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Infographics-Good Penny Stocks To Buy

How Pros Trade Penny Stocks [Infographic]

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Written by Timothy Sykes
Updated 1/10/2023 4 min read

Trading penny stocks is an endeavor that can help you attain your financial goals. However, it’s much more than just a matter of setting up an account and trading whatever stocks capture your attention…you need to learn penny stock basics like these. Also, to help gain solid footing as a penny stock trader, try these tips to learn how pros trade penny stocks :


how pros trade penny stocks
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Learn how to make reliable profits. Take the time to find a strategy that can net you $700 to $1,200 per trade.** It adds up over time!

Find a great broker for short selling. It’s important that you seek out ways to profit even when a stock is going down in value! You need specific brokers to increase your chances of finding shares to short, so take the time to find a great broker.

Cut losses quickly. When things aren’t going your way, know when it’s time to throw in the towel. Don’t invest yourself too much in trying to turn around a bad trade, particularly when there are so many better trades that you could be pursuing.

Focus on one trade at a time. Don’t trade 10-20 stocks a day. Your attention will be too scattered. Focus on one trade at a time, and try to make between 10 and 30 percent profit each time.** Steady profits like this can add up faster than you’d think.

Avoid liquid penny stocks. Stocks with low trading volume are superior to ones with good stories. Focus on the volatile stocks, and trade long or short when appropriate, for the best results.

Make scams work for you. Go ahead: short sell, and profit when you see a stock that is going to collapse. It’s a real and lucrative strategy!

Don’t believe the hype. You can listen to what promoters say, but do your own research before investing your hard earned cash. Use technical and fundamental analysis on each and every trade.

Don’t force trades. Most stocks are in the “no go” zone if the odds aren’t good in either direction (long or short). Have the self-control to wait until a stock trend in one direction or the other before you pounce.

Don’t be a scalper. When a stock isn’t living up to your expectations, get out. It may wipe out at some point, and you don’t want your profits to wash away.

Have a strategy. Always have a trading plan so that you have a blueprint of when you might get out if things don’t go as planned. Having an exit strategy helps you stay level-headed and avoid making rash and potentially money-losing decisions.

Focusing on these important tips will help you refine your trading so that you can improve steadily. Following these methods and techniques can help you on your trading journey.

Leave a comment below and let me know if infographics like these help you? I want MANY MORE trading challenge students so I’ll try any kind of content to get you to study harder whether it’s a video, guide, DVD, webinar, podcast, interview, video lesson, watchlist, trade alert, commentary, blog post, software, website and yes, infographics too!

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Timothy Sykes

Tim Sykes is a penny stock trader and teacher who became a self-made millionaire by the age of 22 by trading $12,415 of bar mitzvah money. After becoming disenchanted with the hedge fund world, he established the Tim Sykes Trading Challenge to teach aspiring traders how to follow his trading strategies. He’s been featured in a variety of media outlets including CNN, Larry King, Steve Harvey, Forbes, Men’s Journal, and more. He’s also an active philanthropist and environmental activist, a co-founder of Karmagawa, and has donated millions of dollars to charity. Read More

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* Results are not typical and will 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

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”