How to Invest in Penny Stock - Hot Tips for Everyone
Ahhh...
the lure of Penny Stocks (small stock).
They truly are one of the most legitimate ways to get rich quick.
But as with anything that involves traveling down the road to fast riches, there are risks.
And in the market of speculative trading-- the risks are high, but fortunately the rewards are too! So what is all the ruckus about the Penny Market anyway? Maybe you have never traded with smaller stocks.
Or worse, perhaps you bought a few and failed miserably.
Whichever category you fall into, just know that while there are similarities between smaller stocks and the larger (blue chip) ones, you are in for a bumpy ride if you don't get the right information before you invest.
This is why almost 97% of Penny Traders lose.
Let's make sure you are NOT one of the casualties.
Technically,these small stocks are options that trade for under $5 a share.
First of all, you should know that most of them trade on the Markets like Pink Sheets, Over The Counter, NASDAQ SmallCap and Canadian Venture Exchange.
These types of investments are highly speculative because they are mostly start up companies or businesses that don't have a long history of available information.
In other words, you can not analyze ABC START-UP like say a company such as FORD MOTORS.
However, this is the very thing that makes them so appealing.
Penny Stocks make their gains by the hundreds and thousands of percentages, not by the tens like GE.
The Following are Imperative to Consider When Learning How to Invest in Penny Stocks.
1.
Get a Good Broker.
You have to start somewhere and this is where it all begins, you can not make any money without a Broker because you can't trade until you have an account.
You will need to investigate discount brokerage houses because they have the lowest per trade costs.
Do this now because you can not trade until you open up an account.
Be aware that this process can sometimes take up to 5 business days.
2.
Get familiar with the terms of the Trade-- Technical Analysis, Volatility, Spread, Acquisition Targets, Market Capitalization, Limit, Margin, Fundamental Analysis, Technical Analysis, Risk/Reward Ratio, Open Order, Ease of Acquisition, company life cycle, economies of scale, irrational spikes and profit opportunities are just a few.
If you know what all of these terms mean then good for you! If you don't, you probably want to consider looking for a reputable Penny Stock Advisor [http://ezinearticles.
com/?Can-A-Computerized-Penny-Stock-Advisor-Really-Identify-A-Hot-Penny-Stock-Pick?&id=857299] or signing up with a Newsletter or Forum.
It's your money and you want to make the most of your investment, so do your homework! 3.
Decide what type of Investor you are--Whether you are looking to just have some fun and take a gambling like approach, or maybe you want to trade full time--either way, you need to write down your goals.
People who care enough to write down their goals and give themselves a time frame to achieve them are much more likely to succeed at Penny Trading than those who are too lazy to take this step.
Do it Now! Be a Winner! 4.
Learn how to analyze the Smaller Stocks-- As I said before, because the amounts of information available on this type of stock is limited, you must perform as much research on your stock as possible.
Remember the types of analysis that work on Blue chips won't work for your Speculative Stocks.
First, identify your stock by looking at things like Revenues, Increased Earnings, Debt levels, Management, and Press Releases.
You also want to look at dips and spikes in the stock price.
Another important factor to consider is insider trading which if researched properly can be very helpful, but in some cases it is to depended upon for novice investors.
5.
Start Trading- Become a member of a Newsletter or Forum.
There are many Investor Clubs out there too.
Look at the Stocks that are being talked about in these forums and perform your due diligence on each one.
A recent Hot Penny Stock Tip That I received netted me $300 on a $500 investment, that was the easiest money I have ever made!
the lure of Penny Stocks (small stock).
They truly are one of the most legitimate ways to get rich quick.
But as with anything that involves traveling down the road to fast riches, there are risks.
And in the market of speculative trading-- the risks are high, but fortunately the rewards are too! So what is all the ruckus about the Penny Market anyway? Maybe you have never traded with smaller stocks.
Or worse, perhaps you bought a few and failed miserably.
Whichever category you fall into, just know that while there are similarities between smaller stocks and the larger (blue chip) ones, you are in for a bumpy ride if you don't get the right information before you invest.
This is why almost 97% of Penny Traders lose.
Let's make sure you are NOT one of the casualties.
Technically,these small stocks are options that trade for under $5 a share.
First of all, you should know that most of them trade on the Markets like Pink Sheets, Over The Counter, NASDAQ SmallCap and Canadian Venture Exchange.
These types of investments are highly speculative because they are mostly start up companies or businesses that don't have a long history of available information.
In other words, you can not analyze ABC START-UP like say a company such as FORD MOTORS.
However, this is the very thing that makes them so appealing.
Penny Stocks make their gains by the hundreds and thousands of percentages, not by the tens like GE.
The Following are Imperative to Consider When Learning How to Invest in Penny Stocks.
1.
Get a Good Broker.
You have to start somewhere and this is where it all begins, you can not make any money without a Broker because you can't trade until you have an account.
You will need to investigate discount brokerage houses because they have the lowest per trade costs.
Do this now because you can not trade until you open up an account.
Be aware that this process can sometimes take up to 5 business days.
2.
Get familiar with the terms of the Trade-- Technical Analysis, Volatility, Spread, Acquisition Targets, Market Capitalization, Limit, Margin, Fundamental Analysis, Technical Analysis, Risk/Reward Ratio, Open Order, Ease of Acquisition, company life cycle, economies of scale, irrational spikes and profit opportunities are just a few.
If you know what all of these terms mean then good for you! If you don't, you probably want to consider looking for a reputable Penny Stock Advisor [http://ezinearticles.
com/?Can-A-Computerized-Penny-Stock-Advisor-Really-Identify-A-Hot-Penny-Stock-Pick?&id=857299] or signing up with a Newsletter or Forum.
It's your money and you want to make the most of your investment, so do your homework! 3.
Decide what type of Investor you are--Whether you are looking to just have some fun and take a gambling like approach, or maybe you want to trade full time--either way, you need to write down your goals.
People who care enough to write down their goals and give themselves a time frame to achieve them are much more likely to succeed at Penny Trading than those who are too lazy to take this step.
Do it Now! Be a Winner! 4.
Learn how to analyze the Smaller Stocks-- As I said before, because the amounts of information available on this type of stock is limited, you must perform as much research on your stock as possible.
Remember the types of analysis that work on Blue chips won't work for your Speculative Stocks.
First, identify your stock by looking at things like Revenues, Increased Earnings, Debt levels, Management, and Press Releases.
You also want to look at dips and spikes in the stock price.
Another important factor to consider is insider trading which if researched properly can be very helpful, but in some cases it is to depended upon for novice investors.
5.
Start Trading- Become a member of a Newsletter or Forum.
There are many Investor Clubs out there too.
Look at the Stocks that are being talked about in these forums and perform your due diligence on each one.
A recent Hot Penny Stock Tip That I received netted me $300 on a $500 investment, that was the easiest money I have ever made!