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Matt Thomas

Founder of, Creator of the Trading Success Framework Course & Trading Paradigm Skool Community, and Intraday Futures Trader Using Auction Market Theory & Profiling (Volume & Market Profile).


  • enrique vanegas says:

    Thank you for sharing this story of a 3,400% return trading penny stocks. Given that penny stocks trade on the Pink Sheets or FINRA´s OTC Bulletin Board (OTCBB) and since these companies aren´t required to file with the Securities and Exchange Commission (SEC), it´s difficult to find information to formulate a logical conclusion on whether or not the company is likely to survive let alone thrive. However I have two questions for you. First, how credible is the company´s management? A company´s success depends on the quality of its management, and penny stocks are no different. Is there any way to find out about the management´s track record to determine whether company executives and directors have had any notable successes or failures, regulatory or legal issues and so forth? Second, financials. Although penny stocks generally don´t furnish in-depth financial information, is it possible to evaluate the financial statements the company does release?

    • Matt Thomas says:

      Hi Enrique – those are great questions. Management, financials, and other fundamental research components are certainly critical when choosing companies to invest in long-term, but those things aren’t usually the main focus when it comes to trading penny stocks. Taking the time to really dig into the financials of a penny stock are typically futile. The approach within Penny Pro is much more short-term, like day and swing trading strategies for example (1-5 day hold times on average). For these types of trades, technical analysis (candlestick charts, patterns, volume, and various indicators) are of major importance. Catalysts like partnerships with much bigger companies, buyout rumors, and other stories can drive the price of penny stocks drastically in the short-term as well. Things like management and financials just aren’t as important since hold times are relatively short. It’d be different if the horizon was long-term, but it’s extremely difficult and rare to pick out those hidden gem penny stocks that ultimately become massively successful companies. It’s about capitalizing on their volatility within just a few days.

  • Dave Sweney says:

    Lots of great tips in this post on advice from Jeff Forehand regarding investing in penny stocks. He is a Penny Pro member who obviously did his homework, followed a system and did not allow emotion to come into play as so many people do, and was willing to take the many small wins over trying to hit the ball out of the park with one trade or investment.

    I heard some good advice from my father long ago – you never can go wrong by taking your money off the table and playing with house money. Whether that is playing a game of cards or investing in stocks, this holds true. Calculated risks are necessary, but using a system to know when to hold ’em and when to fold ’em and sticking with that over time wins races and makes you money.

    Penny stocks have gotten a bad reputation from movies, experiences of some people not having the discipline, and from the media. There are plenty of people that are making money though from them, as you say the returns are higher, as is the risk. The big stocks do have a place, but the returns are not going to be as high in relatively short periods of time.

    My thoughts are that it depends at what stage you are in life when it comes to risk. When you are younger, you can create a more risky portfolio, and as you get older, move to more traditional and less sexy investments. My view is as an older person, now I am 62. This is what I have done. 

    Good article that people can learn from. The free training you are offering is also helpful, people do need to get educated prior to making any investment. The research and information will help them have success as so many others have had. 

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