1) You can make 20% in one day trading penny stocks—rather than making that in one year with a blue chip stock(In a very good bull market)
2) Finding a stock that can go from $10 to $100 is hard, but finding a penny stock that goes from .10 to $3 is easier.
3) You want to make money as fast as possible (trading safely of course).
4) You have a small account (Under $10,000)..penny stocks are best to trade with small accounts because of the percentages you can gain.
5) You trade with $1,000 dollars, at this point, it’s essential that you ONLY trade penny stocks as it is the only way you’re going to increase your capital in a fast, yet feasible manner.
6) You love trading volatile stocks and their price swings – penny stocks are for you!
7) No professionals trade penny stocks, so no one has the upper hand down here in penny stock land.
Penny stocks are easy to predict and pattern, partly because of #7.
9) You prefer stocks that don’t trade pre-market or after hours. Penny stocks don’t have after hours trading!
10) If you’re a speculative type of trader.
11) If you love excitement
12) If you like the idea of high risk/high reward.
13) All you need is a discount brokerage no big-time brokerage where you have to call in orders and where they charge you $30 commission every time you trade. I use and recommend SogoTrade
14) If you like the idea of buying a penny stock at .005 and selling it at .10
15) You like to short sell, cause there’s nothing like short selling a huge spike in a scam company (which is what most penny stocks are)
16) Yes! You can short sell penny stocks!
17) You like stocks that don’t exactly follow the trend of the whole market (economy, market conditions, etc. don’t have as much of effect on penny stocks).
18) If you’re risk tolerance is high. Yes, these penny stocks are risky but well worth it if you know what you’re doing.
19) If you’re unsatisfied with your current holdings in the market
20) If you like the idea of trading(holding 1 day – 8-10 months) rather than investing (hold a year or longer).
If you have other reasons that you’d like to share feel free to add them in a comment and I’ll post them.
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Hey Justin,
I recieved your comment at my website. Thank you for your comment and support! I’m impressed by what you have been able to accomplish in a short period of time (i.e. profiting by shorting penny stocks, creating an informational blog…all while going to school.). Your stragtegy and honesty is very similar to my philosophy (i.e. trade dont invest in penny stocks). Cheers!
I would caution anyone from short term trading penny stocks long – you might be able to outwit them a few times but eventually you will get trapped and suffer big losses. Shorting is probably viable IF you can get a borrow on them. Usually you have to be a market maker, but it is possible.
If someone wants to make some money quickly using investment, then he should buy penny stocks. This can be a great way to turn a profit extremely quickly.