ONE NOTE: I OWN NO ARTH AND WILL NOT BE INVESTING OR PROMOTING IT. I have nothing against them, I just cannot be giving you tips on how to play it correctly and then go in the market either with you are against you. Nobody is paying me for this. These are my suggestions on how to play it – if you do play it.

You need to understand the historical chart for other similar traders. Understand the fact that many that never trade penny stocks are buying in to this one. That means you have to understand that there are ups, more ups, then downs, another up or two, and then a potential for a spiral.

A TALE OF TWO CHARTS (THREE, ACTUALLY)

Here are two charts.  One was a mailer I recieved a few week back for XUII.  The other is for a “famous” promo stock that had its run about 18 months ago.  Let’s start with XUII:

You can see from the chart when the original mailer went out – the bold volume bar below the May date. Then you see the stock slipped a bit and then a big more. Finally it staged a come-back. That’s the good story of what can happen. This is about five months of its trading.

NEXT: AN EXAMPLE OF WHAT CAN GO WRONG