The Three Starting Steps to Trading Penny Stocks

If you've been thinking of investing in stocks and securities for a while now, but you want to start small, then you might have been asking yourself whether it's time to take a look at penny stocks. Although these low-cost securities aren't necessarily available for a penny, they are often on sale for less than $5 per share, which means that you can invest in a vast number of shares without spending as much money. However, as exciting as penny stocks might seem to be at first glance, they do come with a lot of risks to consider. For instance, you should never trade these shares off the stock exchange, and you should always be cautious about anyone who tries to give you a "hot tip" about the stocks that you should be buying. With a few tips below and this video

to help you learn more about trading penny stocks, you can be well on your way without breaking the bank.

Start by Doing your Homework

First, make sure that you know as much as you can about the broker you're working with and the company you're buying shares in. Although the information available on low-cost stocks is often limited, because the companies are usually new, that doesn't mean you shouldn't be doing your research. See if you can learn anything about the other businesses the founder helped build before he worked for this one, for instance. It's also worth making sure that the exchange you're investing in is regulated by the Securities and Exchange Commission. Avoid purchasing anything from an over-the-counter environment.

Consider your Strategy

Once you know as much as you can about the shares and businesses that you're buying into, make sure that you have a strategy in mind for how to move forward. For instance, how much do you feel comfortable spending on your low-cost shares? There's no golden rule for the exact amount you should invest into penny stocks. However, it's important not to buy too much too fast if you don't have the money to spend. Keep in mind that you could very easily lose a lot of money quickly by spending too much on penny stocks. According to the SEC, you'll need to think about how much you can afford to lose before spending any cash and use that guideline to make your decision.

Start Trading

Finally, once you've got your strategy in place, and you've done your research, you'll be ready to start trading. Just like any other investment you make into the stock market, there's no guarantee that the money you spend will pay off in the long term. However, if you've done your due diligence and made the decision to invest based on what you've learned about the company, it's background, and the market, then you should be on the right track. Additionally, as long as you're using a registered broker and a properly regulated commission, you should find that your risk of becoming the victim of a scam is very limited too.
 
 
< Prev   Next >
 
 

Quotation

"A human being is part of a whole, called by us the Universe, a part limited in time and space. He experiences himself, his thoughts and feelings, as something separated from the rest a kind of optical delusion of his consciousness. This delusion is a kind of prison for us, restricting us to our personal desires and to affection for a few persons nearest us. Our task must be to free ourselves from this prison by widening our circles of compassion to embrace all living creatures and the whole of nature in its beauty."

Albert Einstein
 

Copyright 2019 AmO: Life Beauty Without Limits....