D.S. Assem At How To Invest In Penny Stocks For Beginners

Penny Stock Basics Cont’d These particular companies will typically not be found on the NYSE or NASDAQ exchanges. You can instead find them on the OTCQB, OTCQX & OTCPink markets. We call these stocks “Sub-Penny Stocks”. These particular companies are typically not going to be found on the larger and more popular NYSE or NASDAQ exchanges. You can instead find them on the OTCQB, OTCQX & OTCPink markets. They are called “Sub-Pennies”. Tier 4 Penny Stocks: Although Tier 4 penny stocks can technically be tiered under the 3rd tier, the stocks that trade between .0001 & .0009 have their own tier. We call these stocks “Triple Zero Stocks”. Most of the penny stock newsletters and alerts are focused around triple zero stocks. These can be very lucrative if you find yourself holding a good triple zero stock. Common Penny Stock Terminology & Lingo In order for you to be able to properly learn the rest of this book’s material, there are some terms that we will now go over. These terms are used in the penny stock world daily and you definitely should know their meaning. We will include some very basic terms as well as the more advanced ones. Buy: To buy a company’s shares of stock. You buy it with the intent that the stock will hopefully go up so that you can make money with it. Sell: Sell means to sell the shares of a stock that you currently own. If the stock’s share prices went up from your initial “Buy” price, then you will want to execute a sell order in order to make a profit on your investment. The other time you will want to sell is to get out of a stock if it starts going down. You do this to get out of 11 10 Best Penny Stock Concepts & Strategies LearnedGold.Com

Penny Stock Basics Cont’d your position in order to not lose money. Short Sell: This is a method that is used to sell a stock that you don’t own. I know, sounds confusing right? Well, it is really not. You take a loan out from your broker to buy shares from them. Then you wait for the price of the stock to go down so that you can sell those same shares back to the broker for a lower price than where you bought them initially. This is called shorting the stock, where you make money with the stock price going down. Level 2 Quotes: This is a set of real time trading information that includes information on who the current market makers are, the stock’s Ask or Bid price and order/transaction history. Market Maker: A market maker is an individual market participant or an employee of an exchange that buys and/or sells shares of a stock for its own account. You can see the market makers on L2 quotes. Bid Price: This is the price that buyers are willing to pay in order to buy a stock. Ask Price: The asking price is the price that a stock’s holder is willing to sell the stock for. Bid / Ask Price Spread: This is the difference between a stock’s bid and ask prices. 12 10 Best Penny Stock Concepts & Strategies LearnedGold.Com

Penny Stock Basics Cont’d For example, if you are looking at a Tier 4 penny stock, you might see a bid/ask spread of .0001 and .0003. Where the bidding price is .0001 and the asking price is .0003. This is called the spread. Market makers will sometimes make trades between the bid spread. So in this case, they might buy/sell this example stock at a price of .0002. Limit Order: This is when you place a limit order with your broker for the exact price that you are willing to pay for a stock’s shares. This way, you are not buying the stock’s shares at market price; you are instead trying to get the shares at your price. Market Order: If you don’t have time to put in a limit order, you may instead place a market order. This order type will give you the best available market price at the time when your order reaches the market. Averaging Down: Averaging down means buying more shares of the same stock that you currently hold. As the price of the stock moves down, you can buy more shares for a lower price in order to average the total cost of your shares down. For example, if you own 100 shares of a penny stock’s at a price of .0004, and the price later goes down to .0002 and you buy 100 more shares at the new price. You will now have 100 shares at .0004 and 100 shares at .0002, this averages down to 200 shares at .0003. De-listing of a Penny Stock: When a stock is no longer traded on an exchange, it is considered to be delisted. To get re-listed, the company would need to clear up any issues and get all of their paperwork in order to reapply for the exchange. 13 10 Best Penny Stock Concepts & Strategies LearnedGold.Com

Penny Stock Basics Cont’d Averaging Down: Averaging down means buying more shares of the same stock that you currently hold. As the price of the stock moves down, you can buy more shares for a lower price in order to average your total holding share prices down. for example, if you own 100 of a penny stock’s shares a at .0004, and the price of the stock goes down to .0002 and you buy 100 more shares at the new price. You will now have 100 shares at .0004 and 100 shares at .0002, this averages down to 200 shares at .0003. De-listing of a Penny Stock: When a stock is no longer trader on an exchange, it is considered to be delisted. In order for a company to be re-listed, they would need to clear up any issues and get all of their paperwork completed in order to reapply for the exchange. Halts: When an exchange temporarily or even permanently stops a stock from trading on the markets. There are also times when a company can actually request that their stock be halted. There are many different reasons for halts, some of them are unethical, and others are ethical. For example, if big news comes out about a company that can impact the company’s stock in a big way, the company may request that their stock be temporarily halted in order to allow sufficient time for the 10 Best Penny Stock Concepts & Strategies 14 LearnedGold.Com

Penny Stock Basics Cont’d news to disseminate through the different channels. Stock Screening: This is a way of looking for potential stocks to invest in via a tool called a stock screener. There are many different stock screeners out there, some good and some bad. More on this later. Share Structure: A stock’s share structure includes information on; the market cap amount, authorized share number, outstanding share number, the float and more. This is all very important information when researching penny stocks to buy. Common Stock: All of a stock’s shares that are currently available to the public for trading. Preferred Stock: Preferred stock is typically reserved for private ownership. Penny stock companies can even use preferred stock to pay for services. For instance, I have seen where a company will go out and pay somebody for a service by giving them stock shares as payment. Fundamental Analysis: This is a type of an analysis that stock investors utilize to research a penny stock by looking at a company’s; financials, marketing material, filling status, industry conditions and more. Technical Analysis: Technical analysis is another method of performing research on a penny stock. Things like the share structure & chart history are all looked at. 15 10 Best Penny Stock Concepts & Strategies LearnedGold.Com

Penny Stock Basics Cont’d Common Penny Stock Scams to Watch Out For Although there can be a variety of different scams in the penny stock world, the two that we will describe below tend to be the most common ones. The Famous PUMP and DUMP Scam: Quite often, we come across various penny stock alerts either via email, website ads, text-messages or even a phone call telling us to “buy this penny stock quickly”, or “don’t get stuck holding a bag, sell now” or a similar sales pitch. Well, as it turns out; these people that are alerting this stock are most likely just trying to make money off you. What usually happens, is that the person alerting a stock has most likely been paid by the company to discuss their stock, or they are themselves holding a large position in the company’s stock and are looking for someone to sell all of their shares to. They will hype and hype a stock until people start buying into the hype and bring in volume. Once the volume comes in, the stock will spike upwards and fool more investors into thinking that the stock is really becoming a rocket stock. This is where the promoter or the penny stock company both start selling shares into this volume. Once the promoter or company have made their money, they stop promoting the stock; this in turn results in the drying up of volume and the price of the stock tanking. The so called “Off-Shore” Scam: There is a small loophole in the OTC markets, where a penny stock company can sell their stock outside the United States to foreign or 16 10 Best Penny Stock Concepts & Strategies LearnedGold.Com

Penny Stock Basics Cont’d “off-shore” entities without the legal need to register the “sold stock data” with the SEC. This sale of stock is usually sold to the “off-shore” investor at a huge discount. Once these scammers get their hands on that company’s stock, they can then sell the stock back to the US investors at inflated prices. In the process, they create huge profits for themselves and the company that sold them the shares (as they usually split the profits up with the company). Since these crooks end up flooding the US markets with all of their shares, the price of the penny stock will drop; leaving unsuspecting investors holding bags and completely losing their investment. Penny Stock Share Structure Explained When it comes to penny stocks, one of the most important technical analysis factors to look for is the stock’s share structure. I will go ahead and break down what each component of the share structure represents and why its so important to know this information. Market Cap: Market capitalization (also commonly known as market cap), is the market value of a company’s outstanding shares (shares that are currently trading on the market). If you were to multiply the outstanding shares by the price of the stock, you would end up with the market cap. Although this metric is usually important in stock trading, it is not very important with most penny stock trading decisions. Reason being, is that the penny stock market is too volatile. Meaning, the stock price is too easily able to manipulate and it tends to change quite easily. Authorized Shares: When it comes to a company’s stock, the company is only allowed to issue a certain amount of shares into the market. The number of shares that it is allowed to issue are called authorized shares. For instance, 10 Best Penny Stock Concepts & Strategies 17 LearnedGold.Com

Penny Stock Basics Cont’d a company has an authorized share structure of 100,000 shares. They are only able to issue 100,000 shares. If they would like to issue more shares than that, paperwork has to be filled along with an official filing that is available to the public. This is a very important factor when determining a stock’s worthiness. You typically never want to buy a stock that has lots of shares available as a part of their authorized shares. For example, a stock that has an authorized share structure of 20,000,000,000 (20 billion), is typically not as good of a buy as one that only has 100,000,000 (100 million). Outstanding Shares: A stock’s outstanding shares are also a very important metric when researching penny stocks. These are the number of shares that are currently authorized, issued and purchased by the various investors and are currently being held by them. For example, if a penny stock has 100 million shares authorized, and 30 million of those shares are outstanding, that means that 30 million of them are currently being held by investors. The other 70 million are authorized, but still yet to be issued. The reason why this is also important data to us, is because you want to target stocks that do not have too many authorized shares available and whose outstanding shares are pretty close to the authorized number of shares. With a maxed out outstanding shares, that would mean that all of the shares are accounted for and that the company could not dilute the stock any more without first sending out documentation to the SEC. Float: The last important piece of the share structure is the float. This is referring to the number of shares available for the public to trade. As mentioned earlier, the 10 Best Penny Stock Concepts & Strategies 18 LearnedGold.Com

Penny Stock Basics Cont’d outstanding shares (OS) represent the total number of company shares currently available for trading. Now, there are also privately owned shares as part of the Outstanding Shares in a stock’s share structure. When you deduct the private shares from the OS structure, you effectively end up with the float. The reason why this is important to us is that we want the float to be really small. The smaller the float, the easier the stock can move. L2 Quotes Explained If you are a serious and active trader (or want to become one), it is paramount that you learn all you can about L2 Quotes. L2 quotes can show you what is going on with a stock at any moment; what trades are being made, how much volume is coming in, where the support and resistance levels are, how much interest there is 10 Best Penny Stock Concepts & Strategies 19 LearnedGold.Com

Penny Stock Basics Cont’d with the stock etc. We will go ahead and go through the different components of the most important features that encompass the L2 quotes. If you look at the image on the previous page, you will see a screenshot of a popular L2 quote service. This particular one is provided by Investorshub. Let’s go ahead and break this image down a bit for a better understanding. At the top area of the image, you will see a place where you can search for the stock symbol. The image has information on the stock “ELCR” is pulled up. Directly under this stock symbol search box, you will find (in yellow) the total number of shares so far traded for the day. In the case of the image, there are over 114 million shares that have traded so far. Total Volume Traded for the Day: Current BID Price: Current ASK Price: All Market Makers Currently On the Stock – The screenshot below shows all of the different market makers that want to buy and sell the stock. On the left side you will find the market markers that are sitting on the bid and wanting to buy the stock. And on the right side, you will find the market makers that want to sell the stock. The screenshot also shows how much stock the market makers are willing to buy or sell (in this case 50 shares It can actually be in the millions – sometimes the market makers will hide the true number of shares as well). All Streaming Orders As They Happen Live – If you look at the image on the next page, you will see all of the past orders and trades that have happened. The red ones usually mean that they are being sold into the BID. The green ones typically 20 10 Best Penny Stock Concepts & Strategies LearnedGold.Com

Penny Stock Basics Cont’d mean that the shares are being bought by somebody directly buying from the ASK (or current market price). Knowing if most of the volume that is coming in is buyer volume is very important. If most of the volume is from buyers, and they are repeatedly hitting the ASK price, that usually means that all of the shares on the ASK are being bought up and the stock might end up going up instead of down. Green typically means good buyer interest. For example, if a company releases some amazing news, then there will be more buyers “when compared to sellers” that are trying to get in. If on the other hand the company releases some bad news, then you will see nothing but red sell orders on the L2 quotes as the investors try to exit the stock. 21 10 Best Penny Stock Concepts & Strategies LearnedGold.Com

Strategy #1 Best Penny Stock Screening Strategy For Massive Gains Here, I will show you how to find the best penny stocks to trade via the OTCMarkets.com stock screener. 22 10 Best Penny Stock Concepts & Strategies LearnedGold.Com

Penny Stock Screener Basics Alright, now that we got some of the penny stock basics out of the way, we can get into the good stuff. First up, I will share with you the absolute best strategy for utilizing a stock screener to find potential penny stock rockets. There is certain criteria that each one of the penny stocks will need to have in order for us to consider buying them. As mentioned in the basic concepts section (under basic penny stock terms and lingo), stock screeners can be used to search for penny stocks by utilizing many different categories and data points to find he exact companies that we are searching for. Some stock screeners are better than others. Having the most up to date and current information out there is one of the utmost important things to when searching out good quality penny stocks. I will go ahead and breakdown the different sections of one of the stock screeners that I use for almost all of my screening needs. Once we go through the stock screener basics, we will move on to the Best Penny Stock Screening Strategy. The OTCMarkets.Com Stock Screener When it comes to penny stocks, one of the best stock screeners out there is OTCMarkets.com’s penny stock screener. Since this particular screener is offered by the actual provider of the markets where most penny stocks trade, you can rest assured that they will probably have the most up to date information on the penny stocks. Now, one thing to keep in mind, is the fact that the stock screener offered by OTCMarkets.com will typically not include any results from the NASDAQ and/or NYSE stocks. 10 Best Penny Stock Concepts & Strategies 23 LearnedGold.Com

Best Penny Stock Screening Strategy For Massive Gains Cont’d Lets go over some of the most helpful features that you can find on this stock screener. OTCMarkets.com Penny Stock Screener Features 1. Growth – This sections of the otcmarkets.com stock screen screener is super useful as it allows you to search for penny stock companies that are in a particular price range as well as a specific volume of trading. Here is a breakdown of the growth section. Price – The price boxes should be utilized to pinpoint the exact price range of a stock’s share price that you are looking for. If you remember, penny stocks have 4 different tiers that we could focus on. With the price range boxes, you can look for penny stocks within a specific tier. For instance, if you want to look for a stock that is trading with a price around .002/share, then you could type in a mini

Best Strategy for Trading Penny Stock Alerts 68 Strategy #7. Best Strategy for Trading The Penny Stock Pump & Dump 76 Strategy #8. Best Time to Buy or Sell a Penny Stock 82 Strategy #9. Best Strategy for Making Profits With .0001 Penny Stocks 87 Strategy #10. Best Penny Stock Exit Strategy for Maximum Risk Reduction 91 i. Introduction ii.