Recently Matt has been venturing into the area of “oversold” stocks.  What he calls his “MM Trade Ideas.”  He makes sure these picks are very liquid, meaning they are easy to sell.   His goal is to make at least a 10% return on these picks.  The catch is that you need to use a lot of capital to make that percentage on these picks.  And, these stocks are usually stocks that have reacted to bad news.

In the last week or two Matt has played 3 stocks, for his members, that were all winners.  They were not pink sheet/otcbb picks.  It took 3 trading days or less for them to become winning trades.  They were:

MWA Chart (Aug 12 alert, Aug 16 exit)

COCO Chart (Aug 16 late afternoon alert, exit 2 days later)

BPI Chart (Aug 17 late afternoon alert, exit 1 day later)

Matt alerted his members to the fact that BPI (for profit college) might be a long term hold since they passed Obama’s student loan repayment threshold.

With this new trading strategy you need to have at least $3000 in your trading account.  You should be prepared to  be content with  only getting a 10% return in a few days of trading.  I  say be prepared to be content because a lot of microcap traders are hooked on the thrill of much larger returns in less time.   But it’s always healthier to diversify your trading and this is just another way of doing things that makes microcap millionaires the best penny stock picking service out there.  Diversification.

If you want a higher return and don’t have that much in your account to trade the MM Trade Ideas then you can just stick with Microcap Millionaires regular penny stock trading picks.

The reason you MUST trade or scalp a penny stock is because they are very volatile. You’ve got to make sure you get in and out with your capital in shape. If you hold onto these stocks the chances are pretty good that you will lose. Big time. In order to know when to get in and get out you must limit your losses by coming up with a manageable system. Even if you trade all day for a living you don’t want to be stuck in front of your computer. With a manageable system, that you stick with, you can enter and exit trades without having to be sitting there manually trading.

So if you find a penny stock that looks like it has potential to make some money for you then designate a point where you should buy it. Then set your trade to exit at a profit point. And of course you must set your account to sell if the stock drops to a certain point. Limit your risk as much as possible. It’s very easy to do. By setting a pre-determined range for taking profits or selling to cut your losses you free yourself from the emotions associated with trading these types of stocks.

So you see you should never get into trading penny stocks thinking you will invest for 2010 and make money a year from now. If you have the investors mindset then do not buy penny stocks. Invest in blue chips instead. You can hold those for a long time and maybe make money, it won’t be as much as you would make if you trade penny stocks but it will be a stressless way, although slow, to make money.

Because the nature of trading penny stocks is so fast paced it is the reason most people use a penny stock newsletter service. These services give the buy and sell signals for you. So all you have to do is set it and forget it. They give the manageable plan that you can use and then go about the business of living.

I have learned from some of the members of Microcap Millionaires that you really can make a fortune in penny stocks. And, some people really have become penny stock millionaires.   But you won’t make a fortune buying one or two penny stocks and then holding on to them until the company becomes the “next big thing.”  No, you make money, lots of money for some folks, by trading lots of penny stocks very quickly.

So to do this type of trading you really have to have guts.  You have to take all your emotions out of the trade.  It is so easy to think, “WOW I just made a 25% return, let me hold on to this stock and see if I can turn it into a 100% gain.”  Thinking like that will get you slaughtered….like a pig.   So keep that in mind when trading penny stocks.   Take your profits.  Get in and get out while you are ahead and then move on to the next stock.   Maybe that stock will go to 50 or 100 percent but you have no way of knowing that.  Take the money and live to trade another day.

You don’t “buy and hold” ; you “trade” your way to becoming a penny stock millionaire.

Using about $4500 for the trade you could have made around a quick $600.  Now that is not the kind of bazillion percent gain that paid pumpers probably claimed you would make if you followed them (you know, the kind they fill up your inbox with).  But this was a good solid, honest gain that quickly took advantage of the overall bearish conditions of the stock market.

If you are the type of trader that has never shorted a stock that’s O.K.   Matt Morris always lays out the instructions on how to complete the trade.   He always assumes that you don’t know anything about trading.   And even though you might know a lot, it is a bonus that he doesn’t assume that you do.  Because even if you are experienced you can sometimes have lapses in attention or have a bad day and it’s nice to know that there is someone there keeping you straight and looking out for your best trading interests.

There are a lot of members in Microcap Millionaires that are not experienced.  So if that sounds like you then MM is a good place for you to be to make money in the stock market.

Most of the trades are short term picks so you cash in on those short term momentum swings.   Not all of them will be shorts though.  And not all of them will be quick trades.  After the SCSS trade Matt came up with a stock trade that had a nice 50% jump but it took a few days.

If you want to get in on Matt’s MM trade Idea visit his site for micro caps and also get three free trades.

SCSS chart for the day this trade took place.

Did I mention that you can test Matt’s Microcap Millionaires subscription to his newsletter stock alerts with his offer for 3 Free Picks?

Oh, and because life is rather full and I too am a busy person, I don’t stay glued in front of this website.  If you have a comment or question that has not been addressed within the main pages of my website, feel free to comment on.  Please, though, keep on topic.

FYI: To those who love to SPAM…I have control here to keep such posts to a bare minimum. So don’t waste your time. Or mine. Pretty please.

And with that, my first post, I welcome you to read through Matt Morris’ very long yet thorough sales letter pitch about investing penny stocks with his Microcap Millionaires penny stock finder service.

Anyone care to share their penny stock trading experiences?

Michele  Boston