The story on cheap stocks-Is there money to be made? How much does one need to know?

I am thinking about buying up some cheap stocks-like in the $2-20 ea bracket. Has anyone that is "new" to stocks and the market made any money this way? How much of a time investment would it be to learn the ins and outs and keep an eye on the markets? Some say we(the us) is going into a mild recession of sorts-it seems so. Would you suggest informed investing in some cheap stocks right now?

Cheap Stocks (penny stocks) is the the place to make money in the market after about 10 years or more of trading experience. Most professional stock traders (and semi-professional) won't ever go near them.

I spent the past thirty years investing. One year ago started to learn trading. I've gone through a dozen books which 'll need to re-read again. I listen to www.traderinterviews every week.
I watch http://www.alphatrends.net/ every day.

The hardest thing to "understand" is the relationship between profit and money management. To be successful at penny stocks you'd have to assume 70% of your trades will lose. I trade mid and large cap stocks. I'm considered "good" if 50% of my trades are good. The trick is a good win/loss ratio. Managing your losses is critical.

I'm making money......... but I need to improve my skills. There's no way I know enough to get into stocks under $20.00.

A professional trader I listen to every day basically says the same thing;
http://streamer.thinkorswim.com:8000/sha...
(Check it out between 9:15AM - 11:30AM & 1:30PM - 4:00PM, every trading day (EDT).

Pick up some books on trading. That's a start...... This stuff is hard work.... but fun and potentially rewarding.

Cheap stocks are usually cheap stock for a reason. Just because they are trading at $2 does not mean its cheap. If you are interested in trading take a look at #1 on http:///www.Wahrs.net comes highly recommended.

Here are some personally recommended websites if you want to learn more about stocks, trading or forex. they give good advice.


http://www.netpicks.com
http://www.universalmarkettrader.com

Buying individual stocks, whether cheap or not, is always a gamble. It is like playing the lotto. Obviously, investing long term will weather the storms, but you are better off with mutual funds. They perform better and the volatility is not out of control.

Don't worry about price per share. 100 shares of a $5 stock or 10 shares of a $50 stock is still $500 and if they go up 10% then you've made $50 profit on either.

"Cheap" should be considered relative to potential. Paying $50 for a stock is cheap if it's a growing company on it's way to $90. Paying $5 for a stock is expensive if it's on it's wat to $1.

Any stock below $2 is considered a penny stock, and those would be your cheap stocks. It all really depends on the stocks that you buy. When you look into a stock do a check on the company. How do they make money? How long have they been in business? What is special about them? These are some very basic questions to ask when looking into stocks.
Any investment with stocks should be for the long run, and I mean 5 - 10 years. While day trading may seem a quick and easy way to make money...most day traders forget just how much of that gets taxed at the end of each year.
Right now is a great time to learn some things in the markets. Pick a couple of stocks and pretend to buy them...just write down the price and how many shares you would have liked to have bought. Then monitor the stocks and see how they do over a year or so. You will get the hang of it eventually and notice some small paterns in the companies you watch. Good luck and if you would like more advice please feel free to email me at robert.layer@rbc.com and I will be happy to answer any of your questions