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 strong returns in trading penny stocks, these common shares of public small companies also have a reputation of burning investors. The reason why is because 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, wherein penny stocks promise big profits and they don’t cost that much money!
But usually, before one becomes really successful in penny stock trading consistently and for the long term, a trader makes a bunch of dumb mistakes first and eventually learns from them or creates rules on what to do and what not to do later on.
If you want to shorten the learning curve and be successful (not to a point of becoming a millionaire trader quickly… You know, easy come, easy go) 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 of the best penny stock books, it’s better to shortly discuss the basics of penny stock trading.
If we based on the definition of the Securities and Exchange Commission (SEC), penny stock is any security trading that is below $5.00 per share.
In other words, they’re micro-cap stocks: the shares that some companies trade for low amounts. It does sound cheap (I mean the cost) plus it requires simple math, the reason why many new investors are willing to quickly leap in.
Most of these companies are new, may not have yet established a successful business track record, or have a small market capitalization. Although the allure of investing small but the possibility of making big returns is there, remember that it’s also easy to lose your money.
More so if you’re trading on the margin because of the volatility that is related to penny stocks. That is the reason why you have to understand the market and know 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.
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 (The Complete Penny Stock Course: Learn How to Generate Profits Consistently By Trading Penny Stocks) and he begins it by welcoming you to the world of penny stocks, to which he refers to as the “outcast in the field of finance and the stock market.”
He did warn his readers that penny stocks are the reason why countless traders venturing in penny stocks encounter their financial demise because of the unpredictable journey. However, he also acknowledged that there are people who were able to achieve “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. Timothy Sykes said that what used to be a time-consuming process of checking new information all throughout the trading day can now be accomplished with few clicks of the mouse. Thanks to Jamil’s program, he said.
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,” Timothy Sykes added.
Today, Jamil’s book titled The Complete Penny Stock Course 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.
The book 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 would also recommend you to read his book An American Hedge Fund: How I Made $2 Million as a Stock Operator & Created a Hedge Fund.
The author himself is an inspiration for people who want to make it big investing in penny stocks. The book discusses how he turned his $12,000 Bar Mitzvah gift money into $1.65 million by trading stocks from 1999-2002.
If you want to know more about Timothy Syke’s trading strategy or Tim as a penny stock trader, you may want to read my full Timothy Sykes review here.
3. How to Day Trade Penny Stocks for Beginners by Bill Sykes and Timothy Gibbs
The book titled “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.
The way it was written ensures that beginners will not be overwhelmed with the technical details of stock trading.
If you want to quickly day trade even without previous experience of complex mathematics, then I highly recommend this book for you.
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. Personally, I think it’s for those a little more advanced than beginners in stock trading.
Yet, I cannot deny that this is a well-organized book and has some great insights and perspectives about an options strategy called Iron Condor (designed to profit even from low volatility). You’re basically selling two options and buying two options (for protection).
To learn more about this trading strategy, why not grab the book? But as to 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 1 alone of this book, you will already have a picture of how people view stock market trading and with that, you can adopt the mindset of successful traders as well as model their success.
It’s not a “how-to” book but teaches you “why” the best trading practices are effective.
6. The Daily Trading Coach by Brett Steenbarger
If you’re so eager to learn more about penny stocks trading and are committed to being successful in it, then you will not be disappointed by reading The Daily Trading Coach: 101 Lessons for Becoming Your Own Trading Psychologist.
But hey wait, 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 himself, Steenbarger has done a great job in writing this book. I enjoy the chapter on trading mindsets, in particular. There are also good tips on how you can keep your penny stock trading healthy.
I 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 how to identify growth trends, grasp the basics of penny stock investments, make smart investment choices, and find penny stocks that nobody is watching. Or should I say, undiscovered penny stocks?
That’s because if you have the ability to find these penny stocks first before anyone else, it has the potential to make you rich or even become a millionaire.
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 is full of 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 also another book I would recommend to penny stock traders, beginners, or even experts.
This book is a good read and will help you grow your own investment portfolio and help you learn how to invest or trade with only less or no risk. You will learn what high-quality stocks you should be investing 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.
Inside you’ll find some popular penny stock trading styles as well as how to get started with each as quickly as possible. There’s also information about technical analysis and how you can use it to make the type of penny stock trading you wanted.
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 experienced penny stock traders and the author himself.
Lowly has done a great job with his clear writing (very direct) and he shared real-life experiences that happened to him as an investor. There’s also an elaborate strategy section. The techniques there are meant to help an investor like you both 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 interesting read. The book explained some penny stock vocabulary, which I think will be useful.
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 by utilizing financial investment metrics, including price-to-sales, price-to-book, as well as market capitalization.
You’ll also learn how to assess the growth patterns of stocks and you’ll gain knowledge on how to perform fundamental and technical analysis of a penny stock before buying it.
Interested to know more about technical analysis? I’ve also listed here some of the best technical analysis books you must read to become a pro.
12. Penny Stocks by Jordon Sykes
And if you want a little more advanced information on penny stock trading, then I suggest you read the Penny Stocks. This Book Includes Penny Stocks, Penny Stocks Strategies, 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 you can become a penny stock pro.
Of course, the information does not end there. You’ll also learn risks and rewards, problems with liquidity, short-term investing, as well as long-term investing.
Overall, this book (from the title itself) does a great job of explaining 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 a nice return of investment than knowing from experts themselves!