Penny Stocks Made Simple

The biggest and most basic concept behind my teachings is how to buy penny stocks.


I believe that trading penny stocks is one of the most misunderstood styles of trading, and I want to set the record straight.

Plenty of people have an interest in profiting from trading penny stocks, but very few actually take the time to understand how to effectively trade them. Ironically, it’s this lack of preparation that prevents them from realizing their potential as penny stock traders.

I want to change this. I offer plenty of resources like this free penny stock trading guide and I focus on educating traders about penny stocks.

I want people to understand penny stocks so that they can benefit from trading and not be one of the many traders who are statistically bound to fail. In this post, I’ll start you out on the right foot by offering you a thorough overview of how to buy penny stocks.

What Are Penny Stocks?

Penny stocks might be a little bit of a misnomer, because these low-priced stocks don’t actually all trade for pennies. Typically, penny stocks are considered stocks that trade for under $5 per share.

Yeah, that’s a far cry from mega-cap companies like Amazon that trade for thousands of dollars per share.

Companies offering penny stocks are typically small. They might still be in developmental stages, or they might just offer one or two products.

Sometimes, the companies in question do turn into something substantial. True Religion Jeans, for instance, was first offered as a penny stock. However, that’s an anomaly. Most penny stock companies never turn into anything.

Interestingly, the fact that many of these companies will fail can help you profit as a penny stock trader, because it opens up opportunities for short selling for potential profits if/when the company’s stock loses value.

Learn the Basics of How Penny Stocks Work

I know that you probably want to just jump in and get trading, but if you want to become a penny stock trader, you need to take the time to learn the rules first.

Not only must you learn the basics of trading penny stocks, but you need to learn how the market works. You need to learn how to predict patterns, and how to create a trading plan and stick to it.

It’s been proven that the majority of new traders will fail. This isn’t because penny stocks are too hard to trade or because the system is too risky — it’s because new traders simply don’t take the time to learn the basics first! They don’t understand how or why they are trading certain stocks.

Without knowledge, trading penny stocks amounts to nothing more than random betting. It’s like playing a slot machine in a casino, and the odds aren’t in your favor.

By seeking out a group you can learn how to trade penny stocks in a helpful and targeted environment.

Pros and Cons

Listen, penny stock trading is not for everyone.

For me, trading penny stocks has proven profitable.

This is how I made my fortune, turning my $12,415 bar mitzvah money into nearly $5,000,000 over the years.

However, trading penny stocks isn’t without its share of difficulties.

For instance, penny stocks can be extremely volatile and fast-moving. For new traders, it can be easy to become very overwhelmed by the rapid pace of penny stocks.

Keeping up can prove so challenging that many decide to throw in the towel.

Also, while this volatility can mean that there’s potential to make money rapidly, it also means that it’s possible to lose money rapidly. For many traders, this risk is too frightening.

However, the same risk that scares off many traders can actually be a benefit to traders like you and me — because it leaves more room for us to potentially profit. 

Additionally, there are a variety of setups and techniques that you can use to trade penny stocks. Some of my students like short-selling penny stocks or many prefer dip-buying them like I do.

You can choose what works best for you!

I have some more tricks and tips to share with you before we’re done with my penny stock guide.

Stay tuned for the next issue on Monday, I’ll cover with you some of the basic things you should know to help you successfully get into the world of penny stocks.


— Tim Sykes
Editor, Penny Stock Millionaires

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