“What have you been up to lately?” they asked him during the holiday party. Old friends catching up during the holidays was nothing new. But his answer was a new revelation.

“I’ve been trading penny stocks for the last six months.”

Shocked looks followed by laughter. He sat there with a straight face. “No, seriously. What have you been doing for work?” They didn’t believe him. Penny stocks were a joke to them. They couldn’t understand that he was getting rich on the pink sheets. They didn’t realize he was living a life of luxury in a tropical locale while trading penny stocks from his smartphone.

The thing is…he didn’t care to explain any longer. He’d had the same conversation with dozens of other friends and family members. He knew explaining and elaborating would be a waste of time. Let them laugh. He was already laughing all the way to the bank each week.

While the story above may be hypothetical, a quick Google search proves it’s not too far from the truth for many successful penny stock traders. Just look at Josh Sason who made millions, or Tim Grittani who started with $1,500 only to turn it into a portfolio worth over $1 million. People are making a lot of cold, hard cash through the penny stocks. You can, too.

But you need good information, proper strategy and a little bit of luck on your side. That’s where we come in here at Stacked Bid. Below you’ll find everything you need to invest in the pinks sheets during 2019, including a detailed list of our ten best penny stocks to be watching out for in the coming year.

The 10 Best Penny Stock Picks in July 2019 are:

1. Yuma Energy Inc. (YUMA)

2. Palatin Technologies, Inc. (PTN)

3. J C Penney Company Inc. (JCP)

4. Chesapeake Energy Corporation (CHK)

5. ImmunoGen, Inc. (IMGN)

6. AK Steel Holding Corporation (AKS)

7. Nio Inc. – ADR (NIO)

8. Groupon Inc. Common Stock (GRPN)

9. ASE Technology Holding Co Ltd. (ASX)

10.  Fitbit Inc. (FIT)

The Risks and Rewards

Before we break down solid penny stocks to watch, we want to offer a quick disclaimer. You can make a lot of money investing in penny stocks. You can also lose a lot of cash on the pink sheets.

Penny stock trading is high risk, high reward. While you take a lot of risks, you have the potential for enormous returns. And why are there so many risks involved with penny stocks? Most agree there are three reasons penny stocks are risky.

First, there’s a lack of credible information surrounding most penny stocks. With no minimum standards for many stocks on the pink sheets and a lack of in-depth financial data, it’s rare you’ll find a company you can properly research and vet before investing.

Next, most investors quickly realize that a stock is considered a “penny stock” for a reason. Often, these companies are significantly overleveraged and on the verge of bankruptcy.

Bankruptcy leads us to our third penny stock risk – scammers. Many penny stock scammers make big bucks by luring investors into a nearly worthless stock before taking their money. You must be aware of the scams surrounding the pink sheets. Here are a few common ones:

  • Pump & Dump Schemes
  • Reverse Merger
  • Short & Distort
  • The Guru Scam
  • Mining Scams
  • Offshore Scams
  • No Net Sales

The Definition of Penny Stocks

While there is some variation, most consider penny stocks as anything trading outside major market exchanges under $5 USD per share. Traditionally, anything under $1 USD is a penny stock.

Penny stocks are an extremely high-risk investment, and most investors consider them to be incredibly speculative. Most companies that find themselves trading on the pink sheets suffer from small capitalization, a lack of liquidity, large bid-ask spreads and limited disclosure.

These stocks do not trade on respected the major market exchanges. You won’t find penny stocks on the Nasdaq. Often, penny stocks have no SEC compliance and regulation to worry about. To say the wide world of penny stocks is the like the wild West wouldn’t be a stretch.

You can invest and trade penny stocks through the OTC Bulletin Board, also known as the OTCBB. Individual companies are also exchanged through the pink sheets, which are completely unregulated.

Get Started Today

If you’re a high-risk investor looking to see significant gains, then the penny stock markets may be right up your alley. Just remember – penny stocks will always be a big gamble. Only with proper research and strategy will you see profits with speculative plays.

While there’s a bit of doom and gloom above, there’s still a lot of money to be made through the pinks sheets. We wouldn’t have complied and created this article if we didn’t believe in penny stocks. Start slow and learn the markets before taking huge gambles that can offer huge payouts.

Things to Remember

If you’re still here, then investing in penny stocks may be right up your alley. If you’re an investor with a high tolerance for risk, then the pink sheets could be for you.

Before you make some trades, you must remember one thing: Penny stocks have a high level of volatility. Due to this fact, there’s the potential to make a lot of money and to lose a lot of money when investing in the pink sheets.

It’s vital to take certain precautions when investing in penny stocks. With precautions and a proper strategy, you can minimize losses – to a certain extent. One precaution many investors take when trading penny stocks is a stop-loss order. Before entering a trade, you have a predetermined stop-loss order that ensures you exit the market immediately if the market moves too far in one direction.

While many investors have illusions of grandeur when hitting the pink sheets for the first time, it’s important to note that realistic expectations should be managed. It can take months and years to find gains materializing in the stock market. Most investors don’t turn a few hundred into 100K in a matter of weeks.

Stocks trading on the pink sheets and the OTCBB usually have low trading volumes, which increases the risk of the investment. Any penny stock trading less than 100,000 shares a day should be avoided as you learn the market You could get stuck with shares of little to no value if you invest in a company with extremely low trading volumes.

To mitigate your risk while you start trading, you can trade penny stocks (under $5 USD a share) on the American Stock Exchange (AMEX) and the Nasdaq. These exchanges are continually regulated, which ensures you won’t be taken for too much of a ride while starting out.

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