The Forex and penny stock markets are the dangling carrots for the small trader. Both require only a minimal capital size to open an account. Otherwise they are different like night and day. Forex has only slowly moving prices and a few currencies to trade. Penny stocks offer the absolute opposite, breath taking gaps over night and steep trends, even intraday. The penny stock markets are also huge, meaning there are many stocks to choose.
So, why bother with Forex? The most likely reason for people to try Forex and shun penny stocks is the fraud that is surrounding this market. Perhaps another reason is that Forex robots offer conveniently looking automated trading signals . Both reasons are misleading…
The name of the penny stock fraud game is pump and dump. Buy a stock, tout it through various channels and sell in the rising price. This behavior is obvious and everyone knows it.
In Forex fraud is more hidden, but it is there. It is the spread that kills small traders over time. There is a cruel machine working against the Forex speculator. You always have to pay the spread, which at times widens, but there is hardly a real chance to gain something. The latter may be hard to believe, but Forex is mostly random driven.
Forex has no real trends and no real anticyclical swinging of its currencies. Regularity is overshadowed by much stronger random influences. The result is a mostly chaotic price movement. In the moment it becomes coherent, when news hit the wires, the spread widens abysmally. In a direct comparison of the best Forex robot vs penny stocks, the robot will have severe difficulties with just keeping his head above the water of the random sea called Forex.
There is also fraud in the markets of large stocks. It is just even more concealed than in Forex. Professionals have insider information, are front-running you, produce news for you they know beforehand, ignite breakouts that become breakdowns due to their unloading of a position and so on.
The conclusion is astonishingly that you can live with the fraud in the penny stock markets . Prices do there what they ought to do. They go up and down and so this market can be traded.
Just adhere to the rule that the historic high of a penny stock should be much higher than the current price. In that case the stock has potential, in principal. For a better timing and selection of trading candidates a newsletter is a good idea.
Honesty beats anything else here! The writer doesn’t need to be a genius, or has to have a huge staff of employees for analyzing the market. After all, it is still speculation. You bet on recovering prices of a stock that has already shown that it is able to reach higher altitudes and that it is able to draw investor attraction.
All you need is a penny stock letter discovering interesting situations and a little money management on your side. Try it and you may ask yourself why you let your Forex robot torture you for so long!