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Pennystocks

Penny Stocks and Forex: Similarities and DifferencesBringing together the two distinct worlds of penny stocks and forex trading requires a comprehensive understanding of the unique characteristics of each of these investment opportunities. The article discusses how the speculative nature of penny stocks compares to foreign exchange trading, helping traders gain a better understanding of the opportunities and challenges of the two markets. Understanding Penny Stocks While looking for the best penny stocks to purchase, traders approach this segment with a balanced perspective and conduct thorough research. What Are Penny Stocks? Penny stocks are shares of small-cap companies trading at a low price, typically below $5 per share. They distinguish themselves from larger stocks by their market capitalisation, which is usually below $250 or $300 million. The top gaining penny stocks today are typically found in industries characterised by small, emerging enterprises, such as technology, biotechnology, renewable energy, mining, and pharmaceuticals, where companies seek capital investment to fund early-stage development and growth initiatives. Penny stocks are often associated with the term "Pink Sheets'', which originated from the practice of displaying price quotes for stocks traded over-the-counter on pink-coloured sheets of paper. Where Are Penny Stocks Traded? The top trading penny stocks can be found in the over-the-counter (OTC) market, which serves as a decentralised space where securities are traded directly by a network of dealers. It’s unlikely you will find them on large stock exchanges; however, there are exceptions. As companies traded in the OTC market are subject to less strict reporting requirements, it’s vital to be careful when choosing a platform for penny stock trading and investing. The requirements for filing financial information to regulatory authorities play a crucial role in choosing a trading platform. Marketplaces such as OTCQX, within the OTC Market Group, attract companies committed to transparency and stringent disclosure standards. In contrast, the Pink market attracts some of the best penny stocks for day trading, being a more speculative and loosely regulated tier and allowing securities to trade while complying with few financial standards. Major Driving Factors and Risks Penny stocks are notably influenced by speculation, with their prices being highly sensitive to perceived opportunities for quick and substantial returns. Associated with small, less-established companies, for which financial data is often scarce, penny stock prices may surge unexpectedly on news about the company's progress, such as product launches, partnerships, and financial results. However, this news is frequently manipulative and part of so-called 'pump and dump' schemes, where prices are artificially inflated and shares experience enormous price fluctuations. Another significant consideration in penny stock trading is dilution. The number of outstanding shares may escalate due to mechanisms like employee stock options, share issuance for capital raising, and stock splits. When a company issues shares to secure capital, a common necessity for small enterprises, it often leads to a dilution of ownership percentages held by existing investors, which exerts downward pressure on the share price. How Do Penny Stocks Compare to Forex? Below, we discuss various aspects in which penny stocks and forex trading can be compared to each other, helping traders find out whether penny stocks may be recommended for their trading profile. Risk Level Penny stocks present unique risk factors. These include high volatility, limited liquidity, the potential for fraudulent activities, and a lack of comprehensive information. A thorough examination of these risks is essential for investors trying to capitalise on price fluctuations of some of the most volatile penny stocks. Forex trading, on the other hand, comes with its own set of risks, including currency fluctuations, geopolitical events, and the leverage-induced amplification of losses. Potential Returns Penny stocks may have huge potential and deliver potential returns due to their low share price if the market moves favourably. However, this is not always the case; a low price doesn’t guarantee a future surge. The higher potential returns come with increased risk, and investors must carefully analyse each individual asset, especially in regard to the lack of historical performance data for some emerging stocks. Forex trading also offers the potential for benefiting through currency value fluctuations. Leverage in forex can amplify returns, but it also magnifies losses. Liquidity Penny stocks often face challenges related to liquidity, as their lower market capitalisation can result in fewer buyers and sellers. Forex markets, on the other hand, are known for their high liquidity, given the vast number of participants involved, including major financial institutions and central banks. Contrasting liquidity in penny stocks with forex emphasises the different trading environments and potential impact on trade execution when defining the best way to trade penny stocks. Accessibility and Learning Curve Penny stocks are considered accessible for traders and investors with any level of experience due to their low share prices and the lower level of initial investment that their trading requires. However, investors need to get familiar with the challenges associated with investing in smaller, potentially volatile companies. Forex trading, with its complex currency pairs and market intricacies, has a steeper learning curve. Novice traders entering the forex market need to invest more time in understanding the currency movements, economic indicators, and geopolitical factors influencing exchange rates. If you want to compare penny stocks and currency pairs, you can visit FXOpen’s free trading platform, TickTrader. Are Penny Stocks a Good Option? While the desire to find the best penny stocks to buy today may be the driving force behind many one-time trading decisions, trading penny stock CFDs may offer better opportunities. CFD trading allows you to take advantage of the rise and fall of a stock price and use effective risk management tools, including stop-loss orders. Diversifying a Portfolio: Diversification helps spread risk and can contribute to a more resilient strategy, especially when different markets may respond differently to economic events. Capitalising on Stock-Specific Events: Forex traders can leverage their existing skills in analysing global events and apply them to individual stocks, taking advantage of price movements triggered by earnings reports, product launches, or other company-specific developments. Exploiting Correlations: Identifying positive correlations between certain currencies and penny stocks from specific sectors or industries can potentially amplify returns during favourable market conditions. Negative correlations can help hedge risks. Conclusion While forex and penny stock markets share commonalities in terms of the potential for high returns and the necessity for risk management, they diverge significantly in their market structures, liquidity, and regulation. Traders must weigh all the relevant factors to navigate these distinct markets effectively. Looking for trading opportunities? You can open an FXOpen account and apply your trading strategies to over 600 markets. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
NASDAQ:DTILEducation
by FXOpen
3
NECCLTD LOOKS GOOD ON MONTHLY BASICS Disclaimer : This is strictly for educational purposes only. Please don't take it as investment advice. Stock Market Investment are very risky & subject to Market Risks. Use your discretion & consult your financial Advisor before investing. NECCLTD MARKET CAP ONLY 154 CR SO PLS DON'T AGGRESIVE ON THIS STOCK . PROMTER HOLDING INCREASE ON EVERY YEAR NSE: NECCLTD is closing last month with a bullish breakout candle supported with volumes also show higher high , higher low formation on monthly chart . This volumes and candlestick formation indicates strong demand and stock should move to previous swing highs in the coming days or Month . #stockmarket #stocks #investing #trading #investment #money #finance #stock #invest #nifty #investor #business #sharemarket #financialfreedom #bitcoin #trader #cryptocurrency #entrepreneur #sensex #daytrader #stock #wallstreet #wealth #nse #forextrader #bse #stockmarketindia #daytrading
NSE:NECCLTD
by jps_buttar5353
IMPP a volatile penny oil/energy LONG pre-earningsIMPP is rising from its lows of July after falling from a triple top in June at 3.8 which is the target for a long trade. Price is now above the POC line of an intermediate term volume profile having crossed the mean VWAP line anchored at the share split (purple and thick black lines respectively). Price bounced off the first negative standard deviation line making this a VWAP band bounce. The MACD lines are upgoing and so diverging. I see a stop loss of 0.2 as compared with a profit target of 0.6 making this setup a r:R ratio of 1:3. I will go long here also knowing of the rising energy sector supporting this ticker. This stock is a retail trader favorite when energy is" hot". With earnings in the morning, for me this is a no brainer to buy in the premarket and if rising complement with a call option. If you want my idea of a good call option, please ask in a comment.
NASDAQ:IMPPLong
by AwesomeAvani
GOEV a niche EV manufacturer LONGGOEV does not compete with TSLA. It makes special use electric vehicles including a NASA contract apparently for vehicles to be used upon the return to moon exploration. As a penny stock, GEOV has weak fundamentals coupled with high trader and investor interest. Large capital institutions have a predominant portion of the shares. On the 15 minute chart. GOEV trended up from July 14th to Ju;y 19th and then down to about the same price as before then trend. This was a range of 50% demonstrating the typical high volatility of penny stocks. Based on a set of anchored VWAP bands originating in mid- April, GOEV is currently near the mean long multi-session VWAP. Since many shares are held by institutions this is a price level where trading volume and volatility are expected. I will take a long trade here. The stop loss is the recent swing low at $0.59 with a target at $0.737 just below the POC line of the related volume profile from an entry-by-limit order at $0.613 making for a projected profit of 20% with a much lower risk. For chartists who follow chart patterns, in the interval under analysis, GOEV fell from a head and shoulders pattern. My target is the neckline of that pattern. GOEV benefits from the general interest and trading volumes in the EV sector at large as well as its niche with little competition.
GLong
by AwesomeAvani
2
VPLM - Powerful Descending TriangleEvery time we have a consolidation this last year we end up breaking out on rumors, running up higher than necessary, then crashing back down on GOOD NEWS. Last time it was a settlement issuance but things are in a NDA. There is an insider selling on this one but its very low of % compared to what the individuals own. We have a great descending triangle with lawsuits coming up in Oct. Dare I predict that we will soon again have rumors of something? This would match well with the descending triangle and the volume that is coming in as of late. Did I mention we also have a nice hammer candle on daily and 3 day? Regarding recent news (via yahoo): The cases vs Verizon and T-Mobile continue to move forward with trials scheduled in October. “This is all very good news!” said Emil Malak, CEO of VoIP-Pal. “Our team is very pleased with our progress to this point. As a result of the termination of the section 101 motions in NDCAL and 8 IPR’s, we have managed to consolidate our many legal battles and can focus our resources and efforts towards getting to the finish line. We can now see a clear path to what we hope will be a fair resolution for all our shareholders. Patience is a virtue.” Not financial advice, DYOR
OTC:VPLMLong
by ChartProphet
Why Penny Stocks is a Trader's NightmareLet me start off and say. Penny Stocks have a lucrative and solid place for investors who buy and sell shares. But not just any investors. Well informed, researched, savvy and highly understand fundamentals. Penny stocks for a trader though – Ah no! Those shiny little nuggets of the stock market that promise vast riches for a small investment, can often turn into a trader’s worst nightmare. Here’s why… Reason #1: The Roller Coaster Ride: High Volatility Penny stocks are notorious for their high volatility. One day they can skyrocket and plummet the next. These stocks are like riding a financial roller coaster without a safety harness. No matter where you put your stop loss, it can trigger within a second. And this extreme price fluctuation, can be dangerous for traders. The unpredictable nature, can lead to rapid and substantial losses. Reason #2: Stuck in Quicksand: Low Liquidity Volume is another caveat. Liquidity refers to the ability to quickly buy or sell (flow in and out) of a stock without significantly impacting its price. Penny stocks often lack this characteristic. Some penny stocks volume is SO low, that it can take months or even years to move in price. This means, once you’re in, you might find yourself unable to exit your position. Instead of flowing in and out of a trade (like a blue chip), you’re stuck in quicksand. Quite the oxymoron! Without a healthy volume of trades, penny stocks can become a trap, a nightmare for any trader. Reason #3: Walking a Tightrope: High Chance of Bankruptcy and Liquidations Investing in penny stocks is akin to walking a financial tightrope. These companies are often at a higher risk of bankruptcy and liquidation. This is because of their lower levels of regulation, credibility and inherent instability. And the issue with a less regulated penny stock company, is that it allows for less transparency. This makes it difficult for investors to drill into the true company’s health. The high risk of bankruptcy further amplifies the nightmare. Reason #4: Battling with Giants: Lacking the Strength of Blue-Chip Companies Penny stock companies are typically not well-established businesses. They lack the strength, stability, and track record of blue-chip companies. And without you doing the right research, it can leave them susceptible to market fluctuations and economic downturns. Investing in these companies can feel like bringing a pebble to a boulder fight. You’ll struggle to hold your ground amidst giants. Reason #5: The Race to Zero: The High Failure Rate of Penny Stocks It’s an unfortunate reality. Most penny stocks are more likely to crash and burn than to soar. Because of their weaker fundamentals and instability, they are more likely to head to zero – than a blue-chip company. So let’s sum up the reasons why penny stocks is a traders nightmare: Reason #1: The Roller Coaster Ride: High Volatility Reason #2: Stuck in Quicksand: Low Liquidity Reason #3: Walking a Tightrope: High Chance of Bankruptcy and Liquidations Reason #4: Battling with Giants: Lacking the Strength of Blue Chip Companies Reason #5: The Race to Zero: The High Failure Rate of Penny Stocks If you’re a savvy investor or you have someone great to follow, go for it. But I’ve warned you about the dangers for a trader.
TVC:RUTEducation
by Timonrosso
5 DANGERS of Trading Penny StocksJust so you know. I believe if you’re following a world renown and successful Penny Share expert, you’re in good hands. They are able to spot low risk investments and guide you through the process of owning great Penny Stocks. But as a trader , who only looks at charts – THIS IS DANGEROUS TERRITORY. Remember, Penny Shares are high risk, high volatile, low credible companies that are LOW prices i.e. Under $1.00. And so, I just want to write as a trader point of view five key reasons why penny stocks can be dangerous to traders. DANGER #1: High Volatility (Jumpiness) Penny stocks are notorious for their high volatility. These stocks tend to experience rapid and drastic price fluctuations, often without apparent reasons. I’m talking about companies that can jump 10%, 30% and even 70% in a day. The lack of stability and price predictability can make it very difficult for traders to make informed decisions. Sudden price jumps or drops can result in significant gains or losses within a short period, amplifying the risk factor. And if you place your stop loss within a tight range, there’s a bigger chance you’ll get stopped out. DANGER #2: Low Liquidity (Less Volume) Think of Liquidity like the flow of water. It tells you the ease of being able to BUY or SELL a market, without impacting too much of the price. Once again, we look for low to medium volatility. Penny stocks typically have low liquidity due to limited trading volume. With fewer buyers and sellers in the market, it can be difficult to execute trades at the prices you want. And this leads to slippage and even higher transaction costs. Also, low liquidity may also prevent you from even entering or exiting your positions quickly. And this can even TRAP you in an unfavourable market environment for an extended period of time. DANGER #3: Not Established Businesses Penny stocks are often associated with small, early-stage companies that are not yet established in their respective industries. These companies may lack a proven track record, have limited financial history, and face various operational and market risks. So if you want to invest in these type of companies as a trader, it’s better you do it with fundamentals, research, business models and future prospects. If you do it purely on speculative purposes, this could be very risky for your portfolio. DANGER #4: More Likely to Head to Zero Yes all trading requires levels and degrees of risk and rewards. But it is not worth it, if some petty company is doing really badly and is showing signs of going to 0.00. Penny stocks are more susceptible to declining in value and potentially heading towards zero. I mean, South Africa has witnessed instances where penny stocks have experienced substantial losses, which took out a ton of investors. For example, companies like African Bank Investments Ltd (ABIL) and Oakbay Resources and Energy Limited serve as cautionary tales, where investors lost huge amounts as these companies approached or reached bankruptcy. Talking about bankruptcy. DANGER #5: High Chance of Bankruptcy and Liquidations Penny stocks are also more likely to go bankrupt or get liquidated compared to a Blue-chip stock. This is because of the nature of the companies, the inexperience, the lack of funds and structure, as well as its credibility. Financial instability, mismanagement, or unfavourable market conditions can lead to the collapse of these businesses. We saw this also in South Africa with the liquidation of Sharemax Investments and the bankruptcy of Pamodzi Gold Limited. This lead investors with little to no value for their investments. So remember this as a traders We want low volatility, high liquidity (volume), credible companies with great reputations, track record and credibility. And we want attractive charts that work with our trading strategies. If you want to be a savvy Penny Share investor that's fine. But as a trader, I have given my precautions.
TVC:SA40Education
by Timonrosso