How To Build A Penny Stock Trading Plan

Penny stock trading may sound interesting, but without taking the time to develop a solid plan it can be financially risky, to say the least. Take the time to develop a plan. This plan will help you achieve greater success, it will help you make decisions quickly and it will help keep you grounded.

There are a few basic tools you will want to use as you develop your plan. Because research of this market and of different trading strategies is so important, one of the most important early tools you can use include books. Read books on topics like risk management, technical analysis and the psychology of trading. They will give you a lot of insight into your own preferred style and how it will work with this market.

Once you have some background it is time to start testing and practice trading. These two things will help you really start to get a feel for this type of trading. You should know you’re ready when Continue reading

Paper Trading Penny Stocks

If you’ve decided to start trading penny stocks you may be excited to jump right in and get started, but this can be a mistake. It is best to start paper trading so you can learn this market and make mistakes without them costing you a lot of hard-earned money. These stocks are very different from traditional stocks and although there is a lot of hype about the possible success in this market, there is a learning curve and it is better to learn through practice.

Paper trading is a good idea for anyone who wants to start trading stocks. It will provide you with the ability to go through the motions of buying and selling stock to see how you would do if you had invested real money into them. To get the most accurate picture of how you would do, it is important to track everything including fees, limit price and exit price. Take this seriously and use it as a tool to help you learn and prepare for the real thing.

There are a few specific things to consider when you get started. Continue reading

Practice Trading Stocks To Reduce Risk

Most consider penny stock trading to be the exchange of stocks at a price between $1 and $5 per share. You’ll also see them labeled as micro cap stocks, microcap stocks, nano stocks or even just small cap stocks. But that doesn’t mean there is less risk involved in this market; in fact these stocks generally carry more risk. That’s why it’s a good idea to practice trading before you start investing real money.

Penny stock trading occurs within the OTCBB (Over-the-Counter Bulletin Board) or on the Pink Sheets. So you’ll also find these stocks labeled as OTC stocks (OTC stands for over-the-counter). They tend to represent smaller companies, newer companies or struggling companies. They either haven’t proven themselves enough to list on NASDAQ or the grand New York Stock Exchange (NYSE) or in some cases they’ve been penalized by those exchanges and removed.

There is a common misnomer regarding this type of trading. Continue reading

Penny Stock Investing

If you are thinking about investing in penny stocks you need to ask yourself if you have the poise, the discipline and the vigilance to make this OTC market work for you. Finding the best penny stocks requires extensive research, and it is important to understand these stocks may, for periods of time, seem like investments that aren’t performing that well for long periods of time before they end up pay real dividends.

It is possible to make money buying penny stocks when you learn how leverage the tools and data available. Of course having a natural feel for this market doesn’t hurt either. But it is important to learn the basics for yourself and not simply take tips from someone else. There is a lot of fraud in this industry so you need to understand it yourself to have the best success. Continue reading