Paradigm Capital Management Comprehensive Lessons on Hot Penny Stocks Trading

What basically are hot penny stocks?

Well, its definition can vary depending on whom you ask. But in general, a hot penny stock is basically a stock that rapidly increases in price with numerous investors or buyers getting into to buy shares of it. However, it would be wise to do a bit of research before you consider a stock “hot”. This is because there are many factors that contribute to the popularity of a stock and it isn’t always because that particular stock is “hot”. Sometimes a professional promoter can make its stocks seem that way even when they are not.


What to be Wary of?

Often, hot penny stocks can have certain pitfalls and traps which can get a newbie investor into a whole lot of trouble. Therefore, one must know what to avoid in order eliminating the chances of accidentally purchasing undervalued stocks and subsequently selling them after a short period of time in order to receive a quick return on what you have invested. One of the best ways to avoid this is to acquaint yourself with the background of the stocks you intend to invest in. Make sure that you know the stock’s history, basically how it has performed in the past, and if you see anything that doesn’t feel right then you should think twice about going through with the investment.


You should also check the company’s current financial performance, their business plans, future investments as well as their top management. It might seem a little too much but doing this would help you protect your investment.


Hot Penny stocks can be a bit difficult to track because of the lack of information and because these stocks are often traded on pick sheets. However, you would be able to keep yourself up to date through newsletters that are provided by hot penny stock brokers. These newsletters would provide you with information and background material you would need in order to help you familiarize yourself with a particular hot stock.


How Much Should You Invest?

Now, this is a question that many beginners ask. Whilst there isn’t any standard amount or limit that you should impose upon yourself, there are certain things that you always have to keep in mind. Ask any experienced investor and they would inform you that the only way to make sure that you don’t lose too much money is through investing only what you can afford to lose. Point is, loses are inevitable in this kind of business and as such, you should be ready for it beforehand.


If you are serious about getting into trading hot stock then it would be good to do the necessary research and learn as much as you can before you make any move. It would be good to observe and learn from professionals like those at Paradigm Capital Management, as they could provide you with very useful information. Needless to say, gather all the knowledge that you can, filter and starting building a foundation for your own trading strategy. After all, in this business, tools are just there to assist you; knowledge would always be one of your greatest assets.


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Dysfunctions of Penny Stocks – Paradigm Capital Management

People lose a lot of money because of market crash. Although a lot is out of investors’ control, there are still lessons that can be learned when you are experience a market downturn. Our experts at Paradigm Capital Management discusses some of them below


Difficulty in obtaining Information on penny stocks


It is a true fact that it is not so easy to get proper information on existing stock market and corporation’s worth. Due to lack of knowledge about the company’s value people suffer many time. Price and volume data possibly will not be directly available to the public and may only be made available to you by the stock brokerage you’re dealing with. On average, pink sheets for penny stocks are only made accessible to brokerage firms.


Deception and uncertainty


This business is exposed to maltreatment, deception and uncertain sales practices as revealed in their history, and fraught with brokers who use high pressure sales techniques and cold calling.


Penny Stocks are those, which sell for under $5 per share on the exchange and are small company stocks. They are easy to purchase, but they can be hard to sell. They are easily manipulated because they are so thinly traded.


These stocks are hard to unload


Once you have bought the share, then your work is to sell it. For this you’ll need a broker, who may not agree with your decision regarding sell. Besides that brokers may be less than loyal of your wishes to sell your stock, and convince you to keep hanging on or trading these supposed “investments”.


Lack of History


Several companies measured as micro cap stocks are either newly formed or approaching bankruptcy. These companies will generally have poor track records or none at all. As a result, this lack of historical information makes it difficult to determine a stock’s potential. An oft-quoted statistic shows that at least 70 percent (!) of penny stock investors lose their lose money, not counting the risks of fraud or abuse.


A highly chancy trading


If you one way or other make money from penny stocks, you may analyze this stroke of fortune entirely to your skill or careful analysis or the due diligence you poured into making your investment decision. It may simply be due to pure luck. These stocks are extremely hit or miss, just like at the slot machines.


Brokers may want to push penny stocks upon customers because they can charge more for such a stock. Be watchful of the charges a brokerage can impose on you for trading such stocks.


No Minimum Standards


Stocks on the OTCBB and pink sheets do not have to realize minimum standard requirements to remain on the exchange. Sometimes, this is the reason that the stock is on one of these exchanges. Once a company can no longer maintain its position on one of the major exchanges, the company moves to one of these smaller exchanges. Whereas the OTCBB does require companies to file timely documents with the SEC, the pink sheets have no such requirement. Minimum standards act as a safety cushion for some investors and as a benchmark for some companies.


If you need any help then consult with the experts at Paradigm Capital Management – a trusted small cap investing company. We at Paradigm Capital are focused on a single minded purpose: To ensure that our clients have the best information on which to base intelligent financial decisions in pursuit of superior investment performance.


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Developing Your Own List of Penny Stocks to Watch

Looking for hot penny stocks to watch? Stop looking and start creating. Anytime you rely on someone else to provide that hot list of stocks, you’re making a big mistake. These particular stock trading waters are shark-infested and frothing to the brim with fraud. There are three basic steps to creating your own list of penny stocks to watch.

Broker Your Way to Penny Stocks to Watch

First you need a full service broker. Some people may sigh when they read this step. Stop playing games here. This is real money with real risk. If you’re serious about learning how to make money with stock trading, then the very first step you need to take on your way to creating your own list of stocks to watch is to find yourself an established and reputable full service broker. You can go with discount brokers and later when you’ve learned the trade and you’re ready to take care of business on your own.

Technical Analysis of Stock Picks

Next you need to learn the basics of technical analysis. In stock trading terms, technical analysis refers to viewing the chart data and identifying patterns known to be associated with specific future behavior of a stock. You’ll find terms like “head and shoulders” and “double tap” used to refer to specific patterns.

Even if you’re working with a broker who is helping you learn the ropes, you need to study these different patterns and learn to accurately identify and diagnose them with real stocks in the market. Quickly spotting common patterns and diagnosing them is vital in developing your own list of hot penny stocks to watch.

Develop Your Due Diligence

The last key to creating a successful list of hot stocks to watch is to understand and appreciate how to conduct your own due diligence with a stock company. This means you need to learn how to research the financial and legal background of obscure little companies. It isn’t as hard as it sounds; but you need to take the time to learn where to go and what to do to obtain and verify a company’s financial data. Because micro cap stocks often don’t need to file with SEC, this is doubly important for micro cap stock transactions.

If you need any help then consult with the experts at Paradigm Capital Management – a trusted small cap investing company. We at Paradigm Capital are focused on a single minded purpose: To ensure that our clients have the best information on which to base intelligent financial decisions in pursuit of superior investment performance.


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Identifying Hot Penny Stocks

When covering the stock market the financial news networks tend to focus on the stocks traded on the major stock exchanges, like the New York Stock Exchange, the NASDQ, The London Stock Exchange and the Japanese Nikkei. For many investors, these traditional stocks, and the heft brokerage fees and the long waiting time in order to see a profit are not appealing. These investors, the ones seeking bigger risks with the possibility of bigger, more immediate rewards are trading penny stocks. Since the mainstream financial media is not generally covering the hot penny stock market, investors often decide which hot stocks to pick on their own.


One way to identify which hot penny stocks you should pick is to follow the national stock trends. Instead of investing in traditional blue chip companies, look for second or third tier companies, startups, and companies that have some liquidity, equity, or debt challenges. These companies should feel the trickledown effect of a bull market in their particular industry. So, instead of investing in Starbucks, you may find a regional coffee shop that offer hot stocks and an opportunity to get in on the ground floor.


There are a number of websites dedicated to identifying hot penny stocks. These sites offer their daily, weekly, and monthly hot picks. These sites may also offer you an opportunity to talk to successful stock investors via instant chat, email, or discussion forum. Instead of turning to a traditional broker for advice and counsel, you can chat, in real time, with other investors about which hot stock to pick. You can chart their successes and progress to see if they are as successful as they claim to be.


These stocks are not subjected to the same rigorous filing, listing, and regulatory standards as traditional stocks, so finding unbiased research about a company’s assets, liability, profit, and debt, can be challenging. Most analysts recommend that you conduct some of your own research on your hot penny stock choices. At the very least, you will want to look at a company’s business models, and recent profit and loss statements to get a picture of the overall financial health of the company. Sites like Google Finance and Yahoo Finance are good places to start your search for unbiased research on your hot stock picks.


Deciding which hot penny stocks to pick is equal part research, intuition, and networking. By participating in the conversation with other penny stock investors, you have developed an important network of advisers and you can watch how successful their penny stocks picks are. These chat rooms, message boards, and discussion forums illustrate if these investors are putting their money where their mouth is. As with any stock portfolio, timing is key, so keep your eye on your stocks movement. Since penny stock investors tend to trade in higher volumes than traditional investors, even moderate gains and losses can add up quickly. Picking hot penny stocks is an option for an nontraditional investor who is looking for a quick, big risk, bigger rewards scenario.


If you are looking for the expert advice to proceed with your investment goals, consult with the experts at Paradigm Capital Management. The firm is a trusted leader in penny cap investing and employs a disciplined, bottom-up approach with an emphasis on fundamental analysis and extensive management contact.

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Trading with Good Penny Stock Listing Options

Stock trading can be easy if you equip yourself with the right information. If you’re a beginner in stock trading investment, you can begin by investing your money in online stocks, start by trading in small investments and good penny stock listing options. These are good ways to begin with, as well as gaining experience and creating your own workable trading strategy. For beginners like you, it’s best to rely on a good penny stock trading firm like Paradigm Capital Management to help you start up.


The two tools you will need in order to trade successfully is: a good and reliable online stock trading firm and several very reliable and fast stock trading information portals. Begin by surfing for an online brokerage firm that offers free start-up accounts.


If you go online, you can find several online brokerage sites offer courses on online stock trading. These sites also offer services like small stock options, penny stock listing information, as well as stock news and data reports. Sites like that one of Paradigm Capital Management, also offer advice and services on how to start buying and selling online, as well. Choose a site that you like and whose registration process and site navigation are easy to understand and maneuver through. Pick one that not only offers the courses on online stock trading, but also has great turnkey applications and solutions.


Getting the right stock information is vital to learning how to become a good online stock trader. The most common kinds of stock information you can get online (through your online stock trading firm) are updates on your stocks, updates on new shares and penny stock listing options, and other stock market information that you can use in your buying and selling.


Aside from relying solely on information given by these trading sites, you should also do your own research and browse through stock market news sites that cater specifically to the online stock trading community. Check for through online stock news portals, daily streaming stock quote and data and charts, and penny stock listing reports, and other stock updates.


Stock market reports, penny stock listing data, and specific stock options that you may be interested to invest in are just some of the information you can find in these stock market news sites. Be cautious, though: Don’t be taken in by sites that say you don’t need to learn about online stock trading. Online stock trading requires knowledge and experience, even for non-professionals who have been doing it for years. Start with small investments and penny stock listing options that are solid and reliable. Don’t go for the kind that is highly erratic and unreliable.


Starting your online stock trading education with small stock investments and penny stock listing options is a great way to learn how it’s done. These investments are the perfect training grounds for you to develop experience and your own working trading strategy. Eventually, when you move on to trading bigger stock investments, you’ll be able to apply what you’ve learned and find that online stock trading is a sound and reliable way to invest your money.


Remember that the keys to learning about stock trading is starting with small investments and good penny stock listing options, learning how the market works and gaining the tools and valuable experience to be able to buy and sell shares, and lastly (but not the least, by far), getting the vital information that you need to ensure that whatever trading movement that you do, it’s always the best move you can make.