OTC Risks Rewards:
How to Screen for Winners
with the Investor Advantage

OTC Risks Rewards

Risks of OTC stocks verses Rewards:

I review, repeat, tie-in and re-use concepts and strategies on this page from pages you have previously studied.

Why do I do this? So your mind is continually recollecting, apprehending, and rightly guessing the outcomes of concepts I cover here.

In this way, your mind is being conditioned to view these strategies as a whole trading system that targets future rocket stocks for explosive profits. . . To automatically think like an Extraordinary Investor.

My style of writing may repetitious to some and more so on this page.

I'm enthusiastic and desire so much for this knowledge to totally consume your mind that I do repeat concepts. This is especially important now, because you are now nearing the end of your lessons of the Strategies of Extraordinary Investing.

I am appealing to you, the reader, to view this variety of repetition as the means of fully integrating this information into your Mind of Understanding.

Let us continue then. . .

OTC Risks Rewards: NASDAQ and OTCBB

The NASDAQ contains the best quality overall penny stocks while the OTC-BB stocks and Pink OTC Markets are associated with the most risk by investors, although potentially greater rewards.

With the proper knowledge and preparation you are now receiving, you will continue to develop your extraordinary ability to identify the risks and rewards of trading OTC stocks.

This page shows how to limit risks and take advantage of the risks of others in screening for, and the trading of, high potential OTC stocks.

The goal of all this effort is to earn huge consistent low risk profits on all penny stock trades you make - to become an extraodinary investor.

Major strategies and concepts that are drawn upon from past pages are:

• Taking Advantage of the Risks others take

• Reading Between the Lines

• The Investor Advantage

• The Mysterious Sixth Sense of Extraordinary Investing

These strategies are co-dependent, in that one concept cannot exist without the other. They all work together. The foundation is the Investor Advantage.

This page, OTC Risks Rewards, gives you a fairly revealing picture of understanding how OTC risks rewards are not just manageable, but controllable, creating consistently high profit low risk trades for you.

OTC Market and Rocket Stocks. . .

The OTC Market, unlike other financial markets, is the home of explosive trending stocks - the rocket stocks - because:

• diamonds in the rough exist among OTC stocks with products in development that will cause such stocks to explode in value repeatedly for many chances to invest and profit.

• the OTC is thinly traded and not watched or traded nearly as much by professional and institutional investors until these diamonds in the rough finally gain or re-gain media recognition.

What this means to you is that, since penny stocks are your specialty, then you gain an Investor Advantage by targeting, studying and investing in a recovering sector of stocks, and in OTC Gems within that sector, before they gain recognition from stock promoters and investors in general.

OTC stocks create explosive trends more often and like nothing seen on the exchanges or other financial markets.

OTC Risks Rewards:

The Investor Advantage - highlights

The Investor Advantage becomes a reality when you correctly study and then invest in a financial market, a sector of stocks, and a high potential target stock that is

• not a fad

• thinly traded

• not being watched by the majority of stock traders

• not presently being traded and/or promoted by marketeers.

When you Screen and Target for a sector of stocks and individual stocks like this, you

• set yourself up to be exposed to an extraordinary number of potential explosive trending stocks at historically low prices

• limit your risks of the stock trading much below what you invested

• You are investing like an Extraordinary Investor

• take advantage of the risks of those traders who begin trading a target stock on hyped up media coverage by *marketeers long after you are financially positioned in those stocks at sleeper share prices. Then you sell your shares to the hoards of follower investors at premium share prices near the top of the rally.

*Marketeers are those media bandits who eventually target, invest in, and then promote a high potential sleeper stock to make a profit off other traders they promote to.

The rest of this page reviews the details of:

• identifying and screening for high potential stocks

• identifying and taking advantage of trading risks,

• investing for safe, consistent explosive profits unlike anything else you see in other markets.

OTC Risks Rewards:

Why are OTC stocks treated with suspicion by many stock traders?

Here is the explanation:

OTC stocks are not nearly as trusted or recognized by investors as that of stocks traded on the stock exchanges, like the Nasdaq, NYSE, NYSE MKT (AMEX), mainly because:

• they are not regulated by review boards of the major exchanges.

• over half of the OTC stocks are victims of scams.

• many others represent companies that are in debt and have serious financial issues.

• most do not earn a profit

• many have negligible or untested products in development or exploration.

• many are so thinly traded that large investors cannot reasonably invest.

• more difficult for unlisted stocks to obtain financing for the other reasons mentioned.

• a good number are shell companies with no real product in development

• investors have been taught that such stocks are risky.

• most investors never learned the secret of successful investing in penny stocks

• Many nano-type OTC companies are generally new, a history of 10 years or less.

• Others are older companies that have been delisted from the NASDAQ in the past 3 or 4 years for not maintaining share prices over 99 cents, and perhaps other rules violations.

• OTC stocks are looked upon with suspicion and even with loathing by those investors who got stung by such stocks when they plunged in value.

Investors with big money become extremely skittish over such reasons as listed. Such investors will not follow or consider investing in them unless an OTC stock, and its accomplishments, are being covered by major financial media or they obtain insider knowledge of that stock.

Other factors that create a favorable environment for trading OTC stocks. . .

• an improving economy

• recovering sector of stocks

provides general investor optimism.

OTC Risks Rewards:

The risks are not entirely the fault of OTC penny stocks themselves.

Approximately 97% of investors lack the proper knowledge about penny stocks and how to locate and research them.

They don't know how or what to research and how to use information that is collected to accurately screen, target and trade high potential penny stocks.

For instance, many such investors rely too heavily on technical signals and inappropriate fundamental research.

More effectively stated, most investors lack complete knowledge of the proven investment strategies unique to penny stock investing.

OTC Risks Rewards:

Low risk, High profit Extraordinary Investing

Many investors look at OTC stocks as risky and shady until such stocks strike it big time. By that time, the stocks have already trended higher and thus become exceedingly risky to trade.

The Extraordinary Investor really has first choice searching for gems and investing in them before. . .

• marketeers invest in and promote them

• reliable financial media and professional marketeers begin reviewing such previously unknown or temporarily forgotten and over-looked companies, especially in a recovering sector of stocks.

• most other investors begin trading them

This is the Low Risk, High Profit Extraordinary Investor Reward of the Investor Advantage Strategy.

This is how you take advantage of the risks others take.

OTC Risks Rewards:

Most penny stock traders are followers, taking great risks doing so.

Once high potential OTC stocks are promoted, many investor pigs, technical traders, and YES professional investors begin looking at such stocks with great interest and start investing in them by the hoards, long after you purchased all the shares you desire at super bargain prices.

You had already planted your seeds earlier. By Screening, Targeting and Researching sleeper penny stocks of your specialty using the proven strategies as this site reveals, the extraordinary investor is ahead of the pack - finding and investing in gems before others know what happened.

Your investment in high potential sleeper companies are safe, or low risk, because the downside is minimal. Many investors are ready to throw their money in the pot once promoted. Such traders are ready to give their money to you when you finally sell at or near a safe top.

What was described is the Investor Advantage of the Extraordinary Investor giving such investor an unfair Investor Advantage over all other traders.

When the harvest is ripe, plenty of other traders will be anxious to buy your shares at higher prices that are 30% to over 300% over what you paid for them - providing you plenty of market liquidity to sell at the right time. This is what I call low risk high profit extraordinary investing - an Investor Advantage reward. This is how you take advantage of the risks others take.

OTC Risks Rewards:

The Investor Advantage

What was described is the Extraordinary Strategy of taking advantage of the Risks Others Take through the Investor Advantage. This is how you are able to earn consistently low risk high profits from the penny stock investing you do.

OTC Risks Rewards:

Sizing up a target penny stock for investment potential

Commonly, companies traded on the OTC are teetering on the edge of bankruptcy or running out of funds, which is the norm for developmental and exploration companies. That does not mean such companies will go into bankruptcy anytime soon. A company may be pulling out of bankruptcy, or just recovering from financial distress mostly through re-financing, creating more shares for sale, through loans, and investments.

The super sleeper OTC stocks are super in their own right for reasons listed earlier. These super sleepers have many connections and potential partners, collaborators and investors interested, or could be interested, in providing financial assistance (available investment options). That is what makes them super, that is what you look for when searching and targeting penny stocks to study and invest in.

All of this you must find out to provide the knowledge your mind requires to determine the risk level of high potential sleeper stocks. I have provided a list of key fundamental assets repeatedly to help you screen for these super sleeper stocks.

OTC Risks Rewards:

Much can happen to a distressed company that is positive..

Such companies, if they are good companies with exciting products in development, should be watched closely for opportunities to invest.

Watch for possible financial or service related assistance from interested private, public and/or governmental agencies or companies - which happens often with good developmental and exploration companies.

Look for signs of a possible buy out or collaboration. For instance, if a company is developing a product with great potential that other major companies - the competition - are also working on - That is good motive for the larger companies to buy out the smaller company, or its product in development, for its intellectual property and/or staff and thus gain a competitive advantage. If not a buyout, then likely a collaboration will form.

OTC Risks Rewards: Financing Not Always Good.

Obtaining financing is not always a good thing.

Be careful of those stocks that are attempting to gain financing by making swaps for millions of shares created at inflated prices, or short term loans at inflated interest rates. Both such unreasonable financing options come with unrealistic payment plans that will almost guarantee the company will go bankrupt within a few years.

Such unrealistic financing is secured usually because the stock is not that good to begin with, otherwise a good financing company would work with the company underlying the stock to obtain more favorable financing. . .

Risky financing options indicates to me that the stock is not as high potential as I might think... because if it was, investors would be motivated to invest in the company on more complimentary terms.

OTC Risks Rewards:

Good signs for Good Financing Potential

• Products in development must be truly novel and exciting with tests so far showing real value - real potential.

• Recent tests showing that the product in development is novel, safe, and more effective than what presently exists or what is currently being developed by other companies - the competition. Always check the competition for similar developments or products presently on the market.

• Powerful agencies - public and private - are very interested

• Acquiring good financing from a major player

• A history of acquiring repeat financing from the same financial institution(s).

• Acquiring grants from public, government or private sources

• One or more of its products successfully completing development, or FDA studies in the case of biotech stocks

• One or more of its products finally becomes profitable

• May start collecting royalties from other companies using its technology

• Public/government interest in the company creates credibility in the eyes of investors, thus easier for the company to obtain financing, etc.

• Potential for a buyout of its entire company, or one or more of its developmental products or intellectual property from competitors.

• Little to no history of reverse stock splits.

• Patents on super product inventions that have at least 10 yrs left unless add-on patent qualities are in the works that could add more time onto the patent.

• Few reverse stock splits historically. Any reverse splits for a super quality company's stock should be for the purpose of achieving a share price adequate for the stock to apply for listing on a stock exchange - advantageous to increasing financing options and investor interest. 

• Any mergers must truly add value to the resulting company.

I repeat a similar list again later on this page with some variation. Match both of them and see if you can find similarities and differences. This will help your mind remember and fit this all into place. If you noticed, I have given lists like this in past pages as well. Yes, there is a method to my madness.

OTC Risks Rewards:

Reading Between the Lines

The good signs just listed, coupled with a good economy and favorable political environment are important considerations of a stock's potential to gain needed financing, to continue developing its product line, and eventually gaining huge investor interest.

The only way your mind will understand this is through proper research based on areas of study I categorized for you. Once accomplished, your mind will have the info it requires to peer into the future of a company's potential and actually read between the lines vital information that has not yet been printed, but is most likely to occur.

OTC Risks Rewards:

OTC Stocks Financing More Difficult to Obtain

OTC stocks do have a more difficult time obtaining good financing simply because they are OTC stocks and listed stocks trading on a major exchange.

OTC Risks Rewards:

Reading Between The Lines / Invest Ahead of the News

You must learn to read between the lines and determine with good accuracy that seemingly disappointing or grim news will actually be overcome causing the stock to double or triple in value.

In other words, through your studying and monitoring of your target stock, you must learn to evaluate the company and all pertinent fundamentals and determine that a good outcome will likely occur. If all is well - invest appropriately ahead of the news.

A company, even an OTC, with a long history and with a good credit history is more likely to gain enough credibility with its public and private alliances to receive monetary and service related assistance on favorable terms - enough money to pursue development of an exciting product - at least for 6 months.

OTC Risks Rewards:

The Economy is a BIG factor

As the economy improves, you will see a resurgence in penny stock financial assistance and trading, which will create far more buying opportunities. When that time comes, many technology stocks will be trading 10 to 20 times their value, or what they used to trade about 8 or 9 years ago before the economic depression/recession. This phenomenon will be explained in more detail under a future topic called, "Technology Stocks."

OTC Risks Rewards - Reviewing Concepts

OTC Risks Rewards:

Wealthy, professional and institutional investors avoid most OTC stocks until they are heavily promoted. . .

These types of investors typically invest far more money than is realistic in the more thinly traded "risky" OTC stocks. This means that YOU have an opportunity to invest in super exciting companies before they are noticed by professional investors.

OTC Risks Rewards:

Technical trading of Penny Stocks is Risky.

Most professional and institutional investors are primarily technical traders, so they are unfamiliar with the methods used to trade penny stocks. Penny stocks, therefore, appear unpredictable and thus are far riskier for them. YOU will take advantage of the risks they take when they invest later on after the marketeers are already promoting the stock.

Good marketeer promoters have the uncanny ability to hypnotize stock traders, even professionals, into investing in OTC stocks at inflated prices.

OTC Risks Rewards: Trading Trends in Progress.

If an OTC company should gain major investor interest from super hot news over a couple months, the perceived value of such penny stocks would all of the sudden become more worth the while to even wealthy and professional investors. Not only that, but the added volume of trading generated by the promotions create the liquidity required for larger investors.

But, by then, the stock actually becomes riskier because the price of shares become inflated quickly by all the new investing. The chances of being caught with inflated shares means you are setting yourself up for needless risk of the stock plunging.

  • Quickly changing fundamentals,
  • Market Promoter Sell-Off - the Dump after the Pump,
  • Stock Basher Campaign - the Shorts,
  • Lack of News for a while,

all cause the shares to plummet in value. In fact, many times all four of these factors work together, and are related, to cause traders to sell.

OTC Risks Rewards:

Many professional and non-professional stock traders initially shy away from "risky" OTC stocks.

Naive or novice investors, just like professional traders, are primarily technical traders or half-baked fundamental traders. Such investors have a history of being stung by losses investing in penny stocks.

The initial perception is that OTC stocks have too much dirty baggage and cannot be safely invested in for profit.

OTC Risks Rewards:

The Extraordinary Investor

• takes Advantage of the initial lack of interest of most traders.

• are already award of these perceived risks and how they work.

• takes that time of investor inactivity in a stock to study it and then investing in high potential sleeper stocks before such stocks gain reputable media attention and marketeer involvement.

OTC Risks Rewards:

The Extraordinary Investor vs the Marketeer Stock Promoter

The extraordinary investor will take all the time necessary to study each company to find the sleeper OTC gems. Such investor knows those gems pay enormous rewards when the Marketeer promoting and news finally begins and the follower traders begin trading it. The stock must be promoted in due time.

OTC Risks Rewards:

The Mysterious Sixth Sense of Extraordinary Investing

You will know which stocks have the highest potential and which are the ones that will be promoted in due time because, through proper research as this site is showing you, and with experience, your mind develops the Mysterious Sixth Sense of Successful Penny Stock Investing. . .

You will possess a feel for those companies with the highest potential through Proper Knowledge and Experience, and be able to peer into the future of such companies with uncanny accuracy.

This is NOT difficult to do once you learn how to do it.

This site is showing you how to do this.

OTC Risks Rewards:

Taking Advantage of the Risk others Take

The Extraordinary Investor is first to invest in OTC stocks with exciting fundamentals thus paving the way for other investors to follow the lead.

OTC stocks are generally thinly traded, have far fewer shares outstanding, and thus far less liquidity than for stocks traded on the listed exchanges; so, a little extra trading volume could easily make share values surge quickly.

As the stock gains marketeer interest and promoting, the added trading volume of the thinly traded stocks means that the stocks are no longer as thinly traded, so the shares can be easily sold by the extraordinary investor when all the other greedy investors jump on the band wagon after you were already positioned.

You may have to wait a few months before the promoting begins, but if your research is correct, the stocks will gain the attention of marketeers

OTC Risks Rewards:

Penny Stock Debt is Normal

Sales and Net Profitability of a company is normally a key consideration when looking at companies to invest in, but not a serious consideration for the extraordinary investor.

OTC stocks, and that includes most developmental or exploration companies on any stock exchange, represent companies that do not usually make much profit if at all.

Debt accumulation far exceeds any profits made by such companies - usually. Most OTC stocks go millions of dollars into debt to fund product development and exploration.

The huge debt of penny stock companies, scares many investors and keeps them away. The Extraordinary Investor, therefore, has the best opportunity to target, study and purchase shares of super OTC stocks at their lowest prices before the stock is recognized for its super products in development and before they are promoted.

If a developmental company is making a net profit, or at least has products or services that are profitable, this sure makes the stock that much more appealing, but then this is likely already figured into the value or price of the shares on the technical charts, but not always.

For instance. . .

Foreign Firms, especially from Asia, that are traded on the US OTCBB or NASDAQ are hardly followed or taken seriously even by many extraordinary investors. But such foreign firms are usually gems that not only have exciting products in development, but are also making a profit!!! Yet, they are being traded like developmental companies with huge debt.

In time, those stocks will shoot up in value, but you may have to buy and hold for a few months until they gain the attention they deserve.

Also, as shares begin to rise in value, you will hold them longer - or more long term.

Why? Because such stocks rise slowly over a period of months as increasing numbers of investors jump on over a period of time.

The downside is minimal, and the upside almost guaranteed because these companies have growing market share and profits that make up for any debt incurred through product research.

OTC Risks Rewards:

Locating those Diamonds in the rough

A developmental company trading on the OTC may actually be NYSE, AMEX (NYSE MKT), or NASDAQ material in the making, or maybe it already is. Finding those stocks before others do is your job as an extraordinary investor.

If and when you do this, then you will minimize risks by investing early, and position yourself for huge rewards. You will become far wealthier far sooner than any other legal business. What would you do to make a million dollars?

OTC Risks Rewards:

OTC Stocks multi-million dollar budgets with huge debt is Inherently Risky - so invest short term!

Developmental stocks are involved in tens to hundreds of millions of dollars in development or exploration over a period of many years, so net profits are practically nil and huge debt is the norm. This is acceptable, but always monitor a potential stock for increasing market cap, and enough financing to continue operations for the next 12 months or minimum 6 months with great potential for additional funding from VIP's.

Check to see if such company has a history of receiving financing from 1 or 2 institutions. If those institutions are profiting and/or if they already have a huge investment in said company, chances are they will continue to fund the company on a solid novel product development rather than see all their investment lost.

Invest for the short term, no more than three months usually to avoid risks of long term financial issues.

OTC Risks Rewards:

Profitability is low and Debt is high with developmental and exploration companies.

These are low considerations for the extraordinary investor when investing in biotechnology, mining, and other new high demand technologies. This is true for penny stocks trading on the NYSE, NASDAQ, AMEX (NYSE MKT), TSX or the OTC.

What is important is intellectual property, management, alliances, partners, financial backing, history in operation, and all other positive attributes I list for exciting penny stocks.

All of these positive fundamentals are company assets that are more important than debt or profit. All these said fundamental assets work together to support the company as it develops said intellectual property into exciting products.

OTC Risks Rewards:

I will let you in on a little known secret when searching for stocks

Within a depressed sector of stocks, with the depressed or sleeper penny stocks, find penny stock companies with extremely novel high demand products in development and thrifty management and you will find that debt is not an important consideration unless the debt causes far reaching financial stress - debt that is over 10 to 15 times value of company assets, or even far above market cap for the stock with good financing in place.

Why not an important consideration? Consider an OTC stock with novel high demand products in development that all research so far shows is very safe and exceeds all products currently in use or being researched in the world.

In addition, this company has thrifty management... Such a company is likely gaining much interest by government, public and private organizations, and other similar companies, and by an increasing number of investors.

Such a company may be many years and hundreds of millions of dollars to go before such developmental products actually go into production. Such a company may start out with millions in debt and little market cap, but is not quickly overtaken by the debt. Why?

Because, an increasing number of investors with big pockets will buy up shares and stay invested for the long-term.

So, even though such company creates a number of shares per year to obtain financing on exceptionally favorable terms, there is always an increasing number of investors that keep share prices high, and that will buy up shares once cashed in by the financing company.

To keep shares at a manageable level and value of shares higher, the stock may reverse split it shares every few years. Such a tactic only works if investors perceive the stock is of great worth with products in development that are truly novel and exciting, and if the reverse split insures that stock remains listed.

Such a method of obtaining financing can be done repeatedly year after year with no long-term loss in share value; a win-win situation for everyone. But a nano-tech or micro-tech company can only do this for so long. . .

OTC Risks Rewards:

Repeated Financing involving creating shares of Good Stocks will get more risky over time.

Won't the number of shares created over repeat financing become excessive over time? . . .

'Excessive' is relative to a degree. If the perceived value of the stock continues to be exceptional, even if the company accumulates over 300 million in shares, that is not excessive, especially in a good economy as determined by its fundamental assets.

Besides that, infrequent reverse stock splits are a reasonable tactic to manage shares for a solid highly valued penny stock.

As the financing is achieved each year to obtain the needed capital, the number of shares likely created will have less percentage impact on the total number of shares outstanding especially if share values remain high or continue to escalate. Debt for such company will be minimal.

Repeated financing through creating shares can only be done for so long. Important considerations that make such financing risky involve lack of investor interest over time, resulting in the devaluation of shares.

If the devaluation plummets to fractions of a cent, the likely hood of a recovery becomes ever more dim. And a reverse stock split in such cases is not a very successful option, because investors take that as a negative sign.

OTC Risks Rewards:

Every stock is unique - do not generalize fundamentals onto similar stocks.

Fundamentals affecting each target stock must be analyzed and monitored for that stock. Do not generalize a similar penny stock with another and assume they both have equal fundamentals.

Assuming fundamentals that are not there and Reading-Between-The-Lines are totally different. . .

• When you read between the lines, you are considering all fundamentals and there most likely outcome in the face of present seemingly dreary or negative news.

• When you assume fundamentals that aren't there, you are making decisions based on flawed data. Your mind does not have all the pieces of the puzzle to make accurate decisions about likely future outcomes.

OTC Risks Rewards: Winning OTC Trades

In your search for high potential stocks, the great reward comes to play when your research discovers a thinly traded OTC company that:

• has a high demand developmental product or products in early or late stage development.

• studies show such products to be beyond the times in areas of great need or demand and safety.

• Patents on said products are good for at least 10 yrs, or add-on qualities extend the patent date.

• No competitors developing a product quite like it - easy to search for competing products.

• has thrifty management.

• is gaining solid interest by private and public sources.

• has agreements with one or more good financial partners.

• is financially still viable for at least six months.

• the economy is growing and investors are optimistic

• Stock is not being heavily promoted by marketeers

• Has not yet gained serious investor attention

• Still trading near historic lows.

• Little history of reverse stock splits, and none likely anytime soon.

These are the ones I watch and study for super trading opportunities.

• Not all of these high potential stocks will be so fortunate to obtain a good financing partner, but most will.

• Not all such super stocks will succeed in the long-term, but I will take advantage of the short term rocket trends created by marketeer involvement or other exciting company and media news.

When such exciting stocks also provide timely and good communication to its shareholders, you can be sure such a stock will gain interest with major players.

Likely one or more VIP's will jump in to invest in the company or even buy it out, or partner with them on an exciting product. Such VIP investing is considered a good sign by many other penny stock investors, which will escalate buying activity in such stock.

OTC Risks Rewards: Reading Between The Lines

Understanding the potential of such companies, even when present news or reports look grim, is called "Reading Between The Lines" of fundamental data.

Example of Reading Between the Lines

A company is running out of funds, and is accumulating debt. The recent SEC financial reports for the company gives a grim picture. . .

The fundamentals may say nothing about the company possibly receiving financing, but when you look at what the company and its history of past financing, alliances and interested agencies, and when you consider management and its products in development, you can read into it that the company will almost definitely obtain the financing it requires on exceptional terms.

Many investors may already have heavy positions in the company. As long as the company is still on track and product development is exciting, investors will eventually come forward to finance debt; it's in their best interests.

So, even though the stock plunged in value on recent grim financial news, the extraordinary investor will take this opportunity to load up on shares of that stock if the fundamental assets of the company give solid reason for optimism. This is called, Reading Between the Lines.

For this scenario to work in favor of the Extraordinary Investor, the financially distressed super stock must be trading at near historic lows. And this is not uncommon. Stocks that are having financial difficulty, even if superior, will many times be dumped by investors in the short term. However, when you look at the history of these superior companies and its partners, the most likely outcome is that they will obtain the financing in a decent economy.

So, while other investors sell, you would want to purchase shares at all time low share values - which will limit downside risk in case things go bad, and also set you up for a fantastic explosive trade upward.

If you, the investor, understood and invested on this future knowledge ahead of time before most other investors took notice, then the potential surge in future trade activity could make you a 30% to to well over 300% profit in a very short time.

This kind of stock activity is not uncommon for OTC stocks. This is the OTC Risks Rewards ratio of successful penny stock trading as an extraordinary investor utilizing the strategy called, Reading Between the Lines.

YES!!! you usually will be in the minority of investors who study these unknown gems and invest in them weeks before most investors know what is going on. Then you just wait for the tide to come in.

OTC Risks Rewards:

You will not make money being a follower

You will most likely lose on most trades or barely break even if you play follow the leader with penny stocks. You must learn to take the lead if you want to make the big money. That is what this site is showing you how to do. That is a secret of success.

Technical Traders are, by their very nature, followers as well, because they invest on technical signals that every other technical trader is also trading on - on technical signals created by other traders. Such investors have little awareness of the history of the company, its financing, or its products.

Following the leader for trend trading may work for larger cap stocks with growing product sales and profits, but are useless for trading nano-cap rocket stocks of companies with no products yet being sold, and with huge debt.

OTC Risks Rewards:

No When to Fold Them

Penny stocks on the OTC and NASDAQ are both susceptible to huge profit potentials like this. But OTC stocks are more prone to quick 30% to 300% surges in stock prices that will last for an hour, a day, a few days to a few weeks.

You will know when to sell to lock in profits before stocks settle back down. Share prices unable to top recent highs is a good signal to sell.

Note that, when you see what appear to be breathers in the rocket stock trend upward, this is not a time to add to your position like trend traders do.

Why? Usually because in most circumstances the stock will trade lower after the huge spike. Technical sell signals in conjunction with fundamentals and experience will help you realistically gauge when to sell. This information should be secure in your mind of understanding.

OTC Risks Rewards:

Stocks delisted from Stock Exchanges

Keep in mind that a fair number of companies that were once traded on the major exchanges are now traded on the OTC - at least some of these are great companies with great products in development that hit a minor or major bump and thus de-listed. Such high potential companies have the capability of recovering and reaching those highs in share values in the future.

OTC Risks Rewards:

Tie in the Strategies for Extraordinary Success

Strategies of successful investing were tied into this page from other pages on this site to help you understand and better calculate the OTC Risks Rewards realities. My desire is to help your mind recollect and understand how this all works together, and how important all these strategies are to create successful trades.

Other important variables were considered elsewhere that help guarantee low risk, high profit returns. For instance, you learned about market and stock trends, public perceptions, fads, investment philosophy, stock screening, stock lists, and so much more.

All this other knowledge previously covered in earlier topics and subtopics is absolutely required to trade rocket stocks successfully.

Once again, this other knowledge was all covered in earlier topics on this site - all here for free, provided for your benefit.

Studying these topics and pages on this site is not difficult, but is extremely necessary to avoid risks and set yourself up for huge consistent profits year after year.

You have completed this lesson on:

OTC Risks Rewards

You have also completed this Topic on Technology Stocks.

You are nearing completion of the Extraordinary Strategies of Penny Stock Investing.

When You are ready, please continue on to the next very critical lesson: Penny Stock Broker

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