Investing in stocks is one of the most beautiful thing you could ever do. Having said that its the most difficult profession you could ever get into. Lot of options are available in stock market for investments penny stocks is one of those options preferred by traders. There are lot of reasons why traders choose penny stocks, future prospect of the company offering penny stocks is the best reason why traders choose penny stocks over other stocks. Read on to know various ways to trade penny stocks.
Its possible to make money when you are planning to invest your hard earned money in stocks. Remember odds might be against you as you might have failure at the start of your trading career. For those who can’t afford to buy stocks that are expensive prefer Penny stocks.
Ignore Penny Stock Success Stories
- Penny stock expert suggest that you have to ignore penny stock success stories.
- You should not believe about the success stories that are touted in emails, social media etc.
- Don’t believe others and do it yourself attitude should be there while trading penny stocks.
- Traders believe penny stock success stories and lose their money again and again all the time.
- Instead concentrate on penny stocks that offer solid earning growth.
Ignore tips and read disclaimer
- Most of the traders blindly follow tips and tricks to invest money in penny stocks.
- Its advisable that you should ignore penny stocks tips and concentrate on disclaimer.
- Penny stocks emails and news letters offer false promises and makes it difficult for you to earn money.
- Remember penny stocks are sold more than it was bought. No news letter will tell you truth about penny stocks most of these promises are fake.
- You will small amount of success when it comes to getting profits on penny stocks you invested.
- If you can make 20%-30% of money on penny stocks you invested then sell it quickly.
- Most of the traders get greedy and try to achieve more returns end losing what have achieved in short span of time.
Don’t listen to company management
- Don’t believe or listen to company management that is offering penny stocks.
- Remember you can’t trust anyone while trading stocks. Most of the companies try to get their stocks up and all they want to do is raise money and grow their business exponentially.
- Do research and find better opportunities to invest your hard earned money in penny stocks as try to find scams and avoid them as much as you can.
Don’t sell short
- Penny stocks are too much volatile and you can lose more than 50% of your money just like that.
- If you are interested to make money by trading penny stocks you need to trade professionally and don’t sell short.
- Short selling might be dangerous because penny stocks might move due to hype and newsletter tips.
Choose stocks with high volume
- Traders who choose penny stocks must prefer stocks that are traded at least 100,000 shares a day.
- Low volume penny stocks might be difficult to trade as they would be less volatile and it will take time to get out of your position.
- Trade stocks that are priced more that Rs 5 per share and traded in large volumes. Don’t choose stocks that are traded in small numbers and less prices as they are less volatile.
- Less volatile stocks won’t offer that much of opportunities to make money.
If you are interested to make money by trading penny stocks you have to follow above rules. Educate yourself while trading stocks and apply those ideas and do research by yourself and invest your hard earned money.