Penny traders believe that Market Makers (MM) will "signal" moves in advance buy using small amounts of buys or sells as "signals". The "signals" are such a small amount of shares (worth no more than 5 or 10 dollars) that no trader would have paid a commission that costs more than the amount of shares bought. The "signals" are from one MM to another.
100 - I need shares. 200 - I need shares badly,but do not take the stock down. 300 - Take the price down so I can load shares 400 - Keep trading it sideways. 500 - Gap the stock. This gap can be either up or down, depending on the direction of the 500 signal. 911 - Pending News
Most of these rumors are made up by people who are trying to manipulate others into buying worthless crap. If Market Makers wanted to "signal" each other they could just use any number of messaging systems like a phone or Discord, not a system so easy to understand that penny stock investors figure it out. It's pure non-sense to think they would use a system like this.
Just from a quick google search you can see there are no real sources for these rumors, outside people who try to sell penny stocks to suckers with such legitimate sounding titles like "Penny Runners".
Easy game here:
- Buy a bunch of shares in some illiquid garbage company. - Buy 911 shares in that same company - Take a screenshot of your trade. - Post the screenshot and say "OMG guys the MM's are signaling that news is coming!!!" - Sell your stock to anyone that falls for this
All these rumors and stuff that get propagated about how penny stocks trade generally serve one purpose - to screw people who believe them out of their money. Most of the money made in penny stocks by anyone (both companies and traders) comes from defrauding others through trickery and lies.
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