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Penny stocks represent an excellent investment vehicle for
producing gains, while the risks are equally as high. When
you finally decide to get involved in penny stocks, to go
'Beyond The Brink,' there are some things you need to know.
In fact, whether you have been burned by penny stocks in the
past, or have never even invested, the following theories
are designed to give you an instant and significant advantage
over all those inexperienced and uninformed traders. After
all, to make money in stocks someone usually has to be losing
money. Which side of the fence do you want to fall on? |
Glass Jaw
Lots of people have made lots of money from trading penny
stocks. Lots of people have lost plenty, as well. What is
the difference between a successful micro-cap trader, and
one who continually takes it on the chin?
Uses professional stock picks and research. Does their own
due diligence. Observes patience. Takes lessons from past
trades and stock activity. Takes lessons from other traders.
Decides between 10 stocks at a time.
Uses tips at work, rumors, and so-called 'inside scoops'
to pick stocks. Doesn't investigate financials and corporate
position. Falls victim to negative emotions like greed, anger,
and desperation. Makes the same mistakes more than once. Looks
at one stock alone on its own situation.
So Let's Learn
The fact that you have taken the time to review this feature
demonstrates that you have the characteristics of a successful
trader, specifically the willingness to learn from experts
and the experiences of other traders.
So let's learn. As mentioned above, you should always examine
groups of stocks together when looking for a new issue to
invest in. For example, make a chart and write down the revenues
of each. In the next column list the earnings. Follow this
by each of the subsequent criteria you think are important.
With all of the data on one table and available at a glance,
you can easily get a clear picture of which are the one or
two strongest companies from your pool of potential investments.
However, understand that stock prices do not necessarily
act in concert with the underlying fundamentals of a company.
For example, there is nothing saying that the stock of the
worst company on your list won't outperform the top ranked
one.
For that reason you should also include factors such as trading
volatility, your opinion of a potential break-through due
to some new product, potential positive press releases, etc...
This method is not intended to reveal the best stock, but
instead to give you additional clarity about which are the
best few and worst few according to your own weightings of
the various factors you have chosen.
Available Advantages
Get a discount broker. Monitor your portfolio online, do your
research online (and offline), and place your trades online.
Embrace the technology, because it provides superior advantages
all across the board. You can screen stocks, put those into
comparative charts, instantly access the corporate press releases,
check the latest industry news, and then place your trade...
all for about $20.
Then you can monitor your trade order fulfillment, verify
that the money and shares traded hands, track the progress
of the stocks, get instant alerts for press releases... It
is truly endless and complete, and each step that you take
full advantage of leaves other traders one step behind you.
Keep small amounts of money in each stock, and only 'risk'
money for penny stocks. While these low-priced, volatile investments
can produce some truly incredible gains, they usually bounce
among all sorts of price ranges.
On a related note, if you get 'freaked out' or worried about
a stock you hold, you should consider selling your position.
Try to invest in solid penny stock companies that have a low
share price because they are small or undiscovered, not because
they are having business troubles.
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Beyond... And After That
Some of the most successful traders have a few things in common.
Firstly, they have made some major trading mistakes in their
day. However, they learned more from these mistakes than they
ever did from any of their great trades. Don't squander your
failures by trying to put them behind you.
Secondly, keep a journal with dates, specific trade amounts
and prices, and even the stocks you were thinking of investing
in but didn't. You can use this for a hundred different purposes
as you become a more advanced trader, such as seeing opportunities
you missed, or learning that your strategies are valid, or
just to monitor your improvement as you become more experienced
from month to month.
Information, charts or examples contained in this lesson are for illustration and educational purposes only. It should not be considered as advice or a recommendation to buy or sell any security or financial instrument. We do not and cannot offer investment advice. For further information please read our . |
