Learn To Trade Penny Stocks - Penny Stock Trades
Learning to trade penny stocks effectively can be very lucrative.
Penny stocks can also be extremely risky if you don't know what you are doing. Golden rule: Never fall in love with a penny stock.
You might be asking- What is a penny stock? A penny sock is considered any stock trading on the pink sheets or otcbb.
Penny stocks are risky and require research. Alot of the companies trading penny stocks have limited information and histoey. Often they are just shell companies. A shell company is an actual company but does not have assets or actually do business.
You might be asking why people are attracted to penny stocks if there is so much risk involved. The reason is simple- there is alot of money to be made if traded correctly. Penny stocks can run up real quick- Often this is done by pump and dump schemes. This basically means a bunch of people get together to promote a stock with false expectations of what company is planning to do etc. They feed investors a bunch of fluff basically. They run the price up, sell the stock than dump the stock. This leaves alot of what you call bagholders (People who bought into the stock at the height of the run) Now, if you bought at the low end and sold at the high end than you made out. You pretty much should take your profits and move on to the next penny stock.
For example- One of my most recent and lucrative penny stock trades was of a stock with the symbol TPHM. I bought 2 million shares at .0003 share price (which cost me $600.00 plus the $9.99 fee for the transaction from etrade) A week later, the stock ran to a high of .0045 (Note: I sold at .0039) I made $7800.00 less the $9.99 etrade fee so I profited $7200.00 off of my $600.00 investment (less etrade fees) and actually, that was a mistake on my part (a pleasant mistake) When I bought TPHM, I forgot to preset my sell order (which I always do). I usually set my sells ahead of time. (mind you, I play alot of penny stocks at one time). I usually set them where I will double my money than I get out (this usually leaves me profiting a few hundred dollars a trade) I learned this the hard way, when I first started trading penny stocks in 2005, I had the get rich mindset where I would buy lots of shares and hold onto them with the expectations of making thousands and thousands of dollars all the time. Needless, to say I lost my initial investment in 2005. As I do with everything else in my life, I went on a mission and researched so much on penny stocks and trading because I was mad that I lost my money and I wanted to make my money back. I am glad I stuck with it but I did learn the lesson of NEVER falling in love with a penny stock the hard way.
I always do my due diligience before investing in any penny stock and only play a few hundred dollars at most on any given one. Some of the factors to look for when learning to trade penny stocks is to research the company (Pinksheets.com is a good place to start. You can find alof of info there) Learn to read charts, Know the history of reverse splts for that stock, outstanding share number, authorized shares, read any recent company filings etc. Visit the company's website (You can get alot of this info from pinksheets)
Penny stocks are cheap, alot more volatile which gives the opportunity for a much higher ROI (Return on Investment).
I never recommend trading penny stocks unless you know what you are doing.
You can make alot of money by just investing a little but you need to know the stocks to pick, the ones that are poised to run and most of all, know when to sell. Don't fall in love with a stock and DON'T GET GREEDY. Keep reinvesting and make alot more over the long run.
As Kenny Rogers sang in his gambler song (Know when to hold them and know when to fold them) because basically, Penny stocks are a gamble
Learn to trade penny stocks
See video here of penny stocks picked and watch what happened in just 2 days
Article Source: ArticlesBase.com
