What are the pros/cons of penny stock message boards/chat rooms? One the one hand, message boards and chatrooms can be quite useful but on the other hand are be full of bad information. Should you pay attention to them at all? Read on to find out.
Message boards, forums and chat rooms are places where you can gain good insight into what is trending and on everyone’s radar. In other words, find out which stocks are hot and talked about. This is solid information you can make use of. Trending stocks often become self-fulfilling prophecies because traders buy/short them in anticipation of the crowd trend.
The last thing you want to do is rely on any ‘hints and tips’ from message boards and chatrooms. You don’t know who’s providing this and in 99% of cases is pure rubbish. There are a lot degerates hanging out in these places so definitely don’t take any advice – just use them to gain an insight into hot stocks which may in play.
Always make sure you do your own homework before trading. Don’t rely on any tips from anyone in message boards and chat rooms!'Message boards and chat rooms have their benefits if you use them carefully' Click To Tweet
Messageboards and chat rooms are full of trolls and losers. They contain people generally trying to talk up their trades with no proof whatsoever. Read about Jonathan Lebed if you still think you can trust people in these places. He was prosecuted at 15 (!) by the SEC for stock manipulation setting up multiple fake accounts & pumping up stocks he held.
Two free chat rooms I recommend are StockTwits and The Lion. TheLion has a cool feature where it aggregates stock mentions from a number of chat rooms. Tim Sykes and Investors Underground also have moderated chat rooms however these require a subscription.
What do you think? Are there pros/cons of penny stock message boards/chat rooms? Drop me a line and let me know which chat rooms and message boards you use, if any.