Penny stocks: Buying at $0.0001 and selling at $0.0002?

Question

I recently started trading penny stocks with the advice of a friend. He told me to buy a certain stock at $.0001 and told me to hold on to it until it doubled. I bought $150 worth of that stock. I waited about ten days without seeing any results. The price would jump to $0.0002 buy my sell order wouldn't execute. My friend told me to be patient and said something about a market maker buying it at $0.0002. After ten days the price of the stock tripled at my sell order filled at $0.0002. I walked out with $150 in profit (doubling my money.) My friend on the other hand doubled 4 thousand and ended up with 8 thousand dollars.

Now I am tempted to invest $1,000. My question is doesn't this seem too good to be true? My friend claims that there is practically no risk involved because you can always sell back your stocks at $0.001 to the market maker who would buy it immediately. Is this true? What else should I know before buying any further? THANKS!

CORRECT ION TO LAST PARAGRAPH: My friend claims that there is practically no risk involved because you can always sell back your stocks at $0.0001 to the market maker who would buy it immediately. Is this true? What else should I know before buying any further? THANKS!

THANKS FOR THE REPLIES.

My question that I have remaining is that is it not true that I can always get out of the stock by selling it at $0.0001? Ive heard the marketmaker will buy it immediately.

Answer 1

It is NOT true. You can not count on a market maker being willing to buy at $0.0001 or any other price.

If you want to try out your friends theory I suggest you limit the amount you put at risk to the profits you have realized. You currently have $150 profit, so it you want to try again only invest $100. If you double that amount, try again with $200. If you double that, try again with $300 or $400.

If you can double your money every 10 days you will soon become the richest person in the world. How likely do you think that is?

Answer 2

1

Answer 3

Penny stocks are no more secure or risky than any other stock market play. Remember that to sell when they go up there must be a buyer willing to purchase - if there are no buyers you will have to sit on the stock. Liquidity is an important factor.
Get a free guide to penny stocks at
http://www.pennystocktrading.net

Answer 4

You got lucky. Most penny stocks are very risky and can go belly up in a heartbeat. There is a bid price and an ask price. You sell at bid and buy at ask plus paying commission. Your sell order wouldn't be executed until the bid price his $0.0002. Read the financial reports that companies have to file and don't buy anything that is recommended by unsolicited spam.

Answer 5

This penny stock service has years of proven experience. Ultimately it is the best service for beginners to use https://tr.im/tradepennystocks
You will have to wait between 3 and 10 days to get into the system in most cases. When I signed up it took 8 days. I wished it was faster, but if you can wait a week or two to start earn life changing money than you will have what it takes to make it in this business.

Answer 6

There isn't a market for penny stocks must just pump and dump. Almost a sure way to lose money.

Answer 7

When you start losing money on some deals you won't be asking the same questions. What you are doing is gambling for short term stock gains. It's exciting, but can ruin you and your social life. Diversify your money. Check my profile for a neat idea.

Answer 8

2

Answer 9

why market maker want to lose money buying your stock? no harm trying, but play it small to test the water. don't easily get greedy, cos that is the first reason of stock market crashes.

Answer 10

making money in the stock market is always hard

what you are trying to do is even harder

you won't think this is such a good idea once you get wiped out a few times.