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Top 10 Secrets of Trading Penny Stocks

  • Penny stock investing and trading penny stocks can be profitable for the investor willing to try penny stocks
  • It is possible through online penny stock trading to find penny stocks and without much trouble
  • Investors looking to buy penny stock can look under as well


1. Know When To Call It Quits When Trading Penny Stocks

Penny stock investing is just like other investment types, and not every trade is going to be successful, even for experts like Warren Buffet. One of the biggest secrets of trading penny stocks is to know when to sell and walk away. Every investor makes mistakes, and recognizing these can help limit the losses from a bad choice.

2. How Investors Find Penny Stocks

Penny shares are a great market for many investors, but how are these found? There are many websites and stock finders that can help locate penny stocks without the need for paid advice. The penny stock broker used can also make recommendations, but be careful of any conflicts in these situations. Complete research is the key to great investments.

3. Cheaper Ways To Buy Penny Stock

One of the hidden secrets of online penny stock trading is really no secret at all but many brokers do no know it. Use discount brokers, because the trade fees and commissions are much lower. These are online broker services that charge discount fees to investors who perform their own trades electronically, using the discount broker as a clearing house to access better trading opportunities with lower costs.

4. Online Penny Stock Trading Is Just As Effective But Much More Convenient

Whether the goal is to buy penny stock or sell it, trading online offers much more convenience and is far easier. It is important to remember that real money is involved though, because at times some investors may forget that the numbers represent real amounts of money. Investors who try penny shares usually risk smaller amounts though, because of the low share prices.

5. Penny Gold Stock Can Be An Ideal Choice

With the price of gold lately, penny gold stock investments can turn out to be a very wise pick. These are stocks in the gold sector that meet all of the requirements for penny stocks, but do not meet the stricter standards of the major markets, like the NYSE and NASDAQ. Gold has always been an excellent choice for investors, and this is true with penny stocks in this area as well.

6. Success With Penny Shares Is Normally Seen In Small Gains Not Large Leaps

One secret that many experienced traders know is that the goal with penny stock investing is that of small gains and not get rich quick dreams. Penny stocks have very low prices, so even if the price doubles the amount may not be substantial. If this is done often enough though, with many trades seeing short term gains, the amounts will add up over time.

7. It Is Possible To Try Penny Stocks With A Low Investment Amount

Because penny shares have such a low price per share, trading penny stocks can be done with a smaller amount of money than most other markets. Even a few hundred dollars can be used to buy penny stocks and start trading. This also means lower risks, because there is less investment capital involved and short term gains are normally the goal so the stocks are not held long.

8. Trading Penny Stocks Usually Requires A Broker: Choose Wisely

A penny stock broker is needed, but make sure to choose wisely. Look at the fees and commissions charged, and determine whether they are reasonable. There are a number of discount brokers that will charge a flat fee per trade, or a monthly fee for numerous trades. This is normally better than paying a commission per share traded, especially if a high number of shares are bought and sold regularly.

9. Look Closely At The Penny Stock Investing Costs And Expenses Involved

Every investor should ensure that they are aware of all the costs and fees involved in an investment before making the final choice. Hidden fees, high commissions, and administration costs all lower the value of the investment. Cost is not the only factor but it is an important one to consider.

10. Watch For Common Scams When Trading Penny Stocks

Penny stock investing does carry some risks, and one of these is scams and manipulations which falsely inflate a penny stock. There are a number of scams that can be spotted if the right research is done, and the investor will prevent losses by avoiding stocks which do not seem solid and reliable, or trades that resemble common scam methods. Be wary of any deal that does not allow the time to thoroughly investigate the stock.

The information supplied in this article is not to be considered as medical advice and is for educational purposes only.

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