# Trading penny stocks: Where to start?



## Channy17 (10 August 2012)

Hey, after searching the Internet for answers and not really finding what I was looking for, I have decided to ask people who actually have experience in this field, you guys.

So obviously I am a complete beginner and had a go at using CMC demo, which I actually found frustrating as it couldnt find any companies I was searching for and it just seemed delayed.
Basically I just want to put down an amount of money I have no problem in losing and get used to the whole process of buying and selling. I am not interested in long term as I find it exciting doing it on a daily basis.
i know to people with more experience this may sound irresponsible, but I am only a 24 year old student who has a few grand to utilize to get used to the whole process.
I am interested in penny stocks due to its extreme risk, but find that the companies I have been looking at are either in Amsterdam or in the US. So I was wondering if there was a online broker which would suit my needs in terms of only trading probably 5 times a month and that I would be able to do this internationally. 
Also in regards to penny stocks, I found using stock market simulator games to have some fun, they couldn't find any of the companies I searched for even though for eg they were based in that country etc. 
Any advice would be appreciated, and please remember, I am aware I am being naive and will probably lose the amount I start with, but this will not cause me any financial hardship whatsoever and I will learn from my mistakes.
Thanks in advance!


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## Trembling Hand (10 August 2012)

*Re: Where to start?*



Channy17 said:


> Any advice would be appreciated, and please remember, I am aware I am being naive and will probably lose the amount I start with, but this will not cause me any financial hardship whatsoever and I will learn from my mistakes.




Actually you will probably learn *nothing *more than the rest of the 90% that always lose. Therefore you are simply wasting money for some excitement. Go buy a ticket to Asia and learn something AND have fun. IMO.

You are simply planning to fail - not planing to win.


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## Julia (10 August 2012)

*Re: Where to start?*

There are dozens of posts just like yours across the forum.
Go to the Beginners' Lounge and start reading.


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## Channy17 (11 August 2012)

*Re: Where to start?*

Nope, not going to hop around Asia. Uni student so no time.
If I am planning to fail, it's a good thing it only affects me which I am fine with.
So is IB the cheapest online broker to use when wanting to trade in the US and Europe from Aus? I installed the demo, and it's a bit fiddley compared to cmc but at least finds the stock I am interested in.


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## wombat40 (11 August 2012)

*Re: Where to start?*



Channy17 said:


> Nope, not going to hop around Asia. Uni student so no time.
> If I am planning to fail, it's a good thing it only affects me which I am fine with.
> So is IB the cheapest online broker to use when wanting to trade in the US and Europe from Aus? I installed the demo, and it's a bit fiddley compared to cmc but at least finds the stock I am interested in.




Yes IB is good, I would say not many are cheaper in comm..  i use them for trading US stocks. You say its a bit fiddly, its actually quite brilliant. Takes a few hours to get use to , but is worth it. Even working out there statements takes a while but there quite detailed.

You have to realize though they are not CHESS affiliated as are aussie brokers.  your a uni student so u should be able to work it out..I didnt past year 10 so its taken me longer to use it. 

So if u do blow ur dough at least u will have it a bit longer (jokin)


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## Trembling Hand (11 August 2012)

*Re: Where to start?*



Channy17 said:


> If I am planning to fail, it's a good thing it only affects me which I am fine with.




Would you enrol in a uni course that left you worse off than when you started?



Good luck,


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## tech/a (11 August 2012)

*Re: Where to start?*

Need $15k min to open an IB account.

With such a cavalier methodology I doubt you'll see an IB account for quite sometime.
So sim it is.


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## tech/a (11 August 2012)

*Re: Where to start?*



Trembling Hand said:


> Would you enrol in a uni course that left you worse off than when you started?
> 
> 
> 
> Good luck,




Many do!


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## joea (11 August 2012)

*Re: Where to start?*



Channy17 said:


> Nope, not going to hop around Asia. Uni student so no time.
> If I am planning to fail, it's a good thing it only affects me which I am fine with.




Do not trade. silly silly.
The above two lines displays your mentality.
You plan to fail.
In your mind, you fail first then learn to trade.
That's c**p.

Start to trade when you plan to win. 

Go to Sally Pearson's blog and learn to win.

joea


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## burglar (11 August 2012)

*Re: Where to start?*

Cavalier is a word often used to describe my chess.
I would throw away pieces in an attempt to beat respected higher-rated players.
I seemed not to gain any compensation for those pieces.

I always said if I learnt a better way, I would hold those pieces more tightly.

Good luck!


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## Channy17 (12 August 2012)

*Re: Where to start?*

I checked IB, as far as I can see, being 26 years and under only requires $3000 to open an account? From others comments, I thought it was about $10,000 which I am able to put up, however due to my age I don't think I need to.
In regards to trading, since I will only be starting with a small amount of eg $2000 - $3000, are there any restrictions with IB that prevent you from buying and selling multiple times in a week with a small amount in my account? Basically at first, any profits I make after fees, I will not be reusing to trade. I will only use a set amount to trade to get comfortable with. 
I know the amounts I am starting with are like pocket change to a majority of you, but I am starting with what I am comfortable with. I think it would be more irresponsible of me to start with more. after doing stock market simulators even stocks that are like eg 0.01 being sold at 0.02 which just go up and down every few days, still result in doubling my cash just by checking everyday, buying at 0.01 and selling at 0.02 and then repeat. I mean even if that meant I was making a profit of a grand a week on average, that's still a grand more than I would have if I hadn't been doing this.
Just in regards to whether I would enrol in a uni course if it meant I was worse off, uni degrees don't cost 2k so it's it's not really comparable. 
Also no one plans to fail. Being realistic is not planning to fail.


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## tech/a (12 August 2012)

*Re: Where to start?*



Channy17 said:


> I mean even if that meant I was making a profit of a grand a week on average, that's still a grand more than I would have if I hadn't been doing this.
> Just in regards to whether I would enrol in a uni course if it meant I was worse off, uni degrees don't cost 2k so it's it's not really comparable.
> Also no one plans to fail. Being realistic is not planning to fail.




Hell if you have $10k and you've just found "The Holy Grail"
Just make $ 10 k a week.
Same thing just bigger stake!

Oh and could you just point me to the " Realistic " part?


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## Channy17 (12 August 2012)

*Re: Where to start?*

Realistic part - I am a beginner so only trading with what I am comfortable in losing.


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## tech/a (12 August 2012)

*Re: Where to start?*



Channy17 said:


> Realistic part - I am a beginner so only trading with what I am comfortable in losing.




Ok enjoy losing it.


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## Channy17 (12 August 2012)

*Re: Where to start?*

Wow, aren't you a bundle of joy to be around...
Someone's panties are riding a bit high today.


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## tech/a (12 August 2012)

*Re: Where to start?*



Channy17 said:


> Wow, aren't you a bundle of joy to be around...
> Someone's panties are riding a bit high today.




Like you a realist.


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## boofis (12 August 2012)

*Re: Where to start?*

Channy, I'm around the same age as you from what you've been saying, and I was in a similar situation to you but that was a few years ago. 
Stop typing and start reading what the older members are saying, you will lose it if you put it in the market, so why not keep it and invest in software, of which I assume you have none, and a few good books.
If you want some good books then click on the profiles of each individual who has posted in this thread and read some of their posts and you will quickly find some good titles and along the way you may even discover a thing or two in their posts aswell. 
If you want to just lose your money and learn nothing, then carry on, if you are actually serious about your endeavour start making time your friend by learning sooner rather than later. 
My 2c.


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## Channy17 (12 August 2012)

*Re: Where to start?*

I have books and been reading this forum like crazy. But what I was asking was about a broker site and people's opinions on it. I don't have any problems with getting advice but why on earth is tech/a so concerned about what I am doing... Its slightly strange.


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## prawn_86 (12 August 2012)

*Re: Where to start?*



tech/a said:


> Many do!




True, but the satisfaction of having a degree is something intangible and of different value to each person. But purely financially many degrees are probably not worth their while


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## CanOz (12 August 2012)

*Re: Where to start?*



Channy17 said:


> I have books and been reading this forum like crazy. But what I was asking was about a broker site and people's opinions on it.* I don't have any problems with getting advice but why on earth is tech/a so concerned about what I am doing*... Its slightly strange.




He is trying to convince you that what you are doing will result in failure. Same as TH. These two guys have published records of success, worth listening too IMO.

CanOz


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## So_Cynical (12 August 2012)

*Re: Where to start?*



Channy17 said:


> So obviously I am a complete beginner and had a go at using CMC demo, which I actually found frustrating as it *couldnt find any companies I was searching for* and it just seemed delayed.




You want to trade US stocks with an Aussie broker but you don't have much money and don't want to pay big brokerage.

So save up and open a IB account or go ahead and try with 3K and see what happens...good luck buying XYZ for 0.01 and selling XYZ for 0.02.


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## tech/a (12 August 2012)

*Re: Where to start?*



Channy17 said:


> I have books and been reading this forum like crazy. But what I was asking was about a broker site and people's opinions on it. I don't have any problems with getting advice but why on earth is tech/a so concerned about what I am doing... Its slightly strange.




You already have a poor mind set.
It's not conducive to sound trading

If you go forward with the view of preservation
Rather than cavalier indifference to loss---your
More likely to set yourself up for a financially 
Stable future.

It's easy to be average----pretty well everyone is.


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## skc (12 August 2012)

*Re: Where to start?*



Channy17 said:


> I know the amounts I am starting with are like pocket change to a majority of you, but I am starting with what I am comfortable with. I think it would be more irresponsible of me to start with more. after doing stock market simulators even stocks that are like eg 0.01 being sold at 0.02 which just go up and down every few days, still result in doubling my cash just by checking everyday, buying at 0.01 and selling at 0.02 and then repeat. I mean even if that meant I was making a profit of a grand a week on average, that's still a grand more than I would have if I hadn't been doing this.




someone should give you a straight answer why this approach doesn't work. 

Scratch below the surface just a little bit more, and find out about what daily volume is being traded at 0.1c vs 0.2c, then find out how much volume is placed on the sell queue at 0.02, then work out roughly how many days it would take for your sell order at 0.2c to get filled. 

Then look at the company's financial statement, and see whether the company has enough money to last that number of days you workout above. You might be slightly disappointed at your approach. 

Then read a thread here on the stock BCS and see how market noobs thought they bought shares for 0.1c, but ended up with a legally enforcible liability of 1000x their initial outlay.


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## Trembling Hand (13 August 2012)

*Re: Where to start?*

You cannot trade US stock with less than 25K if you are doing 5 trades a week.

http://en.wikipedia.org/wiki/Pattern_day_trader


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## misssoprano (25 March 2013)

*Re: Where to start?*



Trembling Hand said:


> Actually you will probably learn *nothing *more than the rest of the 90% that always lose. Therefore you are simply wasting money for some excitement. Go buy a ticket to Asia and learn something AND have fun. IMO.
> 
> You are simply planning to fail - not planing to win.




Wow, totally negative.  Great answer.


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## Julia (25 March 2013)

*Re: Where to start?*



misssoprano said:


> Wow, totally negative.  Great answer.



Perhaps consider it might be a genuinely helpful piece of realistic advice.


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## HIA (4 March 2014)

I was browsing the forum looking for an answer to the same question. Where best to trade penny stocks, with the least amount of cash and fees at minimum and landed on this. Channy, blame your long winded story, but most people instead of answering you, became too caught up in advising you how you are set up to fail. And not very kindly at that. 

Anyway, will continue searching.


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## lawnmower79 (10 March 2014)

Just read through this thread and, whilst I understand that the veterans of the market is trying to give sound advice, some are being a bit too forceful about it.  There are some lessons you only gain by LOSING money.  I've lost money with CFDs so I know first hand, and boy does it teach you lessons fast.  You can read textbooks, sources, etc. but at the end of the day, if you're trading your hard-earned, you will learn just that much faster, because that negative experience STICKS with you (hence your "lesson").  You can read about that bad trade through textbooks, etc. 10 times and still not remember it, you can even do that bad trade on demo accounts and it still won't stick to you to the same degree as if you did the real thing.  Those who have traded and failed with their actual hard-earned will know what I'm talking about.  

So asking him to not trade because he'll lose money is a little counter-productive, especially since he said he's ready to lose that money.  There's many ways to learn a lesson, if someone chooses to learn it faster by losing money then it's his choice.  It's his hard-earned after all, he has the right to play with it however he wishes.  Hey, you can read a thousand textbooks before trading and STILL lose money, maybe just slower but you can still lose money.  So just let him be.


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## lachlanp (10 March 2014)

Hello

I have researched this question a lot and this is this answer I have come up with.
Don't look for penny stocks that are Australian based, no disrespect to our country but we are small so our ASX does not carry a lot of low stocks. I would suggest using an online broker who is international such as ETrade. The American stock market has a lot more penny stocks and a lot more penny stocks scams which you can utilize to make yourself some money, if you study hard and learn how to manipulate these scams like sell just before the pump finishes and the stock goes into a dump. 

Also its not harmful to chuck in a few long term dividen stocks in your portfolio that get re-invested for more shares try that as well.


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## springhill (10 March 2014)

lachlanp said:


> Hello
> 
> I have researched this question a lot and this is this answer I have come up with.
> Don't look for penny stocks that are Australian based, no disrespect to our country but we are small so our ASX does not carry a lot of low stocks. I would suggest using an online broker who is international such as ETrade. The American stock market has a lot more penny stocks and a lot more penny stocks scams which you can utilize to make yourself some money, if you study hard and learn how to manipulate these scams like sell just before the pump finishes and the stock goes into a dump.
> ...




What is your definition of a penny stock?

Share price range?

Market cap range?


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## lachlanp (11 March 2014)

springhill said:


> What is your definition of a penny stock?
> 
> Share price range?
> 
> Market cap range?




A penny stock is both of those a company that doesn't have enough market capital to be listen in the index or a stock trading below $5 (or pennies)


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## springhill (11 March 2014)

lachlanp said:


> A penny stock is both of those a company that doesn't have enough market capital to be listen in the index or a stock trading below $5 (or pennies)




Plenty of money to be made in 'penny dreadfuls' on the ASX, I have found that the key is to establish a strict set of criteria regarding stock selection that can help move the odds of success in your favour.

Penny stocks are one of the best ways to lose money, however the gains can be astronomical if your risk tolerance is made of kevlar.


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## Rig Pig (23 January 2017)

Interesting view on penny stocks presented here:

https://thaishares.com/trade-thai-shares-not-american-penny-stocks/


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