There are few other important strategies followed by successful investors and traders to make good money out of the penny stock trade.
These are as follows:
- Research and Analysis: Successful traders always pick the right stock by proper research and analysis. There are two main important analysis i.e. Fundamental and technical analysis. Fundamental analysis analyses the financials of the business and technical analysis studies the price movement of the stock. They don’t go by and invest what comes the way. This is where they are different from the small investor. Successful traders never go by trend. Rather they believe in making their own ways of trading.
- Invest what can be afford to lose: The most important mantra of successful penny stock traders is they invest only what they can afford to lose. It is very important when it comes to trading into a penny stock. These are very risky stock and can ruin your whole investment. If a trader can afford to lose whole investment, it is very rare that he will get into panic mode when the stock is falling. The penny stock can afford to bounce back sharply too, not only cover the losses but also give profits.
- Penny pump Finder: Penny Stocks are great money making opportunity, but involve a lot of risks. The only prerequisite is that you find the right stock and trade it at the right and accurate time. Successful traders find use the penny stock pump finder to find the right stock for trading and investment. The software enabled with all the major research and strategies to find the stock and also calculate when to buy and sell the same. Many of the successful traders have made most use of this software and have earned millions out of the penny stock trade.
Penny Stocks are the most precarious trade compared to any other category of stock traded on the stock exchange. In spite the most potential profitable stocks; these are also the most risky trade for any investor and trader. The price movement of the stock is so huge that it can move up to 20% of the value of the stock price in either direction.
Being most risky, there are also lots of problems trading into the penny stocks. The few important problems encountered during penny stocks trade are:
- Pink Sheets: Most of the penny stocks trade is not traded on the major stock exchange, rather on pink sheets. Pink Sheets platform is not a reliable and there is no such a major restriction or guideline for companies to get their stock listed on it. That is the reason these stocks are more prone to scams and frauds hence trapping the small investors.
- Low trading Volumes: The small company’s penny stocks have low capitalization and that is the reason these shares have very low trading volumes. Low trading volumes is always a problem trading the stock. The volumes sometimes are that low that it becomes difficult to even sell 200 shares.
- Lack of Information: There is always lack of information regarding the company’s financials and outcome of any AGM. The penny stocks are small company stocks which are not much highlighted in the TV news channels. There are also not even brokerage reports on these stocks. Small investor feels very difficult to get the required information for purpose of analyzing the penny stock.
- Scams: The penny stocks are very easily prone to scams. These are always on radar of the big brokerage firms and even the promoters who play big scams into these stocks. The most common scam is the pump and dump scheme.
Penny stocks are the small company stocks traded at very low price on the stock exchange. These are low priced but yet a very risky trading proposition for the traders and investors. Penny stocks are rewarding also for the investors. They can tend to give multiple returns and that too in very short period of time. The only thing is to get that right penny stock to trade which becomes a profitable trade. There are many constraints in picking the right penny stock majorly being the lack of information available for analysis.
The best source to find the best penny stock trade is the paid premium newsletters. There are many premium newsletters available in the market which has history of providing the winners. These newsletters with nominal amount of subscription recommend the subscribers with the profitable penny trade.
Although these newsletters are an important source that guides the small investors with a profitable penny stock, yet they have some flaws. click here to learn Strategies to Earn Big by Successful Penny Stock Trader. Below are some pros and cons related to penny stock newsletters are:
Goodwill of Newsletter: The most positive regarding the newsletter subscription is that there is goodwill of analyst attached to it. Here that analyst works and recommend for his goodwill rather than only working for profits of subscriber. This gives sufficient confidence for any subscriber to rely on the recommendations.
High Subscription Fee: The most of the premium newsletters have a high subscription fee which is not affordable for all investors. Here is where the low paid or free newsletters peep into. They are unreliable and mostly issued for the purpose of initiating the frauds and scams.
Conclusion: it is concluded that the newsletters is a best source of guide for picking the right profitable penny stock. All a subscriber need to make sure that they get the reliable paid premium newsletter for the purpose.