OTC Trading Trade Secrets

The Secret of trading succesfully on the OTC, like in any other market is information. And, of course, the internet is the way to find that information. Once you have superior information to other traders in the market, making money is just a matter of using what you know. Accurate numbers are everything for fundamental analysis of stocks traded on the OTC BB. Bulletin board or big board stocks are almost always companies either on the way up or on the way down.

Good information will let you tell which are which, and what to do. If you know the earnings and the price of a OTC stock, you know enough to make a guess as to its real value. If you also know the history of the company, how much it pays its managers, and what the earnings reflect you know enough to make an informed buy or sell decision.

The earnings can either reflect consistent profitable business activities, one time fluke events, or worst of all discontinued operations where the company made the money it is showing as earnings by selling off it's income producing assets. One time contracts, and court decisions can also skew the earnings numbers away from being representative of the actual value of a bulletin board, or big board, or pink sheet stock. Trading the OTC is smart if you have the rright information and know how to interpret it, but it's a waste of time and money if you are just guessing.

Same, of course, goes for the AMEX, NYSE, and Nasdaq stocks. Information is King in the stock game, and if you have the right information you can trade anywhere from a Chinese peasant fish market to the NYSE and make a profit. Knowing what something is worth, buying it below its true worth, and selling it at or above its true worth has been the basis for all kinds of trading for thousands of years.