September 25, 2016
Penny stocks have high risks associated with them and should be purchased carefully.
We’ve enlisted 4 important tips for making good money in penny stocks:
Check the Trading Volume
If the trading volume of any stock is low, it is probable that you will lose your entire investment by relying on it. Most penny stocks traded at low volumes in comparison to blue chip stocks with mid or large capitalization. However, if the trading volume is very low, it means people are not willing to buy or sell the shares fast enough. It can be a risky situation and the stocks can start begin losing it worth. People think that there is no way to sell before they hit the bottom line, but the actual fact is that when the trading rate lowers, the investors should think about making their decision for quitting.
Some experts suggest that there should be an average number of shares traded in a day since it is important for investors to make sure that the appropriate volume is being traded. The difference between the listed price and selling price has to be checked to make the best option. The spread goes high for the trusted shares and hence, you can make sure about the trading capacity of a stock by checking its volume. The average spread should be fair enough to encourage you for purchasing a particular stock. The stocks having extremely low volume should be DEFINITELY AVOIDED.
Don’t completely rely on Free Newsletters
This is the worst mistake done by some investors. They take free picks from the penny stock newsletters and get greedy by blindly following the emails aimed at doing Pump and Dump scam. The people sending these marketing emails show that they are experts, but ultimately, they turn out to be fraudsters. Nothing in this world is free and if you are getting free advice taken, you’ll have to pay for it in some or the other way. Free can end up costing you the whole investment amount and this is the nature of penny stock world.
You are warned about taking suggestions from any free newsletters and subscribing to them because the people sitting at the other end are so clever that they would try to attract you with their nice words and make you invest into those underperforming scammed stocks.
Find the Best Stocks to Buy
The best way to purchase the right penny stocks is different for all. You need to choose the premium and trusted stock picks because ultimately, it will be required to check out a few stocks from the list of thousands of stocks. After you check out the stock picks, it is essential to do your personal analysis on the particular lists and establish you own person list of stocks having probability to make you earn good bucks.
There are many experts charging nominal fee for giving the best stock tips and it is worth the fee to find the right person. The profit you can get by these picks will justify the fee and you will be glad to make the earnings. It is always good to pay for the services with which you have the probability to earn in huge numbers. After all, it is always preferable to make the right decision with fullest information. The penny stock pickers have to sniff out the truth before anyone else is able to do so. You can sell the best penny stocks and cherish the progressive approach with better ideas.
Be careful for trading Penny Stocks
Penny stocks can trade on many exchanges, but those are not the major exchanges. There are penny stocks to be found on the OTCBB and Pink sheets, which are not much reliable. There are lesser chances for scams to occur in major stock exchanges, but the probability is on higher side with pink sheet stocks. The companies trading on OTCBB are less reliable and have the chances of getting fraudulent. The companies trading on major stock exchanges have better fundamentals than pink sheet stocks. The majority of penny stocks are failure because of mismanagement of regulations and less strictness in the pink sheets. The stock trading has to be done with you own research to make sure that there are lesser chances of getting losses.
The best way for penny stock pickers is to choose the best services for trading these stocks and use fixed money for investment. You might get greed for investing a big money, but controlling that feeling is the most important thing to earn good with penny stocks. Minimize your risks by making a smart move and earn good with penny stock investments for the best scope. You can get the real benefits by investing in the best stocks.