There is no guaranteed way to buy and trade Penny stocks. I mean there is no specific written down guide of one way being better than another. You could probably ask 10 expert traders and get 10 different answers. The problem is that stocks are very unpredictable, so therefore anyone that plans on doing any kind of day trading should do there research before jumping in to deep. Traders should do there homework on the company’s that they are preparing to invest in.
What kind of companyies are associated with penny stocks?
Penny stock companies are typically young company’s that can grow at an extremely rapid rate. The best penny stock companies grow fast, sometimes having their earnings or revenues rise by 50, 100, or even 1000 percent or more every year. Even Microsoft was once a penny stock, so was Walmart, and look were the are today. There are real undiscovered gems out there. Analysts don’t usually watch these types of stocks generally, so good companies can be dramatically under priced. These days, big stocks are just as risky as penny stocks but they don’t have nearly the same profit potential. Most experienced players will tell you the potential gains possible with these stocks far outweigh the risks. You can avoid or minimize losses and almost certainly have the opportunity to cash in huge gains. Many major companies today fought their way up the ranks and investing in these types of stock gives you a chance to share in great success.
So Why Should You Invest in Penny Stocks?
There are reasons to invest in these type of stocks and expert wisdom that cautions avoiding in these securities. Penny stock is considered a “hot stock” when its value is quickly rising. These stocks are considered “high volatility,” meaning that their value can quickly go up or down. They are the opposite of a safe investment. In order to make money on these stocks, one has to., wait for the stocks to precipitously rise, and then sell. There are also books, trade magazines, newsletters, websites, message boards, and a plethora of other advice out there. No matter what medium is chosen for advice on which stocks are the best, one strategy works for them all. Take six months or so and “pretend” to invest. Keep track of how much each stock goes up or down and make decisions on when to buy or sell just like it was a real investment. If, after the six month period, the particular source of advice leads to profit more often than losses, it may be best to stick with it. If not, a new source of advice to pick these types of stocks may be in order.
