Interesting thread, I think the point is that all these questions should be asked to the friend. Post his stock picks on here cause I know I am curious.
Joe I recommend you go to www.tfnn.com. This is the website for the Tiger Financial Network, a business talk radio station. The CEO of of the station, Tom O'Brien, hosts 2 radio programs, one from 9-10 am and the other from 3-5 pm central time Monday through Friday. Tom's approach is based on technical analysis. You may call into his programs with questions about specific stocks and may also listen to his programs via the internet. If your work environment is a problem, the programs are archived on the website. Unlike a lot of pros, Tom will give an honest assessment of any stock you bring to his attention, whether it is a penny stock or a blue chip, according to his analysis technique. Tom has a couple of advisory services and posts his track record to the TFNN website on a monthly basis. You posed a question to the Elitetrader community regarding the possibility of making enough money trading stocks to buy a Benz. Unfortunately, your query was not treated seriously and elicited some sarcastic remarks that masqueraded as answers. I must say that perhaps this is because so many of the Elitetrader community know from bitter experience just how difficult it is to wring a few pennies out of the market these days. If your friend is truly experiencing the success you describe, I would suggest that you align yourself with him and learn his trading technique. It is not like you will be taking bread out of his mouth as this market is so big, sharing some of his knowledge/experience with you will not hurt him. After all, there is nothing that succeeds like success. Best of luck to you, Louie Rousseau
I discussed his stock picking skills some more. Here is what I have gleaned from my buddy. I only post this here because I want it to be technically picked apart. And, for that, I need your help. Here are his rules for picking stocks... 1. It is easier for a stock that is worth $1 to raise to $2 than it is for a stock worth $30 to go to $60. However, either case your money is doubled. Therefore, he said go for cheap stocks. 2. Over a period of time stocks have a normal/avg/typical/historical price that they are traded for (not sure what this means). Research the company and then pick the stock that is trading below its typical/normal/avg/historical value. I need more info on how he chooses his entry point. 3. Put a stop on your stocks. If a stock is worth $10 then put a stop on it for $9. As the stock moves up, then move the stop up. From what I have read, I believe that you guys are pros, I can't believe that this could be that simple. Please help me by critiquing this as much as possible.
Dear Jfallon, Financial Markets basics are common sense. Stocks and other financial instruments change hands one time after another .You buy stock and you sell it later for a profit. ( or a loss) If you buy low you'll sell high and you'll pocket the profit. If you buy high you'll sell higher and you'll pocket the profits again. Easy.. right ?? No rocket science so far.. However , the deal is to find out when such a stock will go up/ down and then take action. That's not an easy task . That's a very hard job that can take you as long as a life time to figure it out and some people lose everything ( and i mean it ) and they never achieve it. Take your time. Do some research ,study some books and you can come back later with more specific questions.
It really isn't that simple. I'm not at all doubting your friend, because I have a friend also who doubled his money on SIRI (check it out) in less than a month. That friend, also has someone who pulled in about 1000% return on a different penny stock in about 6 months. I am personally very interested in penny stocks, that's why I would like to see your friend's upcoming picks and reasons why. If he is for real, he should be able to show his strategy in action for you. Maybe you'll even make some money too. Problem with penny stocks is that there is a reason their price has been destroyed so much. Most of them are only months away from liquidation. A $1 stock may easily go to $2 but it can dissapear much easier. A $30 stock may have some serious resistance going to $60 but the chances of it dissapearing are very low.