The NASDAQ acronym stands for National Association of Securities Dealers Automated Quotation System.
Wow!
No wonder they use the NASDAQ acronym instead. However, I like to think NASDAQ stands for opportunity. I don't mean to sound trite, but I have had much better luck trading the NASDAQ over the NYSE or AMEX.
During the past three years I have managed to turn a decent profit trading what I'll call the NASDAQ penny stocks. These are stocks priced under $5 per share.
I used to spend most of my time trading blue chip stocks, but it finally dawned on me that despite the risks associated with trading in the "pennies," the odds of making 100% plus gains was much higher at the bottom.
Think about it. SPY trades for about $130 per share. How likely is it that SPY will double in value over the next 30 days? Not very high. But a stock that trades at $1 per share could realistically double within a short time frame. Gains of 100% or more are not uncommon down here.
Of course, you could also argue that SPY is not likely to lose 50-100% of its value in the next 30 days either, and there's the rub. Low priced stocks carry higher levels of risk. I use a strategy of investing no more than 10% of my total portfolio value in any one stock, and when I'm in that trade, I watch it like a hawk.
You can't buy a penny stock and then take off on a cruise. Penny stocks are just too volatile for that. You need to pay attention.
During the past six months I have had good luck using an automated stock trading system. It doesn't make the trades for you, but it will alert you to hot trade opportunities.
I've always been a bit skeptical about "black box" systems, but after reading through the testimonials and trying the system for myself, my skepticism turned to conviction. I'm a believer.
Here are three trades from the Pinksheets I recently made:
HCPC purchased at .0001, sold at .0003 within three days.
RELM purchased at .0004, sold at .0010 within two hours.
GLCC purchased at .006, sold at .03 less than a week later.
Of course, no system is perfect. We're dealing with the stock market here. But overall, the system dramatically improved my success rate. In the interest of full disclosure, I also bought GCOG at .0039 around the same time period. So far it is still idling around .0040. Oh well.
Also, the stocks I just listed are for illustrative purposes only. They worked for me at the time, but may not represent good trade opportunities at the time you are reading this.
Research before you trade.
To summarize:
The NASDAQ acronym stands for opportunity
NASDAQ penny stocks offer the potential for huge gains
Penny stocks require research and careful consideration before you trade
Use a penny stock pick system to help you select your stocks
Visit Phillip Collinsworth's website http://www.penny-stock-advisor.com to read more about his favorite stock trading software.
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