so what are the pros and cons of trading penny stocks I get this question all the time there’s a lot of pros and there’s a lot of cons and you need to know them there’s pros and cons to trading anything first of all 90% of traders lose money so you have to understand that this is a very very tough game to master that doesn’t matter if it’s forex stocks options or penny stocks penny stocks I think are actually the easiest sector out of them all because they are the most simple that’s a pro where these companies have one or two products one or two technologies one or two major deals that’s it so when they announce a big deal it’s actually really meaningful so the stock can run for several days as opposed to a bigger company like Amazon if they sign some new deal the stock it doesn’t matter and you’re trying to guess what is you know this deal really mean what are the implications how positive or negative is this deal penny stocks if they sign the deal especially with a big company it is a massive massive massive positive so you can buy the stock and hold it for days or even weeks you don’t have to try to predict the news ahead of time another Pro with penny stocks is that because they’re very low price they’re very affordable this is why I got into penny stocks I started with just a few thousand dollars my top students started with fifteen hundred of his own money now turned into nearly six million dollars so I don’t know how many tens of thousands of percent gains that is but that’s impossible to do with bigger companies another Pro I just that not that much competition you know because penny stocks are so looked down upon by society and Wall Street there’s no big hedge funds trading these things you’re not competing against algorithmic trading or anybody to smart you know I’m not that smart I’m not that good at math so you don’t have to be that smart you don’t have to be that great at math so frankly it’s easier a con that goes along with that is that because it’s easier because there’s not much money to be made guess what that’s limiting like you can’t expect to make a billion dollars trading penny stocks there’s a reason why none of the smartest people trade penny stocks is because they want a billion dollars the billion dollar hedge funds trade bigger stocks forex markets more liquid markets like that because that’s where the big money is so you have to understand the limitations with penny stocks the good news that brings me back to another Pro you don’t need more than a few million dollars in your life I know several billionaires they are so so so miserable having a few million dollars really in life I think is all you need you’re not like in a prison of money you can live damn well if you’ve followed me on social media at all you can see my Instagram pictures and YouTube videos and you know I’m living the life and I just have a few million dollars to my name that’s okay I’m never gonna be a billionaire if I do make a billion dollars teaching because I do make money from teaching guess what I’m gonna donate it I’m never gonna be a billionaire and that’s fine so you have to come to grips with the scalability issues another con is that there’s liquidity issues you can’t take like a hundred thousand dollar position like that in any penny stock sometimes it takes a few seconds or a few minutes to get executed because these are small companies there’s not as much trading volume so you have to think about all of this before you risk your hard earned money that’s not to say that you can’t invest a hundred thousand dollars in one penny stock I have before I’ve made a hundred thousand dollars in one penny stock but it takes a little more time to get executed I would say stick with the most actively traded penny stocks – there’s so many thousands of penny stocks this is a pro-ana con where every company says that they have the next big thing most of them are lying a pro is that it’s very predictable you know pretty much every single company will fail so you kind of know how the story ends but it’s also a con in the big sense of the word con where there’s a lot of scams you can’t trust anybody in penny stocks so if you’re talking with like some director at Amazon they’re a pretty reputable person they have legitimacy almost no penny stocks has legitimacy so for me I always like to think that they’re all guilty they’re all gonna fail they’re all junk you know they’re all scams and that way I’m never disappointed they can never let me down if I think the worst of them I know that’s kind of a cynical way to think but that’s how you have to think in this kind of gutter of the stock market that’s another kind no matter how much money you make in penny stocks you’re never gonna get any respect you’re gonna be like Rodney Dangerfield you know Wall Street will look down on you your parents will look down on you friends will look down on you they’ll think that you’re a stamp just because you’re making money in penny stocks even if you try to explain it that you’re doing everything legally and that you know there are some good companies it doesn’t matter the world hates penny stocks so be prepared to be hated the good news this is also a pro because the whole world hates on penny stocks that therein lies the opportunity there’s not much competition everybody who hates on them stays away so you pretty much competing against people who just buy penny stocks thinking that they’re gonna be the next Microsoft if you can be even a little meticulous if you can even be a little studious of the patterns you can you know just go in and out of stocks around these idiots who are slower-moving not meticulous not thinking type investors so these are just a few pros and cons leave a comment if you have any more questions underneath this video I’m taking questions I like answering them all but I also want to teach the pros and the cons I want to be as real as possible so that you understand that guess what you could become my next millionaire student just below this video I’m going to include a link that you need to click and you apply to be my next millionaire student in my millionaire Challenge program I will mentor you I will teach you a lot more than just the pros and cons I’ll teach you the ins and outs so let me know if you want that hey Tim Seitz millionaire mentor and trader thank you for watching my videos I hope that they helped you I want to share everything that I’ve learned over the years you can check out more videos right over there and also click subscribe so that you can watch all of these videos get that knowledge and become my next millionaire student
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0:05 A lot of people ask me: what are the pros and cons of day trading penny stocks? There are a lot of pros and a lot of cons, and you need to know all of them.
0:15 Ninety percent of traders lose money in the stock market. You have to understand that this is a very tough game to master.
1:05 One pro is that because penny stocks are priced very low, they are affordable.
1:30 Another pro: there is not that much competition because penny stocks are commonly looked down upon by just about everyone.
1:55 A con that goes along with that is that there’s not that much money to be made when you’re trading penny stocks.
2:30 That brings me to another pro: you don’t need more than a few million dollars in your life. I know billionaires who are miserable. You just don’t need that much money.
2:50 I’m never going to be a billionaire, and that’s fine. I’m ok with it.
3:00 Another con is that there are liquidity issues. You can’t take a $100,000 position immediately in any penny stock.
3:40 A pro and a con is that every company says they have the next big thing. You have to be aware of the scams.
4:15 I like to think of all penny stocks as though they are all scams.
4:30 Another con: you’re never going to get any respect. Everyone will look down on you because they think you’re a scam because you are investing in penny stocks.
5:00 It’s also a con that people look down on you because that means less competition.
5:30 I want to teach you the pros and cons of trading penny stocks.
If you want to learn how to day trade, apply to be my next millionaire student here: https://www.timothysykes.com/millionaire-challenge/