Sunday, May 30, 2010

Penny Stock Billionaire - The Story of John Templeton

Can you invest $200 in penny stocks or what you call microcaps and make that investment grow into something like $100K or even $1M in the next few years? Many people don't take microcaps as serious investments. There is some element of truth in that. But do you know a guy who turned $1K into $1M in just 1 month with penny stocks in just 38 trades! Or do you know the person famously known as the Penny Stock Billionaire?

So why microcaps? There are thousands of stocks in markets like technology, agriculture, health, commodities, energy and more. But what makes penny stocks different from the normal stocks is that they are dirt cheap. Most of these microcaps get traded for as little as $0.1 per share.

Imagine, discovering a stock costing $0.1 per share skyrocketing into $10 per share in a matter of let's say a few weeks. That is a gain of 10,000%. So with microcaps, you have the potential of an explosive gain and with the price as low as a few cents to a few dollars, small investors can also play with them.

Now the problem with most stocks is that they take too long a time to show a capital gain. For a stock to go from $50 per share to $100 per share can take a few years. But a stock priced $1 per share can easily double overnight. Hey, it's only one dollar.

So with penny stocks, you can get rich at lightening speed and also get poor with the same speed if you don't invest in them prudently. The best way to invest in penny stocks is to just start with $200.Grow that $200 into $1000! That $1000 into $10,000. That $10,000 into $100,000. You got the picture.

Over the last few decades, penny stocks have regularly outperformed regular stocks by huge margins. In 1939, John Templeton bought 100 shares of every company trading under $1 per share. Over the next few years, his investment multiplied by many times even though many of the companies that he had invested in went bankrupt.

This shows that profitability of penny stocks. John Templeton eventually retired as a billionaire and passed the rest of his days in sunny carefree Bahamas. John Templeton had graduated from Yale and he was a pioneer of investing in globally diversified mutual funds. But his success had started from his plan to buy 100 shares of every company trading before $1 per share.

Mr. Ahmad Hassam has done Masters from Harvard University. Turn $200 into $100K in just 1 Month with this FREE Penny Stock Report that shows how to find killer stocks. Read this Trade The Banks Special FREE Report Series that shows how to legally spy on big bank trades and know exactly what stocks to buy or sell!

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Monday, February 4, 2008

Understanding the Two Different Types of Forex Brokers

If you are trading the forex market on a retail or individual level, there is a very slim chance that you will be able to participate in the interbank market.

Typically, the smallest trade that can be placed on the interbank market is USD $1,000,000, so really only high-net worth individuals could possibly have the trading capital to participate in this segment of forex trading.

The smaller part of forex trading is called the retail or individual forex market, and anybody can trade this market with as little as $500 due to the existence of retail forex brokers. It is, however, important to understand the two different types of forex brokers that you will encounter when you are navigating the slightly murky waters of forex so that you can grow your money and not lose it.

The two different types of forex brokers are called 'market makers' and 'ECN brokers' (ECN stands for electronic communications network). The most typical question that many traders ask initially is 'Which one is better?' and it would probably be best to say that ECN brokers are better for the simple reason that market makers have a vested interest in seeing you lose money trading (as you will see below).

First, let's break down how each of these two different types of brokers are set up. Let's begin by making sure you understand the reason that these brokers exist in the first place: they exist to provide forex market access to people who have a willingness to trade but do not have access to vast reserves of capital necessary to participate in the interbank market.

Simply put, the only role an ECN broker is to match buyers and sellers by putting orders through their communications network. ECN brokers play no role in actually providing liquidity, all they do is provide a medium where buyers and sellers can find each other, so they also play no role in manipulating market prices in any way.

The goal of the forex market maker is to provide liquidity to potential traders, and the way that they do this is to take the opposite position on every trade that you make. For example, if you want to buy 1 lot of EUR/USD, some other party will need to place a sell of this same size in order for the trade to go through. This is what the market maker does, and they will be on the opposite side of every trade that you make.

Also realize that forex trading in this manner is what we call a 'zero-sum' transaction, which simply means that for every time that you make money, some other trader has to lose money, and vice versa. So what does this mean for you if you choose a market maker as your foex broker? It means that every time you have a profitable trade, you take money away from your broker, and your broker will make money every time you have a losing trade.

Now your market maker will probably never admit it to you, but because they stand to profit every time you lose on a trade, it is actually in their best interest to see you lose. It is, however, still very possible to make money for yourself if your broker is a market maker, though if you become highly profitable then they may come up with some BS excuses for why they cannot give you your money.

So if this ever happens, and your broker starts giving you fake excuses like 'We cannot guarantee this fill on your trade because you entered the market at a volatile time, blah blah,' it is time to find a new broker!

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