The 4 Rules Of Trading Penny Stocks

One of the most common emails we get here at DamnGoodPennyPicks.com are from people wondering about the do’s and don’ts of trading the best penny stocks. While alot can be said on the subject, we distilled our take on the matter into Four Rules which follow:

Penny Stocks: The Four Rules of Trading

1. Never Risk More Than You Can Afford To Lose

If you are trading penny stocks with money you need to pay your rent or buy milk for your kids or make you car payment, stop what you are doing and come back to penny stocks when you have extra cash that will not hurt you if you happen to lose it. People do make money trading penny stocks. But people also have trades go against them. Make sure the money you are using to trade cheap stocks isn’t money that is going to hurt you badly if you happen to lose it. Please.

2. Don’t Fall In Love With Any One Situation

So, you research a stock or get a hot tip and form an idea regarding a stock and…you stick to your opinion ONLY AS LONG AS IT’S PROFITABLE. If you’re proven wrong, get out and wait for the next opportunity. There are always stocks that are performing now. So if your “winner” turns out to be otherwise, don’t frown, don’t fret, don’t double up, just move on. If you have any profits in your stock than multiply this advice by 10. Your reason or opinion or where you think a “winner” is going means nothing. It’s the price of the stock here and now that matters. If it isn’t what you thought it would be, get out.

3. Stay Alert, Especially On Fast Moving Stocks

This may sound obvious but so many people rack up losses disregarding this rule. Watch what you are doing. Never try to fit trades into your schedule when a stock is on the move. If you know you have to be away from your computer for a long while, consider exiting your positions and diving back in when you can watch your screen. If you’re trading full time try not to schedule anything during market hours. Also, always recheck your orders to make sure you’ve entered them correctly. On some cheap stocks you’d be surprised how easy it is to add an extra zero. Once again, STAY ALERT. It’s your money you’re playing with.

4. You Can Never Go Poor Taking Your Profits

Sure, stocks run. Sometimes a lot more than where you thought they would go. So what? They also swing down too. If you’re comfortably ahead in a given situation consider selling and booking your profits. Even if they are small. Racking up lots of small profits in a row will eventually result in BIG gains. No one ever went poor taking profits.

And that’s about it.

At DamnGoodPennyPicks.com we have been trading penny stocks for a while and are always available to answer any of your questions. You can reach us via email at info@damngoodpennypicks.com or with our contact form on our website at http://www.damngoodpennypicks.com

All the best as you trade penny stocks,

Jeff Mirkin

How Stocks Trade?

By Investopedia Staff   A A A

Filed Under: Beginning Investor, Capital Market Beginning Investor, Capital Market

Investopedia: Are you looking for more information on currency trading? Try our Forex Walkthrough, it goes from beginner to advanced.

Most stocks are traded on exchanges, which are places where buyers and sellers meet and decide on a price. Some exchanges are physical locations where transactions are carried out on a trading floor. You've probably seen pictures of a trading floor, in which traders are wildly throwing their arms up, waving, yelling, and signaling to each other. The other type of exchange is virtual, composed of a network of computers where trades are made electronically.

The purpose of a stock market is to facilitate the exchange of securities between buyers and sellers, reducing the risks of investing. Just imagine how difficult it would be to sell shares if you had to call around the neighborhood trying to find a buyer. Really, a stock market is nothing more than a super-sophisticated farmers' market linking buyers and sellers.

Before we go on, we should distinguish between the primary market and the secondary market. The primary market is where securities are created (by means of an IPO) while, in the secondary market, investors trade previously-issued securities without the involvement of the issuing-companies. The secondary market is what people are referring to when they talk about the stock market. It is important to understand that the trading of a company's stock does not directly involve that company.

The New York Stock Exchange
The most prestigious exchange in the world is the New York Stock Exchange (NYSE). The "Big Board" was founded over 200 years ago in 1792 with the signing of the Buttonwood Agreement by 24 New York City stockbrokers and merchants. Currently the NYSE, with stocks like General Electric, McDonald's, Citigroup, Coca-Cola, Gillette and Wal-mart, is the market of choice for the largest companies in America.

The trading floor of the NYSE

The NYSE is the first type of exchange (as we referred to above), where much of the trading is done face-to-face on a trading floor. This is also referred to as a listed exchange. Orders come in through brokerage firms that are members of the exchange and flow down to floor brokers who go to a specific spot on the floor where the stock trades. At this location, known as the trading post, there is a specific person known as the specialist whose job is to match buyers and sellers. Prices are determined using an auction method: the current price is the highest amount any buyer is willing to pay and the lowest price at which someone is willing to sell. Once a trade has been made, the details are sent back to the brokerage firm, who then notifies the investor who placed the order. Although there is human contact in this process, don't think that the NYSE is still in the stone age: computers play a huge role in the process.



The Nasdaq
The second type of exchange is the virtual sort called an over-the-counter (OTC) market, of which the Nasdaq is the most popular. These markets have no central location or floor brokers whatsoever. Trading is done through a computer and telecommunications network of dealers. It used to be that the largest companies were listed only on the NYSE while all other second tier stocks traded on the other exchanges. The tech boom of the late '90s changed all this; now the Nasdaq is home to several big technology companies such as Microsoft, Cisco, Intel, Dell and Oracle. This has resulted in the Nasdaq becoming a serious competitor to the NYSE.

The Nasdaq market site in Times Square

On the Nasdaq brokerages act as market makers for various stocks. A market maker provides continuous bid and ask prices within a prescribed percentage spread for shares for which they are designated to make a market. They may match up buyers and sellers directly but usually they will maintain an inventory of shares to meet demands of investors.

Other Exchanges
The third largest exchange in the U.S. is the American Stock Exchange (AMEX). The AMEX used to be an alternative to the NYSE, but that role has since been filled by the Nasdaq. In fact, the National Association of Securities Dealers (NASD), which is the parent of Nasdaq, bought the AMEX in 1998. Almost all trading now on the AMEX is in small-cap stocks and derivatives.

There are many stock exchanges located in just about every country around the world. American markets are undoubtedly the largest, but they still represent only a fraction of total investment around the globe. The two other main financial hubs are London, home of the London Stock Exchange, and Hong Kong, home of the Hong Kong Stock Exchange. The last place worth mentioning is the over-the-counter bulletin board (OTCBB). The Nasdaq is an over-the-counter market, but the term commonly refers to small public companies that don't meet the listing requirements of any of the regulated markets, including the Nasdaq. The OTCBB is home to penny stocks because there is little to no regulation. This makes investing in an OTCBB stock very risky.

Solar Wind Energy Tower, Inc. Letter to Shareholders

Solar Wind Energy Tower, Inc. Letter to Shareholders

3/18/14 8:15 AM ET (Market Wire)Print

Solar Wind Energy Tower, Inc. (OTCQB: SWET) (the "Company") announced today that the Company has communicated to their Shareholders stating:

To our Valued Shareholders,

Our Company continues to execute its business plan. On an open conference call in December, I discussed in detail SWET's mission and answered questions from the listeners. A replay of that call is still available on our website, "www.solarwindenergytower.com" and I encourage anyone who missed the call to review the replay.

Since the call update, the following are some more recent events:

-- Our agent in Rajasthan, India has visited the Company here in the U.S. and we had a productive session reviewing and updating the strategy for introducing our solution to India. -- CobraCrest S.A. is making significant progress in Chile and a site for the first Tower in Chile has been identified and selected. -- Efforts in Mexico continue. We were just invited to another visit with officials and principals in Mexico to finalize the Tower site and discuss the overall strategy to gain approvals for a Tower project in Sonora. -- The Company is seeking a joint venture partner for the license in Arizona. We believe the first Tower project in Arizona now has sufficient depth to secure an investment partner. Our global strategy is to license the Tower solution and in exchange receive a license fee, development fees and annual royalty fees for a minimum of 20 years with a buyout option after 20 years. In Arizona, we took a different approach, by internally managing and controlling the initial development so that the Company could insure an equity position for our Shareholders. That initial expense has been borne by our public company, and we are now offering to share that reward-risk opportunity with a substantial financial partner. -- Additionally, our goal is to minimize or completely eliminate the need for short term convertible debt borrowings which have created the selling pressure on our public shares. I discussed this approach on the December call as being necessary at the time, however now is the time to move on to the next stage of our business plan which includes that financial partner.

SWET has assembled great "Teaming Partners" to pursue our unique hybrid solution for cost effective alternative energy. Whiting-Turner, Kroll Cranes, Commonwealth Dynamics and others have consistently contributed to the needs for the Tower development. Now we are expanding our team to include a member to arrange EB-5 funding for the Arizona project.

EB-5 funding is a government approved loan program available for projects that create jobs in the U.S., and we are confident that additional funding for the Arizona project in the range of $25-$50 million is available. Additionally, the Company has obtained a "Letter of Interest" from a major international funding source indicating their support to finance the Arizona project. The Company expects a definitive "Letter of Intent" to follow and we will update upon receipt.

Finally, we now have activated our Facebook page and Twitter account so please keep in touch!

Sincerely,

Ronald W, Pickett, CEO

About Solar Wind Energy, Inc. Solar Wind Energy, Inc. ("Solar Wind Energy"), a wholly owned subsidiary of Solar Wind Energy Tower, Inc., was established to utilize proven and validated scientific principles, combining them with state of the art construction systems to enable the development and company's core objective and focus is to become a leading enabler of clean, efficient green energy to the world communities, at a re-commercialization of large Solar Wind Downdraft Tower structures that produce abundant, inexpensive electricity. Our Companionable cost, without the destructive residuals of fossil fuels, while continuing to generate innovative technological solutions for tomorrow's electrical power needs. The Company intends to establish partnerships at home and abroad to propagate Tower Projects and meet the increasing global demand for electricity. The Company does not intend to own the projects. The business plan includes receiving license fees for territories, development fees during construction, and recurring royalty fees based on the actual kilowatt hours produced by the Tower. Solar Wind Energy has assembled a team of experienced business professionals, engineering and scientific consultants with the proven ability to bring this solution to market. Solar Wind Energy has filed and been issued patents that the Company believes will further enhance this potentially revolutionary technology. Solar Wind Energy, Inc., based in Annapolis, MD, is traded on the OTCQB under the symbol 'SWET'. For more information visit www.solarwindenergytower.com

Innovative Renewable Hybrid Solar / Wind Energy Technology We view ourselves as a hybrid solar/wind technology, reflected in the name, Solar Wind Energy Tower, Inc. The simplicity of our solution is comprised of harnessing the natural power of a downdraft created within the confines of our Solar Wind Downdraft Tower structure, a hollow cylinder reaching skyward into the hot, dry atmosphere heated by the solar rays of the sun. The water introduced by the injection system near the top of the Tower evaporates and is absorbed by the hot, dry air. The air becomes cooler, denser and heavier than the outside warmer air and falls through the cylinder at speeds up to and in excess of 50 mph and is diverted into wind tunnels surrounding the base of the Tower where turbines inside the tunnels power generators to produce electricity.

Abundant, Clean, Affordable Electricity Production The Company has successfully managed to economize the Tower, reducing capital costs and improving projected financial performance. This development was made possible by utilizing our recently announced software which can calculate and predict energy production by our Solar Wind Downdraft Towers given local weather data. By feeding the weather data into the program, the Tower's height and diameter can be adjusted along with the amount of water added as fuel to create a desired amount of energy. The outcome dictates the optimum size of the Tower's height and width.

Under the most recent design specifications, the first San Luis Tower has a design capacity on an hourly basis, of up to 1,250 megawatt hours, gross. Due to lower capacities during winter days, the average hourly output per day for sale to the grid for the entire year is approximately 435 megawatt hours.

Cautionary Note Regarding Forward-Looking Statements Statements included in this release may constitute "forward-looking statements." Actual results may differ materially from those projected in forward-looking statements. Such statements involve a number of risks and uncertainties such as competitive factors, technological development, market demand and the Company's ability to obtain new contracts and accurately estimate revenues, if any, due to variability in size, scope and duration of projects, and internal issues in the sponsoring client. Further information on potential factors that could affect the Company's financial results, can be found in the Company's various filings with the Securities and Exchange Commission (SEC).

Contact: Solar Wind Energy, Inc. 1997 Annapolis Exchange Parkway Suite 300 Annapolis, Maryland 21401 Phone: 410-972-4713 E-mail: Info@swetower.com

SOURCE: Solar Wind Energy Tower, Inc.

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