Penny Stock Basics: Should I Buy or Sell?

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Companies that offer penny stocks are usually terrible … so why do some of these stocks spike? If you want to learn how to spot more opportunities, don’t miss this lesson.

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You see this a lot with low-priced stocks: the company is terrible … but its stock is spiking.

It can seem maddening, but there’s a rhyme and reason to how penny stock patterns play out. Once you understand these patterns, you can spot trading opportunities — both on the way up and on the way down.

In this video from the Trader & Investor Summit 2019, I’m presenting with Tim Bohen, the lead trainer at StocksToTrade.

We’re talking about an important topic: why penny stocks do what they do.

You gotta be careful with penny stocks … they come with risk. Remember that these companies could fail at any time.

If you hold one of these companies overnight and it doesn’t have a lot of money, so many bad things could happen. I’ve even seen FBI raids happen in the pre-market. It’s insane!

And that may lead you to question why anyone would even bother holding? If all these companies will fail, why not just short sell everything?

Not so fast. The problem is that not all of them will fail. And they won’t all fail in the same ways. Some penny stocks actually go on to be legit. Take, for example, True Religion Jeans. Believe it or not, this successful brand started as a penny stock, and it took off.

Stories like that are the exception, not the rule. But you have to know what’s possible in this niche.

Even companies that eventually fail can have massive spikes first. What can I say? The stock market can be irrational. And you don’t want to find yourself on the losing end of a short squeeze when these fundamentally flawed companies have huge spikes!

Today, we talk about how to assess a potential trade, and how to handle yourself once you’re in it –– including why my #1 rule is so important. You gotta cut those losses quickly.

In the stock market, anything can happen at any time. Bohen and I give you some essential survival tips to help you learn to adapt and deal with everything that comes your way.

How do you choose penny stocks to trade? Leave a comment and let me know what tips you like best!

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Hey, it’s Tim Sykes, millionaire mentor and trader. Thank you for watching my videos. I hope that they help you. I want to share everything that I’ve learned over the years. You can check out more videos right over there, and also click ‘subscribe’ so that you can watch all of these videos, get that knowledge and become my next millionaire student.*

* Results may not be typical and may 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:

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