Penny Stock Pumps & Promotions – What’s The Most Effective Way To Trade Them?

I know the way to trade penny stock pump and dumps. There’s a certain way to screen out the picks which will most definitely be losers. If you can screen out the losers, then you’re left with the winners. I can provide you with some general guiding principles to help become a successful penny trader by leveraging the power of the pump.

If you take a stock which has been lying dormant for a few months, with nearly no trading volume, and introduce this stock to thousands of speculators or traders who like to take on risky / high reward type stocks, you have got the potential for a huge p.c. gain in that actual equity / stock.

What would create this kind of situation for a stagnant stock? A paid promotion, naturally. These are also known as “pumps” by those well capable in the field of penny securities dealing. Penny pumps are a consistent occurrence in the current’s market. In the bear market of 2008 these sorts of stock promotions virtually came to a dead stop, but things are back to basics now. Essentially , a public traded company with inexpensive shares will hire a stock promoter ( s ) to send out e-mails and snail mail to folk who’ve expressed interest in penny stocks. Its a pretty shady tribulation, and the general public who buy the promoted ( or pumped ) stock will come out with a lot less money than they originally invested in the stock.

Anyways, here are a pair things to think about to screen out the bad penny picks from the coolest ones :

-          The amount of shares major. You can learn how to judge how probable it is that a stock will move if you understand the share structure. There’s a few other things about share structure to think about that will permit you to rank the penny share / stock and it’s probabilities of moving up.

-          Who it is that’s pumping / promoting the stock. From my discoveries, penny stocks that are promoted by certain stock promoter have a higher possibility of rising in price than stocks pumped by average stock promoter. I will not list them all in this post but I am doing counsel members of my site on this factor.