Hi I am Jeff, and welcome to my wetpaint wiki page. This page is intended to be an extension of my existing website pinksheetsstock,info. My ultimate goal is to educate you about penny stocks. Penny stocks have always been give a bad rap due to their high volatility and uninformed traders making poor decisions.

Penny stock trading should not be considered an investment, like your 401K. Penny stocks trading is more like gambling in a casino, in my opinion. The good news is that with some practice, education and firm understanding of what gets in the way of poorly executed trades (such as human emotion) you can turn the odds in your favor. This gives you a better edge than any gambling house.

Here is an example of a penny stock that surged 62% in just a couple of days

1. How to Pick Penny Stocks

Let's look at a good example of penny stock picking. Lately there has been an explosion with this Penny Stock Prophet phenomenon. It has been over two years now since the release of the newsletter where by James Connelly began to endorse microcap stocks based on a statistical strategy he formulated while a student at MIT. In that time there's been a steady rise in the interest gathered by the e-newsletter.

The stock market in general and top penny stocks particularly, are hardly a sure thing from a wise investment point of view. The finance industry is a living, breathing entity. No one knows for sure what's going to come about next.

Many people been searching for the "holy grail" of stock trading since the beginning. If there was some form of magic wand or crystal ball..... just some way of realizing with conviction the direction...

But you know that This is not going to happen. It can be unimaginable to calculate the course of the market. Even the most skillful professionals are drastically wrong a considerable percent of the time. So I find it engaging that in this period of information, with everything appearing so easily available to anyone with a web connection, that you can't find a whole lot of bad reasons for having the Penny Stock Prophet Newsletter.

It seems that in today's world, bad news moves as quick or possibly even more quickly than fantastic news around the world-wide-web. When you do something wrong, start using investors, or operate a dishonest kind of business... it's the kiss of death! You will find that info all over the place. And I think that's wonderful!

In all this time the Penny Stock Prophet just continues to keep moving along, accumulating subscribers, and recommending cheap stocks that might just make serious cash.

Certainly, with nothing in life being perfect, there will always be a few people who may have signed up, experimented with investing in one or two stock picks, didn't come up with any profit, and want to blame someone else. Who was the culprit here? The investor or the newsletter?

Does the newsletter select pure winners.... of course not. No one can select pure winners, we should be realistic. However the biggest distinction between prosperous traders and those that have difficulties, is not so much the selecting, nevertheless that is most certainly a big part of the situation,... the most important variable is definitely the individual themselves.

If speculating were very easy, absolutely everyone could be earning money doing it. Why would anyone wish to go to work if they could stay home and make a killing in the stock market?

You'll find people however, that do earn a living at investing. They have studied and utilized the skill of investing until they became comfortable with a process that works well for them. They made the commitment to learn to be a prosperous trader.

At the heart of any and every productive investor is a sensible risk and money management method. A process that preserves their capital as rule number 1. So in the event a trade doesn't go the way they expect to have it to, they will get out with negligible damage. When a trade does go the way they are intending, they create a good chunk of the profit.

Winning at trading the markets is focused on playing the probabilities. Realizing well known patterns, determining risk to reward ratio's, isolating upside potential, working out entries and exits...

This is exactly what James Connelly does with his formula. Math concepts can certainly and does make some sense out of a chaotic environment. Investigate chaos theory. A computer program can extensively shorten the the time you will need to analyze complex problems and equations. As traders, we simply want to try and play the probabilities. This gives us a little benefit.

Back when I ran across the news letter, there had been 3 picks weekly being sent out. There were some terrific ones, picks that I did effectively with, and picks that didn't do so good. This is typical.

Recently, in the daily notifications, James is not hesitant to say "hey, I'm not really finding anything that looks good, lets wait". And in my opinion, this has already been a good tactic. As opposed to feeling the need to produce a given amount of picks, he now is that specialize in the percentage of winners. I feel this is greater for newbies who've minimum experience in conducting their own due diligence. It gives you a way to learn with percentages to your advantage.

The past Two picks by the Penny Stock Prophet have done relatively well. Look back at LYJN which we obtained on March 17th, and FRHV which we received on April 9th. Go to Google finance and enter in the stock symbols. You will recognize that these 2 picks were large winners.

If you need to learn about investing in the market, pennies are a good start. They are very inexpensive, and that means you don't have to risk a bunch of money. Also, I strongly recommend that novices paper trade to start with for a couple weeks, until you begin to get a feel for trading. Don't risk any money until you are comfortable with the whole process.