Monday, April 4, 2011

The Right Way To Trade The Most Discussed Penny Stocks

By Ferdinand Lawrence

When trading penny stocks you start to dig for info right away you'll find penny share forums once in the forum you may notice heavily discussed penny stocks. Straight away this should set off caution signals and you need to become careful about the excitement.

This isn't to say the stock is no good but there are reasons its being debated and often these consultations are the results of folks who are the owners of shares of the company exaggerating it to raise the price per share so they can sell. Or, folks who've been paid to plug the stock doing a good job at promoting by keeping the symbol in the apex of the forums and conspicuous to each trader that visits the forum.

This is what us penny traders call "hype". On occasions "hype" can really get the price rising and everybody in low will profit. This is a great thing but does not always make the company a sound investment. There are better paths to research and find corporations to make an investment in.

Stock promoters live upon new and young traders. They're looking to take advantage of the get wealthy fast mind-set of the young stock market trading crowd. They can pump their stock up whatever what is going on telling everybody that is the following Microsoft and then when the stock does poorly they may blame the Naked shorters. Exposed shorters are traders who short penny stocks without owning any shares.

When they short one of those stocks, they are gambling the price will drop and with these unpredictable stocks they are customarily right. As the general population can't short these stocks they feel these exposed shorters are insiders manipulating their stock so they can buy at a less expensive cost. Its fault of these shorts that their great profit making stock isn't going up in cost. This is about as real as the boogeyman. Buy stocks for the right reasons, not because they're the most discussed penny stocks and have more folks excited on some random notice board than any other stock.

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