Monday, September 20, 2010

By Ahmad Hassam

Many people don't take penny stocks seriously. Penny stocks are those stocks that are normally trading for less than $5 per share. Most of these stocks get traded on the Over the Counter Bulletin Board (OTCBB) and the Pink Sheets. Regulation on OTCBB is not as strict as that on a regular stock exchanges like the New York Stock Exchange (NYSE).

No doubt penny stocks are risky. So are ordinary stocks or for that matter all types of investments. But as a prudent investor, you should only invest that money in penny stocks that you can afford to lose. One way to invest in penny stocks is to only start with $200 and then slowly grow that amount into $1,000. Then turn that $1,000 into $10,000. Then that $10,000 into $100,000. You got the picture. This is the best way to invest in penny stocks. This way, you don't lose your money.

This is the story of James Connelly, an Ivy League statistical genius and how he hit upon a secret mathematical formula that would tell him when a penny stock was on the verge of a breakout and about to make a big move in the market. He started with only $1K and in just 38 trades turned that amount into $1M in 1 month. His average return per trade was 20%.

As a student, James Connelly majored in mathematics with primary focus on finding winning stocks. He was convinced that he could find a statistical formula that could predict winning stocks. He spent months researching trading patterns, volume and resistance levels to find the secret recipe that would predict winners.

He ultimately discovered that the Psychological Support Level (PSL) was the key variable that determined the four shared variables of winning stocks. He developed an algorithm that used PSL as the key factor in determing the winners. He applied that to penny stocks and was able to prove practically how anyone can turn $1K into $1M with penny stocks. He is also known as the Stock Prophet!

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