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Penny Stock Basics
Strategy
Philosophy
Screening and Research
Wall Street can be a scary place for the individual investor.  Our goal is to help you
trade with absolutely zero emotion.  Greed, fear or overconfidence should have no
place on your trading desk.  The most important aspect of trading is the
preservation of capital.  Sadly, this is often the most difficult lesson to learn and
many finally comprehend the true meaning once their entire account balance has
been reduced to the sum of zero.  Holding onto your cash can be harder than it
looks and simply using stop loss orders won't cut it. Trading penny stocks puts you
in a whole new world of investing.
  Together, penny stock day traders and investors provide enormous amounts of
capital to small, emerging and development stage companies. Without us, there
would be a lot less progress in the world of Technology, Science, Exploration and
Innovation, as well as Entertainment and Service.  These tiny companies often play
essential roles in the evolution and direction of our world.  Breakthroughs such as
Nano-Technology, potential cures and treatments for Cancer and AIDS, alternative
energy, Global E-Commerce and even fresh ideas in sports and gaming are all the
types of issues one can look forward to learning the in’s and out’s of as a Micro
Cap investor.  Despite their humble tile, trading Penny Stocks can be quite illustrious.
  Goal number one for the average day trader and retail investor is to gain a distinct
advantage, a view that they don't have be Wall Street insiders to profit from Micro
Cap stocks.  Wall Street has their own agenda, and as you may have guessed, it
doesn’t involve lining your pockets.  Laying the groundwork to become a
successful trader is not easy, and will require a good deal of effort.  It is not,
however, rocket science, provided you can separate facts and logic from emotion
and feelings.  Passion and sensibility can and will play a role in your endeavor, just
do not let gut reactions play themselves out exclusively.  If possible, compare two
charts of the exact same stock, in the exact same time frame, only make one of
them red, and one of them green.  Show each chart to someone unfamiliar with
investing, ask them to label each chart with a buy or a sell, and you can probably
guess what their answers will be.  Now make the exact same chart black and
white, and you will likely begin to see all kinds of patterns and ideas that you had
previously missed.  Another, perhaps more useful exercise, is to look at the peaks
and valleys of a stock over a considerable time period, and realize that history
often repeats itself.  It is very easy to see the logic in buying low and selling high,
as well as the emotion in buying high and selling low, all in hindsight.  Perhaps the
best way to translate this to your trading desk is to simply say, never make a
“momentum play” again.
Our strategy is unique but sound.  Flexibility, fundamentals, technical analysis,
diversity, attention to detail and the willingness to stick with a plan are all steadfast
cornerstones in the architecture of our success.  As we alluded to earlier, Penny
Stock trading is completely different than trading the NASDAQ 100 or the Dow
Jones Industrial Average.  Trading huge companies requires huge capital, and
although tiny 2-5 percent profits can add up over time, margin calls and tight stop
losses can begin to take their toll.  When trading Micro Caps, we seriously look for
profits in the 50-1000 percent range, and tend to keep our stop losses very loose.  
Although day trading penny stocks can be a viable option, we tend to have more of
a swing trading bias.  Diversity comes not only from being in many different
positions at the same time with unique business models and activity levels, but from
having many different time frames as well.  Averaging down, a practice that Wall
Street has dubbed dangerous, is defined as buying more shares of a stock you
already own at a lower price than originally paid, thereby giving you more shares
for the same cost basis, and ultimately, a lower average price per share.  When
we buy a penny stock, we always start slowly, with a small chunk of the portfolio.  
This gives us several opportunities (no more than two or three) to buy as close to
the bottom as possible.  Knowing the difference between reckless exponentially
regimented buying and prudent value investing will lead to ones success in these
explosive stocks.
Stock Research
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