What Are Penny Stocks and Penny Stock Trading
Penny Stocks business is the most ancient and outstanding frame where trading has been appeared on solitary growth up to 200% and conducting business through OTCSTOCKPICKS and Pink Sheet markets for many years and this is our sweet spot for success.
What Are OTC’s and Penny Stocks
Penny Stocks, OTC’s, Micro-caps by definition trade for less than $5.00 a share. These stocks can trade near $5.00 to well under a $0.01 per share (sub-penny). Like the larger exchange companies, these very tiny companies remain publicly traded entities, but use the smaller public markets (OTC or Pink Sheets) to raise money to fund their large capital business needs. Penny stocks are traded on the Over-The-Counter (OTC) Market or Pink Sheet markets and don’t trade on the larger exchanges because they did not meet standards for these exchanges.
What is the Benefit of the Excess Risk of Penny Stocks
Penny Stocks are risky, but also have some benefits over larger cap stocks. There is huge profit potential in a relatively short period if you catch the right penny stock. Day traders and investors of all sorts love penny stocks for this purpose.
Purchase Penny Stocks Through a Broker
Almost all online brokers will now allow you to purchase penny stocks. There are several brokers to choose from for purchasing penny stocks. TD Ameritrade, ETRADE, are two of the more popular choices for retail investors, and they seem to be more penny stock friendly. When choosing an online broker do some quick research on different brokers for commission pricing on trades, tools available for stock research, etc. The online brokerage houses will offer specials at certain times of the year because competition for customers is fierce.
How Do You Find Penny Stocks to Invest In
Sites like OTC Stock Picks and other penny stock newsletters are a good place to start to look for great penny stocks. You can search online for penny stock mailers and alerts. Take your time in finding a trusted source for your penny stocks, and sign up for multiple newsletters to find the best one for you.
Risks of Investing in Penny Stocks
In the world of penny stocks, always be ready to do your own due diligence before buying a stock and putting your capital at risk. And remember, as with all stocks on all exchanges, sometimes you gain and sometimes you end up with losses. Penny Stocks also have a lower amount of liquidity than regular stocks, which makes them more risky, and yet more volatile, which is also what adds to the potential of huge gains.
Only Invest a Small Amount of Your ‘Hard Earned’ on Penny Stocks
Penny Stocks do not deserve to ever be a large portion of your investment portfolio. Perhaps no more than 5%-10% of your capital should be sitting in penny stocks. Always take enough profit to pay for your trade, and never risk more than you can afford to lose.
How Does a Dormant Penny Stock Finally Move
Penny stocks, OTC’s and other micro-caps usually lack initial liquidity (or trading volume) in the stock. Penny stocks present the opportunity for a high percentage gain in relatively fast (and sometimes fleeting) period of time when buying pressure in combination with a rise in share price is dubbed momentum (or momo by seasoned traders) hits the stock. Once a market shows signs of positive momo, traders flock to the stock, and if the buying pressure continues to increase or remains consistent, the potential for huge gains becomes a real possibility. Usually it is news about the company that brings in initial interest for trading.
Do Your homework and then Have Patience
While ‘timing the market’ is really hard to do. If you have done your homework and researched a small growing penny stock company with a dormant stock, it is possible to time the market to make some money. The idea behind this strategy is simple, yet most traders fail due to impatience and by failing to really dig-in and do serious due diligence on the penny stock company. This is how you find the diamonds in the rough. They aren’t many, but there are a few, and these penny stocks can change your life.
Always Protect Your Downside Risk and Upside Gains
Please research Limit Orders and Stop Orders with a registered broker so that you are protecting upside gains and downside risk respectively.
Never Chase a Penny Stock Investment
If an OTC Stock Picks penny stock pick starts to run, and you are on the sidelines watching, remember, Plan the Trade and Trade The Plan!