Tim Sykes on Penny Stocks

Tim Sykes discusses how to trade penny stocks.  These are the stocks which trade for less than $5 on the listed exchanges.  Trading penny stocks requires that a trader rides these stocks for the momentum in them, rather than attempting to pick a diamond in the rough which will be the next Microsoft.  The key to trading penny stocks is to ride the momentum and get out as soon as it dries up. 

Sykes stresses that penny stocks shouldn't be looked at as a get rich quick scheme.  It requires consistent profits over a long period of time to make a decent buck out of it.  With penny stocks, huge amounts of dollars cannot be committed to a trade as the risk is too high and your account value could be wiped out fast. 

He suggest that without using leverage, there is no other form of investment that can yield a return as high as a penny stock, if your willing to take the risks.
Tim Ord
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