Telling unprepared traders about my top penny stocks to watch can be dangerous…
If you’re lazy, want hot stock picks or are interested in get rich quick schemes, please unfollow me right now as we will not get along & there’s a strong chance I come down hard on you when you try to spread your BS anywhere around me or my students so save me the hassle please!
— Timothy Sykes (@timothysykes) August 2, 2020
That’s why this list of penny stocks comes with a warning:
If you don’t work on your trading education first, you WILL lose money.
What does that mean? I’ll get to that. First, let me tell you what I’m watching.
Top 3 Penny Stocks to Watch August 2022
The past few months have been rocky…
But lately we’ve seen signs that the market’s in recovery.
The S&P 500 is one of the most widely-followed stock indices out there. It’s fallen steadily from all-time highs in December 2021…
Since mid-June, it’s up over 10%. Here’s the SPDR S&P 500 ETF Trust (NYSEARCA: SPY) which tracks the S&P:
I also made my two biggest trades of the year in this period. Both were sub-$1, ‘true’ penny stocks. When the market has volume, these stocks can really run.
On June 27, I traded Evofem Biosciences Inc. (NASDAQ: EVFM) for a $3,870 profit (on a starting stake of $5,880).
Here’s my trade breakdown:
Two weeks later I traded Emergent Health Corp. (OTCPK: EMGE) for even bigger gains. I made $5,819 INCLUDING my loss on a follow-up trade.
It’s still summer, the time when the market traditionally slows down. I keep my risk tight in slow markets, and I ALWAYS recommend caution for my students.
Think like a sniper. A sniper can watch a target for days, weeks even. When the right moment comes, they’re prepared.
Brookmount Explorations Inc. (OTCPK: BMXI)
I’ve been watching this stock since this news goosed its share price almost 300%…
I overcommitted to my next trade. I was too confident that it would bounce, and I added to my position even when the price was sagging…
I ended up losing $1,358. I’m not proud of this trade, but I still want you to study it. I even made a webinar for my Challenge students about this trade called “How I Screwed Up Today With A Lack Of Discipline.”
The moment you start believing in a penny stock is the moment that it’ll go against you. That doesn’t mean you should ignore the fact that BMXI was priced at $1.50 two years ago, and that it has a history of big runs…
It means that you need to wait until its chart matches your preferred setups. With a press conference scheduled for August 8, there’s a chance more news is on the way.
Better Therapeutics Inc. (NASDAQ: BTTX)
Here’s another stock that recently spiked on an exciting medical study…
Will its therapy become a new standard in treating type 2 diabetes? I’ll believe it when I see it.
I do know that this 2021 SPAC has a history of runs. It trended down in 2022 along with the rest of the market…
Cryptyde Inc. (NASDAQ: TYDE)
TYDE is a spinoff of Vinco Ventures Inc. (NASDAQ: BBIG), a sketchy tech company that became a Reddit favorite. Even though BBIG stock has slumped by 300% this year, they know how to play the game.
— Timothy Sykes (@timothysykes) March 23, 2021
When Vinco launched NFT-focused Cryptide, they created a bridge to BBIG by giving its stockholders shares in the new venture.
Now, with a weird shorting pump, they’ve gotten short-hunters interested.
It spiked 60% before finishing the day up 40%. I’ll be watching to see what comes next.
How to Use This Penny Stocks Watch List
My watchlists aren’t rocket science. They’re a product of paying attention to what’s already happened.
You should use this list as a model for your own watchlists.
Don’t just copy the stocks on this list. Learn my selection process and create your own.
Can You Trade Penny Stocks?
Penny stocks get a bad rap.
Sure, 99% of them are crap. Most are even outright scams.
But where else can you earn 15-30% profits on a single trade?
Penny stocks are only bad if you start to believe the hype. Take BTTX above…
It’s got an awesome story to sell. And — just maybe — they’ll become the maker of a front-line diabetes treatment.
But you know who I’d bet on instead? Eli Lilly and Co. (NYSE: LLY), a $300 billion company that’s one of the leaders in diabetes care.
They’ve got a $7 billion R&D budget. So yes, they’ll probably beat BTTX to any game-changing advancements.
If you buy a penny stock thinking it will become the next Amazon, you’re basically buying a lottery ticket. That can be fun, but it’s no way to build your trading account.
The right way to go about it requires discipline and a good trading plan.
5 Tips on How to Choose the Best Penny Stocks to Watch
I want my students to become self-sufficient. Like I said before, my watchlists aren’t rocket science. I build them by sticking to these eight steps.
Tip #1: Look for Big Percent Gainers
How do you find hot stocks? The first step is learning to use a stock screener.
I use StocksToTrade — a powerful trading platform with more than 40 built-in scans. It doesn’t hurt that some of them were tailored around my strategies.
I scan in premarket to know what’s moving. Penny stocks that know the game often put out PR in premarket. This gives traders the whole day to send their stock prices up before they dilute.
I typically look for 10% gainers. These are the stocks that the rest of the market has their eyes on.
Tip #2: Look for Big Volume
Volume is the proof of demand. If a stock has enough volume — on a small enough float — that’s a good sign that the price will continue to move.
Tip #3: Look for a News Catalyst
The ‘product’ of most penny stocks is their own stock. They want to pump it up, then insider trade/dilute into this built-up demand.
A lot of penny stock traders will believe anything — but I won’t. I want to see real news behind a stock move before I trade it.
Tip #4: Look at the Long-Term Chart
I talk about former runners a lot. That’s one reason I’ll look at a stock’s long-term chart…
If I know it has run in the past, I’ll know it can do it again. And looking at its past runs can help me tell the difference between a multi-day runner and a one-and-done spike.
I don’t do anything too complicated with my charting. I’ve been using my 7-step pennystocking framework for the past 10 years…
I still use it because the game hasn’t changed.
Tip #5: Use the Twitter Scanner on StocksToTrade
You have to know if a stock is being pumped before you trade it. Twitter is the first place all the wannabe influencers go to hype up a stock.
If you’re wary about getting sucked into the Twitter hellscape, StocksToTrade is way ahead of you. Using the built-in Twitter scanner, you’ll get a running feed of stock tweets.
You can even customize the feed if you like.
Frequently Asked Questions About Penny Stocks
Trading is the hardest thing you’ll ever learn. There are no dumb questions.
What Are Penny Stocks?
Penny stocks trade for $5 or less per share. Institutional investors usually won’t touch them, and their low cost makes them ripe for speculation and big-time volatility. Some are listed on the major exchanges, others trade on the OTC markets.
Are Penny Stocks Worth It?
I like penny stocks because they give traders with small accounts a way to quickly make 10% or more on a trade. Never believe in these stocks though. Most of these companies are more serious about their stock sales than their actual businesses.
Are Penny Stocks Dangerous?
Penny stocks are only dangerous when you trade without a plan, risk money you can’t afford to lose, and don’t cut your losses quickly. These however are all typical newbie mistakes, and they’re why penny stocks have gotten a bad rap.
How Do You Watch Penny Stocks?
I outline the steps I follow in the section above. I make a new watchlist every day, and keep a roster of other watchlists as well.
If Most Penny Stock Companies Fail, Why Not Just Short Sell?
Shorting is the easiest way to blow up your account. And it’s even more dangerous now that retail traders know the signs of high short interest.
Since GameStop, they’ve been out for blood.
When you buy a stock, you can only lose what you put into the position. When you short sell, you risk all the money in your account.
Of course, you can be successful as a short seller. Many of my top students focus on short selling and I’ve personally made millions from short selling. But the number of messages I get almost daily from short sellers getting caught in short squeezes is … scary.
How Much Money Do I Need to Get Started?
Many brokers have done away with minimums for cash accounts. But that isn’t the cost you should be worried about. The market will take your money if you’re unprepared.
Education is what separates the winners and losers in trading.
Newbie: How fast can I make $1 million?
Veteran trader: How fast can you learn patterns, ideal setups & discipline to be prepared for what the market offers?
Newbie: Give me hot picks so I can get rich ASAP
Veteran trader: Give me education so I can learn to be self-sufficient
— Timothy Sykes (@timothysykes) June 4, 2022
I can give you all the “hot picks” you want — that means nothing if you don’t know what to do with them.
But fear not — giving new traders their education is what I was put on this earth to do!
I’ve been trading for more than 20 years. During that time, I’ve made over $7.4 million.
That isn’t what I’m most proud of. I’m prouder that I’ve turned more than 20 of my Trading Challenge students into millionaire traders.
I didn’t do this by giving them hot stock picks. I did it by being relentlessly honest about my successes and failures, and teaching them to be that way too.
You don’t become a millionaire trader by trying to impress your Twitter followers, like so many other ‘gurus’ do. You get there by being honest with them, and yourself. That’s why I’m always honest with my students — ESPECIALLY about my failures.
Because they’re not real failures if I’m following my rules, and cutting my losses quickly. When I lose, I want to show my students the right way to trade. That’s the secret to becoming a self-sufficient trader — knowing how to manage your losses.
Are you ready for this level of real talk? Apply for my Trading Challenge and show me what you’ve got.
We don’t accept everyone. We like to limit our community to people who are humble, people who work hard.
Think you’ve got what it takes? Apply to my Trading Challenge today!
Penny stocks can be a blessing or a curse — it’s all in how you trade them.
If you’re new to this, start paying attention. Study the patterns I teach.
That’s the only way to survive in this penny stock game.
Do you have your own penny stock watchlist? How many of the stocks on this list are on yours?