Penny Stock Investing Demands Focus And Patience. It Worked For The Wright Brothers, And It Will Work For You

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Successful penny stock investing demands focus.

Over 100 years ago, Wilbur and Orville Wright Launched and flew the first powered aircraft flight at Kitty Hawk, North Carolina.

During this same time, Samuel Langley and Alexander Graham Bell were also struggling to be the first to build an airplane. Bell and Langley focused on perfecting the aircraft’s engine, and had considerable financial backing to design and build state-of-the-art engines.

Back in Dayton, Ohio, the Wright brothers chose a different tack. The Wright’s focused on perfecting a glider. Once they had a flyable glider, they then turned their focus onto powering it.

Successful Penny Stock Investing

The key to successful penny stock investing is hidden in this little story. You see, while Langley and Bell had huge funding support, they missed the boat because they focused on the wrong thing.

Likewise, when you look for the perfect penny stock pick, you could throw a heap of money at a hundred different stocks, and then wait for a few of them to make you some money.

But there’s a better, and less expensive way to achieve the same goal. I prefer to take the Wright brother’s approach.

Find a stock that will fly, and then apply money.

As the Wright brothers discovered, building and perfecting a glider took research and hard work. And yes, there I go again, talking about research.

Penny Stock Research Leads To Profit

Use forums, message boards, and newsletters to get you started in your search through the over 5,000 penny stock choices you have out there. From this huge list, identify 25 stocks you believe warrant further research.

Please note that newsletters and stock forums are not the end of the line for your research. I use them as a starting point, but by no means trust them to point me in the right direction.

There are just too many pump and dump schemes out there. To succeed in the penny stock market you must do your own due diligence on a stock.

I like to use Pinksheets.com and OTCBB.com as my primary sources of stock information. Beyond that you can Google the company’s name for information, and visit the Secretary of State website for the state where your stock is incorporated.

I also use products published by Day Trading Freedom and Secrets of Successful Trading to help me make my trade decisions.

Here’s one way research saved me from making a poor investment decision.

My watch list included a stock incorporated in Florida. The S.O.S. for Florida posts corporate information at Sunbiz.org. During a recent search of this website I discovered my stock in question had just increased its authorized share count by about 50%. This information was not even available via a press release yet, but there it was—waiting to be found by the diligent penny stock investor.

Whether that share count increase will adversely impact the stock price or not remains to be seen. The point is, with a little work it is information you are now aware of.

And I can almost guarantee you very few other penny stock investors know this information. It’s easy to wait for the press releases—but if you do, you’re ripping yourself off of trade opportunities. Finding the best penny stock pick demands more than that.

The late shipping tycoon Aristotle Onasis once said something to the effect, “I make my money by knowing things that other people don’t.” That should be the mantra for every penny stock investor—“know what others don’t.”

Successful penny stock investing is about focusing on the right things. Focus on putting your money into well researched stocks that meet your stringent quality standards. Here are the basic things I look for in a penny stock:

• Current filings at pinksheets.com
• A balance sheet that shows current assets greater than current liabilities
• A workable business model that results in positive cash flow
• No history of stock dilution

In penny stock investing, finding a company that meets all of the above criteria may be difficult. Yes, it takes research and patience. Don’t just throw money at your problem like Langley and Bell. Diligently work through the challenge like the Wright brothers.

Once you have narrowed your list to a handful of companies you believe in, then watch the charts for technical indicators for a good entry point. I like to do my charting at stockcharts.com. Easy and clear.

I typically focus on volume, MACD, and Stochastics for my key indicators. You may of course expand this as your knowledge and experience with charting increases. You may also want to learn about Candlestick charting to increase your trade profits even further.

The key to successful penny stock investing, in my opinion, is patience and focus.

Focus on finding good penny stocks to trade, and then have the patience to wait for the perfect entry point.

If you can do that, your penny stock portfolio will fly higher and faster than the Wright’s could have ever dreamed. Successful penny stock investing takes focus and patience. Learn more at my homepage.