When trading OTCBB penny stocks, it’s obvious that what a company claims do, is irrelevant. On the other hand, when it comes to small-cap stocks, or and any other asset type for that matter, the truth is that we have to pay attention to a few more important factors. Although you should still treat any stocks like ticker symbols, rather than companies, it’s important to realize that earnings, FDA announcements, and buyout rumors, can have a major effect on stocks.<\/p>\n
You don’t want to get caught with your pants down because you didn’t realize a stock was going to release earnings, so you always should be aware of earnings releases in any stocks you are currently trading or considering. Yahoo has a useful earnings calendar that you can find here<\/a>. This is also important in the context of the overall market because, in this new market, really important or large companies can have a major impact on the overall market’s direction. Since the market is now controlled by the high-frequency algos, a stock can do basically anything, and therefore holding through earnings is most certainly a gamble. After hours and premarket trading is generally very thinly traded and therefore stocks can move a lot more than you think.<\/p>\n For example, just because a stock has positive earnings does not mean it will go up, and just because a stock misses its numbers, does not mean it will drop. Due to the market framework, market makers will always take the side of a trade which differs from what the majority of market participants are thinking. This is why a lot of times you will see a stock spike big on earnings and then the next day it is all the way back down. Therefore if the majority of people are looking to buy a stock, it’s best to take the opposite stance and wait for a reversal trade.<\/p>\n Another thing to watch out for is if you trade a biotech stock which has a pending FDA approval. The FDA provides a schedule for all companies, and while you may not know about early-stage decisions, you will usually know when a major decision will take place. Therefore, if you are trading biotech stocks, you want to be sure that you are aware of any potential market-moving FDA decisions. Keep in mind, a lot of crazy things can happen in the days or hours leading up to an FDA decision, so it’s best to keep your time frame very short in these situations.<\/p>\n Buyout rumors cannot be predicted, so you don’t have as much control over this factor, but you still want to be aware of them. When a company gets a buyout rumor, a stock will typically spike big. For this reason, it’s best to be careful and take the rumor seriously I don’t suggest buying off a rumor, but at the same time shorting a stock that has just spiked due to a rumor, is very dangerous. It’s best to sit back and wait for a little and see what effect the rumor has on stock. Since the market’s first reaction to a sudden move, is typically the wrong one, you don’t want to get caught trading with the herd.<\/p>\n Although paying attention to these factors does not guarantee you won’t lose, if you keep this stuff in mind, then you should avoid any foolish losses. Since risk management is a major part of successful trading this will be very helpful.<\/p>\n To begin profiting in penny stocks all you have to do is click here<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":" When trading OTCBB penny stocks, it’s obvious that what a company claims do, is irrelevant. On the other hand, when it comes to small-cap stocks, or and any other asset type for that matter, the truth is that we have to pay attention to a few more important factors. Although you should still treat any … <\/p>\n