be pretty doggone accurate with my stock picks so far. But what I’ve discovered is that you can have the perfect setup, and even if you were a freakin’ psychic of the stock market, if you still haven’t perfected your trading methodology, you will ultimately not make money, or barely break even, or even lose money. Some people believe that all you have to do to make money in penny stocks is to “pick a winner” (i.e., a stock with some serious potential), and then you’re home-free, but it just doesn’t work like that. You still have to know how to actually trade the stock successfully. I have been in some stocks that made the perfect up-moves I had envisioned, but yet due to lack of discipline, or emotional thinking (instead of rational thinking) on my part, I blew the trade, even though the stock’s price was doing everything I had predicted it would do.

What I’m really getting to is this: Traders who are always looking for the next big penny stock picks are mostly (and I can’t make a full generalization here, but for the most part it’s true) people that would rather you give them a fish instead of allowing you to teach them how to fish. I’m in the business of teaching people how to fish...I have no interest whatsoever in just spoon-feeding traders with the latest hot penny stocks every time I post on this blog. Again, don’t get me wrong—I have highlighted certain stocks over the past couple of years, and I’m doing it more for the sake of showing you what to look for when evaluating penny stocks rather than just spitting out a four-letter symbol for you to plunk you money down on. My thought is that if I can show a little bit of the “behind the scenes” insight as to what really drives penny stock prices, and if I can teach you how to read a price chart for yourself, so that you can begin to recognize these accumulation patterns for yourself, you will be able to find stocks without any help at all, and then you’ll truly make this penny stock trading thing your own instead of always getting “second-hand” advice. Just for an example, I found this CTIC (Cell Therapeutics) penny stock without the help of any advisor, newsletter, or “hot penny stock alert” website. Check out the most recent 6-month chart on CTIC:



Now don’t get me wrong, I’m not against those alert services or advisors, I’m just saying that what if the alert service went out of business? What if the advisor dies? I know it seems a little extreme, but my point is that if you’ve wrapped up your ability to pick penny stocks based on what other people are telling you, it may turn out bad for you if the source of your information suddenly ceases to exist. But if you know it for yourself, you’ll never have to worry about not having the insight to figure these things out on your own. Again, back to my example—in my mind, CTIC is making all the right moves right now. There’s a really tight accumulation pattern on the 6 month chart, especially within the past 30 days. This is a serious indication of a move up in the near future. Now when exactly this will happen, I don’t have one idea in the world, but I know that based on all the other times I’ve seen patterns like this, it may not be very long. My point is, if things continue as they have been with CTIC, you have a stock that’s basically waiting in the wings, and has a very high percentage chance of making a strong move up in the near future. In other words, it’s like you’re a sniper, and you’re sitting there with your gun loaded and the target smack dab in the middle of your crosshairs. Again I say, charts like CTIC show up all the time on my screener…there is no shortage of penny stocks to buy if you know how to spot what makes a penny stock an attractive prospect. Chart reading, chart reading, chart reading people. That’s the key to this thing. Study, study, study your charts. Internalize not only the present-day charts, but the stock charts that display strong moves of the past as well. If you don’t know where to start, just pick one from my post archives and follow the trail that I laid out. You’ll get the hang of it…it’s not all that difficult, to be honest with you. Once you have invested the time and effort into intense study of price charts (and in my mind you haven’t really done that until you have looked at upwards of at least 1,000 price charts), you can really learn how to find these winning penny stock picks on your own, and that will make it so much more rewarding for you. Trade on, my friends.