How do I get into penny stocks?

Beginner investors get their feet wet by first swirling their toes in penny stocks. As implied by the name, penny stocks are share held by companies with a low trade price; usually $5 or less. New investors can easily get hooked by penny stocks because they require a small percentage of capital investment. The low share prices enable investors to purchase thousands of shares and potentially earn a substantial return (the reverse is true as well).

Seasoned investors generally stay away from penny stocks because they are risky and highly speculative. Penny stocks have small market capitalization, limited disclosure, and large bid-ask spreads, limited following and lack liquidity.

If you want to get into penny stocks, take the following steps:

Signup for Penny Stocks Newsletters" and Get Alerts:

Penny Stocks newsletters help you stay informed about current and upcoming trends in the penny stock market. These newsletters are vital tools for retrieving up-to-date information on buy/sell alerts and stock prices. Some newsletters have chat rooms, community forums and valuable training materials. They will be your ticket into penny stock market. 

Conduct a Penny Stock Search:

Mainstream stock exchanges such as the NASDAQ and NYSE have minimum bid price requirements of $1 per share. Otherwise the stock will be delisted. Penny stock traders therefore turn to “Over The Counter Market”. OTC Market Groups arranges securities into ranked marketplaces in order to reflect the degree of investor engagement, disclosure and integrity of operations.

Narrow Your Trading Candidates:

After you understand where penny stocks can be traded, determine which stocks you’d like to trade. You can use stock screening tools to find stocks listed at less than $1. Narrow this list down according to your risk tolerance and strategy.

Understand the Risk:

Penny stocks are infamous for being risky. Many of the companies listed are small-cap stocks that are vulnerable to serious volatility. Liquidity is a genuine concern amongst penny stocks. It is definitely not uncommon for investors to wait around for weeks in the end for enough demand and supply to be generated so that they can exit before serious price fluctuations occur.

Investing in penny stocks is a gamble. It is a risk worth taking if you understand all the variables involved. To get started, open a brokerage account, conduct a penny stock search, narrow your company choices and understand the risk. By taking these steps, you will be set up to get into the explosive world of penny stocks.

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Good penny stock tips to earn more money and make profits instantly!

Penny stocks, as we all know are the stocks that are valued less than a dollar. They are a great way to earn more money without investing in much. But at the same time, they come with high risk of loss. Dealing with penny stocks involves both skill and luck. Though you might come across many who would say that if you are a skilled investor, you probably just don’t need the luck. Well, it is true, but not for all. This is because, not everyone is good enough to be a master at penny stocks.

Over time the best penny stock traders have slowly and gradually developed their skills in due course of time; they know how to take a good decision. They have been trading on a regular basis since a long time now, and therefore, they know how to reap benefits from the penny stocks. Well, but that is only the case with the ones who have been into business since long. What about the new traders?

If you too are new to this field and yet wish to make instant profits out on penny stocks, there are a few things that you must keep in mind. First and foremost, penny stock trading is all about finding a good penny stock on which you can make an informed decision and majorly is about how to capitalize on quality information.

The real question that arises here is, which among all is a good penny stock? We have got some tips that would help you to reap benefits post investing into a good penny stock. These tips are as simple in real as they are in theory. It is very important for the new traders to first learn the fundamentals. Only after that, you can come down in the market and participate. 

The first thing to do here is to make an outline of your goals and targets. Also make an action plan along. This will help you know and follow a guide as you move forward. Next thing to do is to plan how much do you wish to invest and what do you expect out of it as in returns. You must prepare a solid business plan that also tells you how you are going to accomplish your trade goals, because this is what best penny stock traders do.

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