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I don’t know much about trading, but I’m reading about it. I don’t know where to start. Is this program is good for beginners? the name has “Pro” portion, so I don’t know if it still applies to my case.
It’s good that they have video lessons and a chat room, but do they offer instant feedback? do they “hold your hand” while you are trading? what happens if you messed up a trade, will they be there to save you?
Hi Mahmood. The Penny Pro program caters to beginners, providing them with quite a bit of educational resources to build a foundation in trading concepts and strategies. Video lessons/DVDs are available on a handful of topics starting with your most basic trading terms and building up to intermediate and even expert level material. In addition to that, there are daily video watch lists recorded by Jeff Williams himself, real-time trade alerts sent out via text & email, and a chat room for sharing ideas during market hours. This is a solid starting point for individuals looking to learn about the penny stock/small cap market.
Jeff Williams also offers a next-level mentorship service along with Davis Martin called Traders Council. If you’re looking for instant feedback and hand-holding, this is the place to be. Members take part in live trading sessions with Jeff and Davis every single day, which is shared via live stream. This allows members to watch the entire process of trade planning to execution from experts. This type of access is invaluable for individuals wondering what it takes to become a self-sufficient, consistently-proftable trader living within the markets every single day.
To answer your last question, it depends on exactly what you mean by mess up a trade, but you’re the one in complete control of your own portfolio. If you make some sort of mistake like enter puts instead of calls, short instead of go long, accidentally enter a position, etc., usually it’s best to just exit the trade as soon as possible since it wasn’t part of your plan. But again, you have to be 100% accountable for your own portfolio. Mistakes like this do happen sometimes, but nobody else can push the buttons or “save” you besides yourself.
I have been researching trading lately and I think it is nice to understand what goes on behind the scenes. Penny Pro sounds like an interesting program. I think that holding these stocks for only a few days is a good tip to decrease risk especially because you said that these companies aren’t typically good long-term investments.
I think that the resources you have described sound fantastic. Most people just expect you to trust them with your money but this is an actual opportunity to learn the ins and outs of trading, and apply concepts and strategies on your own. I have read that “normal” people cannot compete with experienced traders so I shouldn’t bother. Do you think that is true or can anyone learn how to trade properly?
Hi Renton – great questions. There are certainly a lot of people who think that retail traders can’t compete with large firms when it comes to trading. The argument is that large firms have more resources, capital, connections, etc. But this idea applies mainly to well-known, blue-chip stocks. Large firms don’t typically get involved with lower-priced penny stocks, so that’s where your average retail trader can potentially find an edge.
Overall, I think that anyone can learn how to trade properly, but the entire learning process is harder than most people think. Success won’t happen overnight and it’s actually more of a mental game than anything else. It helps to be great at finding solid setups, reading charts, and researching fundamentals, but none of that really matters without the proper mindset and discipline to stick to trade plans, manage risk, and refrain from acting impulsively. The psychology of trading is always the toughest aspect for people to overcome.
I have invested in tech stocks (American) before, and I still do, but I’m yet to go down the penny stocks route…so I know very little about it.
I have heard that certain people have become very wealthy during their college years, trading penny stocks on the side…I’ve also heard they can be quite dangerous and volatile.
What are your thoughts on this? Do you feel they are more dangerous then regular stocks?
Hi Chris – great question. I think penny stocks are dangerous IF people don’t understand them. While it’s true that penny stocks are oftentimes sketchy and unprofitable, they can still provide massive opportunities for gains in relatively short periods of time. We’re talking about potential swings of 50-100%+ on any given day, which is rarely, if ever, seen with your classic blue-chip stocks.
Where people make a big mistake with penny stocks is in trying to invest in them on a long-term basis, which might pan out on rare occasions, but for the most part these companies are garbage and trending downward. So it’s important for people to understand the different between short-term trading and long-term investing when it comes to penny stocks. The major opportunities for profits are typically in the short-term, and also through Shorting instead of going long.
Overall, trading penny stocks doesn’t necessarily have to be risky if approached correctly. In short timeframes and with proper risk management measures (stop losses, etc.), the risk can be controlled. All trades/investments are inherently risky, but it comes down to your understanding of them and the actions taken to manage the uncertainty.
If I were to blindly throw money at the stock market for the long-term, I would hope I choose blue-chip stocks because they’re established, steady companies. The returns wouldn’t be too exciting with my portfolio growing somewhere around 5-10% per year, but there’s stability there. With penny stocks on the other hand, things would become much more unpredictable and volatile, making a long-term approach less than ideal. So for penny stocks, the key is to capture that volatility in the short-term in the direction you want. If that can be done, there’s a lot of money to be made, but it takes an active, risk-managed approach.