Many people are drawn to the idea of trading penny stocks because of the ‘high risk, high reward’ concept that comes with them. Even though penny stocks are incredibly volatile and it’s possible to lose a lot of money with them, there’s also no denying that it’s possible to receive a massive return on your investment as well.
This Timothy Sykes review, for example, tells of how Mr. Sykes easily manages to make over one hundred thousand dollars a day through penny stock day trading.
Nonetheless, you can’t just rush into penny stock trading without having any clue of what to do. That’s just a recipe for disaster.
Here are the top penny stock trading strategies for new traders:
Keep Emotions Out The Door
The most important piece of advice that can be given to you in regards to trading any kind of stock is to always keep your emotions out the door. By forging an emotional connection to a company of a particular stock, it’s easy to become blinded from seeing which stocks are actually worth trading. Buy and sell stocks based on logic and the circumstances of the market, not on your emotions.
Only Buy Stock From Reputable Companies
A lot of fraud happens on the penny stock market and this discourages many people from investing their money in penny stocks. However, you can avert fraud by only buying stock from reputable companies with a good history and potential, and the best way to find these companies is to only trade penny stocks from companies that are accepted on the major stock exchanges.
Find Out Which Companies Have The Best Potential
Only going to companies featured on the major stock exchanges is only the first step towards deciding which specific companies to invest in. You how have to find out which companies have the best potential for a breakout. Pay close attention to which companies professional investors are keeping their eye on
Buy Low, Sell High
This is an obvious piece of advice when it comes to trading penny stocks, but it’s still worth repeating. Making money with trading stocks means buying the stocks when they are low (and as much of them as you can), and then selling them when they are high.
The key here is being able to make decisions quickly. You may see a stock drop in price but you don’t buy it because you may think it will drop further, only for it to shoot up in price mere hours later. The same could go when you see a stock increase in price, and you wait again only for it to drop in price.
Make decisive decisions quickly and be prepared to cut your losses if a stock appears to be plummeting in value.
Trading Strategies For Beginners
Overall these are the top beginner penny stock trading tips for you to follow. There is certainly a learning curve to trading penny stocks, so as a final word of advice, start small and learn how to day trade effectively before you begin to increase the amount of money you invest.