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Microcap Stock Picks – Printable – The False Lure of a Penny Stock Message Board

Posted on | July 29, 2010 | No Comments

Microcap Millionaires: New “Bottom Bouncer” stock picks that have been our most consistent winners for over two years now.

A penny stock message board is not where you should go to select penny stock picks. While investigating topics to discuss in my penny stock articles, I discovered a rather unsettling phenomenon: people everywhere are seeking online public communities in the form of penny stock message boards to gain wisdom and advice and share their ideas.

The Internet is a powerful tool, but it is also fraught with peril. The micro cap stock trading field in particular is infamous for billions of dollars of fraud every year. Penny stocks have been one of biggest headaches for the Securities and Exchange Commission (SEC) for over a decade. Unfortunately, the proliferation of online trading and online communities has only made the SEC’s micro cap stock fraud headache even worse.

If you find a penny stock message board with any real level of activity on it, you can guarantee unscrupulous brokers have infiltrated the community posing as convincingly legitimate members to pass on “advice” to doe-eyed newbies seeking a pot of gold at the end of the rainbow.

Remember, this is a competitive industry and as warm and rosy as it may seem to imagine good-hearted altruists passing along secret top penny stock picks to the less savvy, it just isn’t happening. In most cases, they’re probably trying to use subtle hype to orchestrate a pump and dump scheme. In rare cases, they may even be trying to lure your business to snag you in a chop stock scheme.

A pump and dump scheme involves hyping a stock to get a bunch of less-than-savvy traders to buy up a ton of the stock in a short period. There is no more fertile ground to find a ripe grove of growing newbie traders than a penny stock message board.

As those traders buy the stock, the demand raises the value of the stock. When the brokers spreading the artificial hype believe the stock has reached its artificial peak, they dump it by selling it off fast. The stock then nose dives before the newbies can sell it off.

Remember that nano cap stocks usually aren’t very liquid, so it can be slow and difficult process to sell a large batch of penny stocks, especially if they’re plunging in value.

Visit my comprehensive and hype-free penny stock site to learn what you must know about how to trade penny stocks and discover more of the frightening reality of the Penny Stock Message Board.

Article Source:

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Does day trading on biggest gainer / loser stock make you money?

If followed with an exit strategy and not looking for huge gains. If its a winner ride the wave and if its a loser buy low and sell if it goes a bit higher?

Microcap Millionaires: New “Bottom Bouncer” stock picks that have been our most consistent winners for over two years now.

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