A penny stock is a stock that is traded for less than $1 per share. It is also a term often used when stocks are traded for less than $5 per share. Such stocks are usually those of small cap companies (but it does not mean that these companies only deal in penny stock). In fact they are worth a few million dollars in net tangible assets. In this article we will look at one or two penny stock trading systems that you may wish to consider using if you decide to starting investing in these types of shares.

One such system is known as TradingPRO. It has been specially designed to day trade the market indexes or correlated products such as futures indexes, e-minies contracts, options as well as the cash market. This is because it gives you easy to follow trading signals.

Another such system is known as "The Penny Stock Trading System" which has been written specifically for the novice investor. It is still good enough for the more experienced investor to use also. It provides you with strategies that only the more experienced traders know about. Many of the strategies provided in this system have been collected first hand from those with experience along with the collective experience of various experienced penny stock investors. Instead of being taught about "buying low and selling high" they teach you substantive strategies which are extremely effective when carried out correctly. Not only this but this method consists of many small steps which when followed correctly will lead to successful investment in Penny Stocks.

However, today many people who have become online traders find that it is more profitable if they use the services of an online broker. Not only will they manage the accounts for them more effectively they will often charge the person a small fee in order to do it for them. These online penny stock brokers will have all the latest (updated) and relevant knowledge relating to the moods of investors and the movements of the market. They are able to accurately and successfully advise their clients which are the best and most profitable penny stocks for investment.

Why Hollywood never made a movie about this guy, I'll never know. I'd buy a ticket. Talk about rags-to-riches!

A young kid leaves the family farm, mom secretly gives him some traveling money (God bless moms), because he believes there's got to be more to life. Nothing unusual about that, many young people leave small towns or farms for the same reason. Some make it, some don't.

Hitching a ride on a wagon, young Livermore arrives in Boston and, by chance, stops in front of a Paine Webber brokerage office. Livermore wanders inside. It's love at first sight.

It just so happens the brokerage firm needs a "board monkey" to post prices for the customers. Livermore jumps at the chance. So, within hours of leaving the farm, young Jesse has a job, rents a room, and becomes his own man before the age of 15.

His mathematical brain sets to work immediately as the customers yell out quotes in an endless stream from the ticker tape. Before long, Livermore challenges the crowd to yell out the quotes faster. With chalk in hand, brain in high gear, concentration focused, he writes down the numbers faster than the crowd can yell them. Livermore's alive with the challenge.

But Livermore's not just writing down numbers. He's in sync with them, in harmony with them. He soon notices recurring patterns. He keeps a notebook.

He's also sensitive to the crowd. As numbers change and stocks move up and down, so too does the mood of the crowd.

As a stock's volume increases, the excitement level increases. He feels the electricity in the air. He sees their eyes light up as the price increases along with their increased trading. He notices how their personalities change as they spot opportunities to make money (that's called greed).

All of a sudden, the price rolls over and falls - the crowd becomes quiet, sullen, apprehensive (that's called fear).

He notices how the traders talk among themselves, buoying each others confidence, reassuring themselves (that's called denial). Livermore also notices how often their wrong.

Over time, Livermore figures out that it doesn't matter what people say that counts - it only matters what the tape says that counts! Don't waste time trying to figure out why things are happening, only pay attention to what is happening. By the time the reason why becomes known, it will be too late - the move will be over.

This becomes the foundation of his trading system. People such as economists and fundamentalists, who are always trying to figure out the why of something before they make a move, have a hard time accepting this conceptual approach.

Jesse Livermore first tries out his theories in the local "bucket shops" which are stock market betting parlors of the day. He wins so much money that, eventually, they refuse to take his bets.

Barred from the bucket shops, he moves into the real stock market losing at first, until he figures out how to overcome the effect of the time lag between when the order is entered and, unlike the bucket shops, when the order is actually filled.

Nor does Jesse Livermore limit his trading to stocks. He also trades commodities where he accomplishes such feats as cornering entire commodity markets such as cotton and coffee. When asked why, he replies, "Just to see if it could be done." When the President of the United States, on behalf of the commodity exchanges involved, asks what it would take for him to unwind his positions, he replies, "Mr. President, all you have to do is ask."

He makes $3 million dollars in a single day by going short in the crash of 1907. Just to grasp the magnitude of such a trade, by comparison, remember that we're talking about the purchasing power of 1907 dollars. The dollar went a lot further then than it does today, 2007, a hundred years later.

Jesse Livermore doesn't always win. He goes bankrupt more than once. Whenever he invests in private business he always loses every cent. He always manages to find backers that stake him on condition that he engage in the only business in which he is truly expert: the stock market.

He never talks about his trades, before or after.

Because people follow his every move, Livermore masks his moves in complete secrecy. He moves his offices uptown to get away from the crowd and to maintain privacy. He is forced to use as many as 50 brokers at a time in putting on and taking off positions so that no one is able to see the whole picture of his trading activity. Sometimes purposefully losing money just to shake off followers. Each broker sees only a small piece of the puzzle. Everyone is on a strictly "need to know" basis.

His most spectacular coup comes when he, correctly calling the top of the market, puts on massive short positions netting him over $100 million dollars in a single day during the crash of 1929, just as the nation was entering the Great Depression.

People blame him for causing the crash, but it isn't true. Unlike others, Jesse Livermore simply observes what is happening, never mind the why, and follows what he describes as the market's "line of least resistance", by going short.

Eleven years later, in November 1940, Jesse Livermore commits suicide by gun shot. No one knows why. He leaves no note. Some suggest he was losing his touch. Others wonder if the pressure of being blamed for the 1929 crash was too much for him to bear. Who knows?

If Hollywood made such a movie, who wouldn't want to see it?

Taking a look at the past week with all its ups and mostly downs, I am still wondering what was all the fuss about? And are we going to see more of the same next week?

As we all know by past experience “Every time the Dow sneezes the ASX catches a cold, sulks and then takes a few days then to recover.

Now a interesting fact has emerged that you might not be aware of is that in the Chinese share market, which is full of domestic investors (only 47, yes 47 foreign investors are authorized to invest directly in the Chinese market),

Now how that shook the bigger, deeper and supposedly more sophisticated markets in Europe, Australia, Japan and especially the US. Is what I can not work out?

The only reason that makes any sense to me is, we know the Chinese Economy has been merrily galloping along and increasing on a yearly basis at around the 10% mark. This has been going on for a while so just perhaps stocks have become a tad overvalued and there had to be a price correction.

I am not an economist just a poor share trader so what do I know?

But one thing that I do know is,”I Love Downturns.”

And as I have said before it is time to look out for quality stock which you can buy at bargain prices. And that is exactly what I did. I snaffled up a few more Oxiana (OXR) actually cheaper than the first lot I had purchased which of course lowered the average price I originally paid.

This is called dollar averaging. This occurs when have bought several lots of the same stock over a period of time at different prices i.e.

1,000 shares at $1.00, 1,000 shares at $1.50, and 1000 shares at $2.00 this averages out 2,000 shares at an average price of $ 1.50 each

All you do is divide the total of the shares in this case 3,000 by the total amount you paid which is $4.50 the answer is $ 1.50

Here endeth the math’s lesson, Time to put the feet up and wonder what the market will will be doing next week.

Finding your very own unique commodity trading edge is a worthwhile goal. Without one you are lost in the masses, struggling to push your head above the sea of expenses. Trading edges do exist, though for short periods of time. Psychological edges are more permanent. You need many. Read on to find how to go about finding yours.

It’s breathtaking to watch a certain trading method working well and then see the market find a way to destroy these same participants in one sharp move. An example is when commodity option traders are writing (selling) options over an extended period of time. They’re taking in premiums like fat cats. Happy. Quiet market. The percentages can be upwards of 90% accuracy selling way out-of-the-money futures options in a dull or choppy market. The profits are small, but consistent.

Then the day of reckoning arrives and a move way out of the standard deviation spikes like a lightning bolt. They drag some option writers out by their boots. A well known example was in 1998 when a famous money manager was selling thousands of out-of-the-money S&P 500 puts. The market took a free fall dive. He lost a big chunk of his $100 million+ managed commodity fund in a few days. I remember it well because a partner and I were long an eighty-lot of put options on the other side of his trade. We made the biggest score of our lives. But it had much to do with luck and being there at the right time. It happens at least once to everyone. Heck, just being born is the longest shot going.

Right now I love the S&P 500 futures contract (e-mini) day-trading game. I’ve traded it actively for the last twelve years. It pays to focus on one or two commodity futures markets and learn it well. This is the key to getting an edge when day-trading. Some day-traders can spread themselves out and apply similar techniques to many commodity markets. God bless them. But I find I need to learn all the patterns, habits, and idiosyncrasies of one market to be competitive. Just like doctors who specialize.

Can you imagine a heart surgeon trying brain surgery, or even doing plastic surgery? It’s the same with markets. The more you focus and specialize, the better job you can do competing against the best minds in the commodity world out there. I have some methods I will suggest in later articles to focus and better learn your favorite futures market. This doesn't mean you can't hold long-term positions of other commodities while day trading. You can do both, but for day trading itself, you should focus on only one or two markets.

As I’ve said before, it's so important to train your brain to intuitively and subconsciously identify likely turning points as they occur. With practice, you will find signals going off in your body. It’s different for everyone. Your body will let you know when it’s time to put on or take off a commodity trade. But, it takes training and looking at the right indications with a trained mind. More to come in future articles.

Good Trading!

There is substantial risk of loss trading futures and options and may not be suitable for all types of investors. Only risk capital should be used.

Finding your very own unique commodity trading edge is a worthwhile goal. Without one you are lost in the masses, struggling to push your head above the sea of expenses. Trading edges do exist, though for short periods of time. Psychological edges are more permanent. You need many. Read on to find how to go about finding yours.

When talking about trading, I cringe when I hear the word, "system." It reeks of computer optimization - optimized mush, no flexibility. A better term is trading "method." A commodity trading method is something that is less rigid and has general rules that can be bent. We need to know when to bend the rules. This brings a method out of the mediocre class into one that has an edge - a human edge.

The best commodity futures and option traders in the world are usually discretionary types verses strict rule based optimization systems people. There are exceptions. To be a 100% intuitive, method trader is a tough row to hoe, agreed, but allows dynamic change to market conditions in a heartbeat.

So, where do we find our trading edge? Is it in the latest software, book, mentor, webinar, or maybe right here? It can be found everywhere, pieces here, pieces there, but mostly, the edge is within you. Sounds mystical, but it’s the truth. You have to spend the time to develop your OWN unique edge that the majority do not have. And yours will change over time.

For example, at one point back in the late 60’s and early 70’s, few commodity futures traders had use of computers. It was found that even a simple exponential moving average worked well for the smooth trending markets of the era. Moving average commodity traders did well since the markets were trending nicely. As more traders caught on, the successful trending systems began to get diced. You will notice that many of the new and emerging foreign markets start out with smooth trends until they mature and then start the chop cycle as change moves in. It’s all part of the never-ending evolutionary commodity trading game and marketplace.

There are some effective, but simple, long-term trending methods out there. Almost any method will work at one time or another. The broadest, loosest trading methods will last the longest, while the most optimized last the shortest time. The famous “Turtles” used a break-out of the 40-day moving average for many years.

They added a filter called “n.” Two losers in a row = -2n. Two winners = +2n. A winner and loser = 0n. The more losing trades in a row, the more frustrated the masses and the more likely the next trade will be a winner. That is, if the break-out came three times in a row with a resulting false move and a stop out, (-3n) then the fourth signal will be more probable for success. Sometimes.

The commodity futures markets follow this general rule: They will bless some methods for a while, then turn in a heartbeat and take it all away. A good trader is always watching several methods at one time and will switch to the one currently performing...in a heartbeat!

Part Three of Three Parts - Next!

There is substantial risk of loss trading futures and options and may not be suitable for all types of investors. Only risk capital should be used.

As I believe there is money to be found in all sectors, regardless of the events taking place in the economy, I focus today's article on the technology sector, closing in on the wireless communications industry. With technology expected to perform quite nicely in 2007, despite the recent correction of worldwide stocks, I see companies, especially those that have interests abroad, to contain the necessary potential to help out investors. As the wireless industry is loaded with large capitalization stocks such as Vodafone and China Mobil Limited, I have actually researched and found an excellent large-cap stock of 78 billion dollars in America Movil S.A.B de C.V (AMX) to contain both the fundamental and technical qualities of becoming an excellent asset for your portfolio.

Before heading into the subject of America Movil's figures and charts, I always believe the most important component to look for in a company is exactly what kind of business it produces. Researching on Reuter's I have discovered that America Movil "is a provider of wireless communications services in Latin America." While the language may seem a bit rudimentary, the key phrase I found in this assessment is the availability of communication services in Latin America. Providing access in over 14 countries south of the United States border, there is going to be significant opportunities in countries like Mexico, Colombia, and Brazil. As these nations continue to develop, there is tremendous growth potential in terms of new institutional and retail users of communication devices such as a cell phone. In addition, with the added businesses of Smartcom and Verizon and AMX holdings in these various companies, America Movil will only take a greater concentration ratio of this market—allowing for high costs to its users, transcending into higher revenue and profit figures. Now while this scenario sounds brilliant, an argument may be made that without a growing economy in these Latin American nations, there will be no profit for America Movil. While such a consideration is absolutely true, looking at the five year charts of both Mexico and Brazil, two of the most populated nations American Movil serves, despite a few hiccups, growth has been amazing for these major indices, with little in the way to abate this optimism. Furthermore, more specifically to Mexico, with a new government spending more on infrastructure and resources, trying to improve human capital, in the next ten to twenty years or so, there will be an absolutely different perspective on how Mexico is perceived in an economic manner. Thus, because of a large populations and growing economies, there is tremendous potential for America Movil to perform quite nicely as a long term investment.

Now, while this plan may seem ideal in theory, in order for a company to even have a chance to perform at respectable rates in the future, a business must already have strong fundamentals it can evolve from. Nevertheless, to hold optimism in the ears of shareholders of this company, there is a definite base of strong figures, which I believe can only rise, in dramatic fashion, over the next few years. Relative to the top line, over the last year, America Movil has had revenue of nearly 21 billion dollars according to Capital IQ. That number has transcended over to its shares, as its revenue per share value of 11.7 beats out competitors such as Vivo Participacoes who is now at about 3.6. In addition, revenue growth over a quarterly basis has also remained solid with an over 20% performance compared to other wireless rivals such as Rural Cellular (0.36%) and Telemig Celular Participacoes (4.30%). Such growth for America Movil has helped many analysts on Wall Street reconfigure their growth estimate for this company, as over the next five years, researchers determined that growth will be so high for this company that it's PEG of 0.44 will easily beat out competitors like NII Holdings (0.72), and Telemig Celular (6.63). However, while these figures may be nice to look at for potential shareholders of this company, some pessimism may be placed with the pact that earnings have had negative growth on a quarterly level over the past year. While this is an excellent observation, it is also important that much cost went into the investments of the recent acquirements of the various companies I listed earlier, and over time, as economies of scale are created, the negative 26.30% quarterly earnings decline will reverse. In the meantime, free cash flow, although not available from Capital IQ, remains high from my calculations, and an investor should look at more of the other positives American Movil has to offer. One of the areas which really look impressive for this company is the current projected P/E ratio. Even though, over the past twelve months, earnings have not been tremendously strong for this company, the earnings multiple for the next twelve months is signaling a decline from about 20 to 11. With a industry multiple average of around 25 and having competitors such as Telemig Celular (12.85), Nll Holdings (18.24), and Vivo Participacoes (N/A because of a negative EPS) not completely up to par with American Movil in this regard, one of the most important components for fundamental analysis proves to add on to the optimism I have reserved for this company. In addition, while other multiple ratios such as P/S (3.72), EV/R (4.01), and EV/Cash (11.9) may be a bit high for this company, this is a result of a much higher market capitalization which has been inflated by debt, triggering a much higher than liked enterprise value to its respective competitors. There may also be some concern over a low current ratio (0.9) and the problem of insolvency. However, once again, these extra debt and liabilities can be traced back to the multiple acquisitions this company has had over the past two years, and over time, once the debt is paid off, with higher earnings, revenue, and cash, these numbers should correctly align themselves with the numbers of America Movil's competitors. The question that may be asked, however, is if the management team of this company will be able to produce the necessarily means to continue to evolve its strong financial base. From the research provided, there should be no disgruntled emotions placed to CEO Daniel Hajj Aboumrad and his staff which, over the past year, has managed to produce an ROE of over 44%, a return on assets of 13%, and an ROI of nearly 26%. Compare these numbers respectively to the industry average of 10%, 3%, and 4% or with America Movil's competitor Vivo Participacoes's respective numbers of -14%, -9%, and -13%, and there is definite evidence that this company is taking advantage of the equity it spits out. Thus, after going through what the management can do, and how America Movil stacks among its competitors, there is really no reason not to at least think of this company.

Now while the fundamentals may look appealing, there may be some misplaced pessimism concerning the current US economy and how America Movil will fit that structure. With the recent freefall of stocks over the past week, because America Movil has a strongly correlated beta of 2.5, there may be some hesitation investing in this company if the S&P 500 is looking like it will decline more and more this year. However, while such may be this case, historically the S&P and other broader indexes have faired well during the year prior to an election, and with a still solid economy, there should not be too much emphasis placed on the recent trend of events—especially since America Movil is not involved with China. In addition, America Movil is still trading below is 50 day SMA, has a fairly high short ratio of 2.5, and has a strong dividend payoff, which cannot be said of all technology companies. Thus, if worries still plague your thoughts that the US economy is entering a depression, remember that this company is more specific to the foreign markets as a long term purchase instead of the presumed short term buy.

Catching a stock as it becomes more and more popular is similar to catching the right wave when surfing – but it’s equally satisfying. The essence in both cases is identifying well in advance which waves are worth riding on.

How can you pick potential winners from an ocean of mediocre stocks? One helpful tool is to watch for upgrades by investment companies like JP Morgan, Merrill Lynch etc. There’s a reason why these companies are so profitable. These companies don’t just buy equity. They scrutinize stocks, companies and sectors all day long. They know the in’s and out’s of the market and are very aware of investor psychology.

Another way could be looking at recent upgrades awarded by investment newsletters. That's because the editors of these newsletters have proven to also be incredibly sensitive to subtle shifts in investor psychology about particular market sectors and specific stocks.

So it's worth paying attention whenever a stock quickly rises in popularity among investment companies and newsletters.

If you are uncertain, paper trade upgrades for a while to see for yourself. But also be aware of which companies are being upgraded. Most are only suitable for short-term investments because of the volatility of certain companies and sectors.

For example, the automobile sector is extremely sensitive and volatile. Take a look at Ford (ticker symbol F) to name just one of many. This chart look’s like everything else but definitely not stable. This is because automobile companies depend too much on sensitive factors like oil prices, the overall economy etc. etc.

“But so do other companies” you might argue. Yes! Correct! But my point is, when times are bad who do you thing will still profit? Ford or Wall Mart? We all gotta eat, but we don’t necessarily need a new car tomorrow. A lot of us need or even depend on medicine. In good and in bad times. So who do you think will be ahead in the game? Pfizer or Delta Airlines? Now that’s another extremely sensitive and volatile sector. The aviation industry. Not my cup of tea!

So, if you see and catch a potential upgrade, ride the wave for as long as you feel comfortable and as long as the trend is moving in your direction, but always be ready to jump off again protecting your investment and profits!

Yours in Successful Trading,

A stock is a legal symbol of ownership in a business. When you buy stock, you are actually buying part-ownership of the business. In other words, you become a shareholder. A business will typically spread ownership to hundreds or even thousands of shareholders. Shares are sold when the company wishes to get cash. In a small business, it may be said that the owner has 100% of all shares. However, when a business grows beyond a certain size, it may require capital for expansion and selling shares is the easiest way to do that.

Most stock holders do not really have much say in how the business is run because their ownership proportion is negligible. In order to make a difference, you must own lots of shares or you must work with several smaller shareholders. Now days, buying stock has become more of an investment rather than trying to run the business. You simply buy stock and wait for the company to grow. This will appreciate the stock value and you make money by selling it. Or you could simply make do with the percentage of profits the company gives you based on your shares.

The stock exchange is the place where people trade stocks. The three important share markets in the United States are the New York Stock Exchange, the American Stock Exchange, and Nasdaq. Stocks are bought and sold through stock brokers or Direct Investment and Dividend Reinvestment Plans. The plans allow you to purchase the stock directly from the companies instead of the market.

Wall Street is a famous and important place when it comes to the American stock market. The street is named after the high fence built by the Dutch settlers in New York during the 17th century. Though the fence lasted till 1685, the street next to it was permanently named Wall Street. The history of the American stock exchange begins in Philadelphia. The first stock exchange was built here in 1770. Two years later, the first New York stock exchange was opened, though it was less successful. In 1817, New York stock exchange representatives traveled to Philadelphia to understand why it was more active.

This created a more disciplined and formal New York Stock and Exchange Board. Another important point in this history is the crash of 1929. This crash triggered the Great Depression.

The stock market is an untamed animal, a wild beast. Sometimes, it is a raging bull that lifts and throws all stocks upwards into the sky. Sometimes it is a marauding bear that beats all stocks into the ground with brute force. And if you are entering the stock market, you have to ride this beast. It can be a rough ride or it can be smooth one depending on how you handle yourself. But, hey, you can take your precautions and plan your investments well if you keep these five factors in mind:

1. There is always a limit: Every player on the stock market must not play beyond his means. The bottom line is that if you play beyond your financial capacity, and something goes wrong, you will end up with a loss of face and your family will feel the aftershocks. It's better to control risk appetites and adventurism while playing the stock market – after all, it is a market, not a jungle that needs to be explored.

2. There is no room for emotions: Never ever get emotionally attached to any stock. Stocks are an asset class and you must look at them as such. If you don't, and you keep holding a stock no matter what, then you will lose out on many opportunities to make money.

3. Book profits, stop losses: Profit is like a burglar – if you don't catch it, it will run away. Loss is like an insurance salesman – if you don't shake it off, it will stick to you. Therefore, you must always book profits and cut losses in the stock market – all the big guns have done it and they're human beings, just like you. So, why shouldn't you? Get the point?

4. No one can time the market: You have to be God to predict the market movements, which you aren't. So, be happy when you get in, be happy when you get out, don't regret, don't fret and SMILE no matter what you do, provided you do it right.

5. It pays to know: It will pay you well if you understand the stock you are buying into. What are its finances? Is it making profits or losses? Is the market price right? Is the management clean or are they sons of Enron? Does the industry have a bright future? Look, you will make a load of money if you know what you are doing in the stock market. So, get savvy with figures and with the economic and global trends. Analyze all the factors affecting a stock and then act.

Well, these are some basics you have to understand before you enter the stock market. Obviously, you will make mistakes, but that's normal – every stock market player does. Just take care to play the market by the book and that will ensure that you will ride on the booms and weather the busts.

Number one: don't stop reading. Too many investors see these common failures and simply brush past them, thinking "How could I possibly fall into the category of the average investor? I'm smarter than all of this; I can't be subject to these kinds of mistakes..."

...WRONG

More investments go sour from these different 'mistakes' than any other obstacle you'll face in your investing career. So please, do yourself a favor and keep reading. And keep an open mind too.

Number two is fear. There are two ends to the spectrum here so you have to find a middle ground. The most common is being afraid of cutting your losses. Don't stay in simply hoping it will get better, or you'll dig yourself a much deeper hole. What's worse is being afraid to make any mistakes at all. This has kept many of us from jumping into a sound investment. Just keep in mind that you won't be able to win if you're not even playing the game.

The second half of this is not fearing anything. Having that little voice of reason in your head can keep you from throwing away a lot of money. If this sounds like you, you're cure is risk management. Take the necessary precautions to set explicit limits as to when you get out of any investment, no matter the outcome. Follow the rules you set for yourself to keep your investing safe.

Next on the list: ignorance. I can't believe how eager people are to jump into the system and try to start making money without learning the game. You need to have a passion for learning everything in the market. By studying what you're up against and becoming knowledgeable about what you're doing specifically you'll have a far greater advantage than any other trader.

The big step: figure out what you do and don't know. It's harder than it sounds but by doing so you'll give yourself an honest approach to making yourself better.

Finally we come down to an investor's greatest enemy: greed. People are gullible...YOU are gullible. Too many people get sucked into the "miracle investment" that promises the amazing returns while hiding the major risks. Do your homework. If you take care of your professional ignorance above, greed should never get the best of you.

It's your money we're talking about here. You should be able to look at each investment objectively to ensure your financial safety. Armed with these easy techniques you'll be able to become a major player in the world of investing in no time.