Where To Find Pennystock Tips on the Internet

The Internet has opened up stock market investing to the average person in ways that were previously unimaginable.  Before online trading services, such as E-Trade and TDAmeritrade, started offering flat fee trades that included an unlimited number of shares for a modest fixed price of approximately $10 to $15 per trade, trading in pennystocks was an expensive proposition that mainly involved professionals who had the resources to pay the high commissions that were calculated based on the number of shares that were purchased or sold.  The Internet has also provided many avenues for the average person to obtain pennystock tips and information about pennystock companies.  The key to finding pennystocks that have the potential to make big gains is to understand where the pennystock traders are on the Internet and where they are sharing their stock tips and information. 

Before I provide the websites and forums where most pennystock traders share their stock tips and information, a word of warning about pennystock trading is necessary (if you are only interested in where to find pennystock tips, then skip to the next paragraph). Pennystocks are inherently risky, much riskier than the New York Stock Exchange (NYSE) and NASDAQ stocks that many people are familiar with. Pennystocks are much riskier because they often represent companies that are in the development stage and have no operating business, or companies that are operating but are very small and not well capitalized, or companies that are in financial difficulties. These precarious situations often lead pennystock companies to dilute the number of shares available to trade by authorizing additional shares and selling them into the open market, which is colloquially known as “printing shares”. Some traders characterize pennystocks as little more than share printing and selling operations, which is often but not always the case. Compounding this situation is the fact that information about the inner workings of pennystock companies is often difficult to come by since many of these companies are not under Security and Exchange Commission (SEC) requirements to disclose company information, due to their small size. The bottom line is to be very careful when trading pennystocks. Keep in mind that the owners of the companies that pennystocks represent hold all the cards in the pennystock trading game. Money that one cannot afford to lose should never be used to trade pennystocks. For every 1,000% pennystock gainer, there are tens of pennystocks that lose value, sometimes significantly and very quickly, as they are diluted into oblivion.

Now that I have gotten the important warning about trading pennystocks out of the way, I can move on to the reason why I wrote this article, which is to share sources for pennystock tips on the Internet. Although there are numerous websites and places on the Internet where pennystocks are discussed, it is well known amongst pennystock traders that there is one dominant website where pennystock traders discuss their pennystock tips, information, and strategies. That website is Investors Hub (http://investorshub.advfn.com/). Investors Hub offers general pennystock trading boards that are an excellent source for pennystock tips. These boards quickly allow one to determine which pennystocks are currently trading actively and are a source for tips on pennystocks that may have upcoming news or material developments that could cause increased interest in the stocks in the future (see my list of these general pennystock trading boards at the end of this section). Investors Hub also offers pennystock company specific boards for more focused discussions, tips, and information about pennystock companies. Company specific boards are helpful once you have committed money to a pennystock, so you can stay abreast of the latest company developments. To make it even easier to figure out which pennystocks are currently hot, Investors Hub provides a constantly updating list of the top fifteen most active discussion boards.

A decade ago, Silicon Investor (http://siliconinvestor.advfn.com/) was a popular pennystock tip forum, but many of the pennystock traders from Silicon Investor are now using Investors Hub. There is one Silicon Investor pennystock tip board that is worth checking out (see below) because it is still active with pennystock traders.

Both Investors Hub and Silicon Investor can be viewed without a membership. However, participation in these websites is limited without a membership. It can be helpful to have a membership, so you can ask questions about stock tips and about the stocks that you are holding.

These are the most active pennystock trading boards on the Internet. If there are pennystock tips to be found, they can be found on these boards.

Investors Hub Pennystock Tip Boards

• BB's Stock Haven
  (http://investorshub.advfn.com/boards/board.aspx?board_id=2199)

• MOMO'S BREAKOUT BOARD
  (http://investorshub.advfn.com/boards/board.aspx?board_id=4929)

• The Hunt for the Next 5-10 Bagger
  (http://investorshub.advfn.com/boards/board.aspx?board_id=4235)

• Momentum Players
  (http://investorshub.advfn.com/boards/board.aspx?board_id=3891)

• Lion's Den
  (http://investorshub.advfn.com/boards/board.aspx?board_id=9676)

• OTC Intraday Alerts
  (http://investorshub.advfn.com/boards/board.aspx?board_id=1505)

Silicon Investor Pennystock Tip Board

• The Microcap Kitchen: Stocks 5¢ to $5
  (http://siliconinvestor.advfn.com/subject.aspx?subjectid=50570)

It is usually a good idea to avoid pennystock tips that are received via e-mail.  This is due to the fact that e-mail pennystock tips are sent by pennystock promoters that have been paid by a pennystock company to promote their pennystock.  It is not that uncommon for pennystock companies to use the interest generated by e-mail promotions to sell additional stock, thus diluting the value of their stock.  By the time you receive the e-mailed pennystock tip, any increase in price due to the promotion is likely to have played out, and the stock may quickly reverse direction and fall. 

In the same vein, it is not a good idea to chase a hot pennystock that has already made a significant move to the upside.  Quick pennystock moves higher bring in great deal of pennystock momentum players, and although you might get lucky and catch some more of the upside momentum, you do not want to be holding the pennystock when the music stops and everyone is scrambling to sell.  The selloffs in pennystocks can be brutal.

Be careful not to be drawn in by the hype surrounding a particular pennystock.  Every pennystock has their advocates, long shareholders and sometimes paid promoters, that make wild claims about the potential upside of the pennystock that they are holding or promoting.  Due diligence is important when evaluating a pennystock.  Do your research and discount the hype.  If SEC filings are available for a pennystock you are considering, then take the time to read them.  Look for convertible debt deals in which money borrowed by the pennystock company can be converted into shares.  Those types of deals usually lead to dilution and a lower stock price. 

Keep in mind that the pennystocks that have failed miserably once had the same hype about their upside potential before they fell in value.  Just look at their boards on Investors Hub to see what kind of hype and claims were being made before the stock price collapsed.

The following websites are excellent sources of pennystock due diligence:

·         OTC Bulletin Board (http://www.otcbb.com/)

·         OTC Markets / Pink Sheets (http://www.otcmarkets.com/)

The biggest difference between trading pennystocks and trading NYSE and NASDAQ stocks is that pennystocks are much more volatile.  While NYSE and NASDAQ stocks sometimes make big moves on earnings or takeovers or mergers, pennystocks can gain or lose value much more quickly than NYSE and NASDAQ stocks because they move on momentum.  Because pennystocks are often thinly traded, only use limit orders to buy or sell pennystocks.  Otherwise, you may wind up buying or selling at prices that are far higher or lower than you are expecting. 

Set your limits.  Be prepared to sell quickly, if a pennystock trade is not working out.  You may not get a second chance to sell at a price you are comfortable selling at.  It is better to lose 10% and still be in the game looking for a winner, than to be holding a pennystock that continues to drop in value. The key to the pennystock trading game is to preserve your trading capital and wait for the big 1,000% gainer to fall into your lap.  Do not wait for these stocks to rebound, because it may be a long time, if ever, before they rebound.  Some pennystocks, even once high fliers, go to zero and lose all of their value.  Stay in the game by preserving your trading capital. 

Do your research, follow the pennystock tip boards, find posters who have good track records, and try to find a pennystock that is poised to move higher.  1,000% pennystock gainers are not common, but they do happen, which is why so many people take their chances trading pennystocks.  Sometimes these small pennystock companies actually do have big developments, such as significant contracts with big well known companies or large sales gains.  The risks in pennystocks are great, but the rewards can also be great. 

A good strategy for a newcomer to pennystock trading is to start following the pennystock trading boards and trade on paper, without using real money.  Just note when you would have brought the pennystock you are interested in and how much you would have brought, and then when you think it is time to sell, make a note of the price.  See how you do on paper, and when you are comfortable, start trading with real money, but never more than you can afford to lose.  Pennystocks are not for retirement investing or investing for long term financial needs.