All right, I get it. You’re excited to make money by investing in penny stocks. Perhaps, you even found a profit potential or are already earning yourself.
While it’s true that you can achieve substantial returns in trading penny stocks, these common shares of small public companies also have a reputation for burning investors. The reason why is that they tend to fluctuate a lot quicker.
Still, it did not stop people from buying and selling penny stocks since there’s that allure in the market. These stocks also promise big profits and don’t cost much money!
But before one becomes successful in penny stock trading consistently and for the long term, a trader makes many dumb mistakes first. Eventually, they learn from them or create rules on what to do and what not to do later.
If you want to shorten the learning curve and be successful in penny stocks trading, there are books you can rely on. All you have to do is take advantage of these works.
After all, knowledge is power, and it applies to penny stock traders too!
Trading Penny Stocks 101
But before I give you my top recommendations for the best penny stock books, it’s better to discuss the basics of penny stock trading.
Based on the Securities and Exchange Commission (SEC), a penny stock is any security trading below $5.00 per share.
In other words, they’re micro-cap stocks: the shares some companies trade for low amounts. It also does sound cheap (I mean the cost). Plus, it requires simple math, which is why many new investors are willing to leap in quickly.
Most new companies may have established a successful business track record or have a small market capitalization. Although the allure of investing is small, the possibility of making significant returns exists. Remember that it’s also easy to lose your money.
Suppose you’re trading on the margin because of the volatility of penny stocks; you must understand the market and be familiar with trading strategies because you risk your hard-earned money.
Now, are you ready to learn about penny stock strategies? Here’s a list of books on penny stocks to add to your shelf full of hope as this year flies by:
Best Books on Penny Stocks – My Top 12 Recommendations
1. The Complete Penny Stock Course by Jamil Ben Alluch
Jamil Ben Alluch has done a great job in this book titled, The Complete Penny Stock Course: Learn How to Generate Profits Consistently By Trading Penny Stocks. He starts by welcoming you to the world of penny stocks, which he refers to as the “outcast in the field of finance and the stock market.”
He also warned his readers that penny stocks are why countless traders venturing into penny stocks encounter their financial demise because of the unpredictable journey. However, he also acknowledged that some people achieved “insanely high levels of success.”
And that is what Jamil wanted to share with you, readers!
Even Timothy Sykes, who forewords the book, shared that Jamil is one of his “promising” Trading Challenge students. According to Sykes, what was a time-consuming process of checking new information throughout the trading day can now be accomplished with a few clicks of the mouse. And it’s all thanks to Jamil’s program.
More importantly, that was when he recognized Jamil’s “talent and ingenuity.” “He took it upon himself to organize and structure all my teachings as only a martial arts-trained engineer could,” Sykes shared.
Today, Jamil’s book is where readers can learn penny stocks trading and how not to become a part of the 90% who lose money in the stock market.
In addition, it teaches you to consider Syke’s profit-making strategies and other techniques on day trading penny stocks to become a consistently profitable trader.
2. An American Hedge Fund by Timothy Sykes
And speaking of Timothy Sykes, I also recommend reading his book, An American Hedge Fund: How I Made $2 Million as a Stock Operator & Created a Hedge Fund.
The author himself inspires people who want to make it big by investing in penny stocks. Furthermore, the book discusses how he turned his $12,000 Bar Mitzvah gift money into $1.65 million by trading stocks from 1999 to 2002.
To know more about Timothy Sykes’s trading strategy or Tim as a penny stock trader, read my full Timothy Sykes review here.
3. How to Day Trade Penny Stocks for Beginners by Bill Sykes and Timothy Gibbs
The book “How to Day Trade Penny Stocks for Beginners: Find Out How You Can Trade For a Living Using Unique Trading Psychology, Expert Tools and Tactics, and Winning Strategies” is informative, especially for someone who knows practically nothing about day trading penny stocks.
How the author wrote it ensures that beginners can handle the technical details of stock trading. I highly recommend this book if you want to quickly day trade even without previous experience in complex mathematics.
4. Iron Condor Options for Beginners by Freeman Publications
Okay, don’t let the term intimidate you. There’s a book to guide you on what this thing is.
Although the book “Iron Condor Options for Beginners: A Smart, Safe Method to Generate an Extra 25% Per Year with Just 2 Trades Per Month” was advertised for beginners, I don’t think it is for one. Instead, it’s also for those a little more advanced than beginners in stock trading.
Yet, I cannot deny that this is a well-organized book with great insights and perspectives about an options strategy called Iron Condor (designed to profit even from low volatility), where you’re selling two options and buying two options (for protection).
To learn more about this trading strategy, why not grab the book? But whether it will work out well with a small stock, as a penny stock, is for you to also learn along the way.
5. Trend Following (Updated Edition) by Michael Covel
The author behind the book The Complete TurtleTrader, Covel, has yet again created a masterpiece titled Trend Following (Updated Edition): Learn to Make Millions in Up or Down Markets.
While reading the book, I like Covel’s perspective on how to grow one’s wealth as he focuses on the psychology and the philosophy behind trading.
In Chapter One, you will see how people view stock market trading. And with that, you can adopt the mindset of successful traders and model their success. It’s not a “how-to” book, but it teaches you “why” the best trading practices are effective.
6. The Daily Trading Coach by Brett Steenbarger
Suppose you’re eager to learn more about penny stocks trading and committed to success. In that case, you will not be disappointed by reading The Daily Trading Coach: 101 Lessons for Becoming Your Own Trading Psychologist.
This book does not solely focus on penny stock trading. Instead, it provides lessons on how you’ll identify daily challenges in pursuit of rewards and how to approach them.
As a Clinical Associate Professor of Psychiatry and Behavioral Sciences, Steenbarger has done a great job writing this book. I enjoy the chapter on trading mindsets, in particular. There are also good tips on keeping your penny stock trading healthy.
I also believe this is a must-read, regardless if you’re a beginner, an intermediate level, or already a professional trader.
7. Penny Stocks For Dummies by Peter Leeds
In the Penny Stocks for Dummies book, Peter Leeds guides you on identifying growth trends, grasping the basics of penny stock investments, making smart investment choices, and finding penny stocks nobody watches. Or should I say, undiscovered penny stocks?
If you can find these penny stocks first before anyone else, it can make you rich or even become a millionaire. Moreover, the book is a friendly guide and has been expanded and updated since its last publication. Since it’s updated, there is new information, tools, and advice about the market sectors and the penny stocks.
I’m not even surprised why Leeds is also called The Penny Stock Professional. The book contains information, especially if you want to analyze a buy and hold on a penny stock.
8. The Small-Cap Investor by Ian Wyatt
The Small-Cap Investor: Secrets to Winning Big with Small-Cap Stocks is another book I recommend to penny stock traders, beginners, or even experts.
This good read will help you grow your investment portfolio and learn how to invest or trade with only less or no risk. You will learn what high-quality stocks you should invest in and which stocks you should avoid as a day trader.
9. Penny Stocks by Pete Manlow
The Penny Stocks: A Quick and Easy Guide for Beginners to Start Investing is a good beginner’s book, and I recommend it to someone who has not gotten around to what penny stock trading is.
The way penny stock investing is explained in this book is simple, and the subject is clear and concise too. You’ll find some popular penny stock trading styles and how to start with each quickly.
In addition, there’s information about technical analysis and how to use it to make the type of penny stock trading you want.
10. The Guide for Penny Stock Investing by Donny Lowy
Dedicated to novice and experienced investors, The Guide for Penny Stock Investing provides trading and investment strategies used by professional penny stock traders and the author himself.
Lowly has done a great job with his clear writing (straightforward) and shared real-life experiences that happened to him as an investor. There’s also an elaborate strategy section. The techniques will help investors like you in slow and strong markets.
I enjoyed reading this book, and I think you will too!
11. Penny Stock Trading: QuickStart Guide by ClydeBank Finance
Written by a team of financial advisers, the Penny Stock Trading: QuickStart Guide is also an exciting read. The book explained some penny stock vocabulary, which will be helpful.
It begins simple and then gradually builds advanced topics. Nevertheless, it’s a quick read and not boring at all. In this book, you’ll learn how to shop for penny stocks using financial investment metrics, including price-to-sales, price-to-book, and market capitalization.
You’ll also learn how to assess the growth patterns of stocks and gain knowledge on how to perform fundamental and technical analysis of a penny stock before buying it.
Are you interested to know more about technical analysis? I’ve also listed some of the best technical analysis books you must read to become a pro.
12. Penny Stocks by Jordon Sykes
If you want more advanced information on penny stock trading, read the Penny Stocks. This book includes Penny Stocks, Penny Stocks Strategies, and Penny Stocks Advanced.
In Chapter 1 of this book, you’ll learn penny stock basics. Chapter 2 would be concepts, Chapter 3 is analysis techniques, and Chapter 4 explains how to become a penny stock pro.
Of course, the information does not end there. You’ll also learn about risks and rewards, problems with liquidity, short-term investing, as well as long-term investing.
This book (from the title itself) explains how a trader should avoid risky penny stocks.
Conclusion: Are These Books Worth Reading?
It’s possible to earn money trading stocks or become successful as a penny stock trader, but such is the case if you understand the game. And what better way can you thrive and make an excellent return on investment than knowing from experts themselves?