So, you've read about the pitfalls that penny stocks? Still, you determine that there are advantages for investment and trade in microcap stock not least of which is the ability to make good profits in a short period of time for a smaller investment capital. So, you know now that there are risks and benefits in small CAP stocks.
If it is still your decision to relocate to the investment shares of a penny, we suggest the following tips to minimize the chance of losing and maximise the potential for a profit. Note that these suggestions are qualitative in nature, and quantitative analysis will be discussed in other articles.
Know your inventory
This is one of the rules primarily investment-we know what yours. When you hear such a statement, just mean knowing your shares of stock from the inside outwards. You must have sufficient knowledge about the company issuing the present activities and future directions. You need to know the moves of penny stocks for a specific period of time, and during the day. Should be "your" investment instead of the other way around this is the way to either a success or failure.
Keep your Wits
Can be very tempting to give the prestigious releases multiple companies stock penny to lure Skeptikisti investors and traders to plunking down their money. Be warned, as this is one sure way to get over your head and get into deeper damage. Remember that it is very volatile microcap stock so much so that it can be profitable for a half an hour ago is now rapidly losing money. We recommend trading penny stocks your money can afford to lose, let's say, a small profit from a lottery instead of your entire 401k.
Think before you Buy
The price per share is not only the only monetary expenditure necessary each time you trade stock stuff. You should also consider carrying charges, broker commissions and taxes related to trade, which will eat profits. You may be glad that you just made a profit of $ 20 in a trade only to realize that the cost of back amounted to $ 20 or so, which means that just about stopped yet. So, do your math before thinking that a penny stock trading certain is the manna that await you here.
Have a plan
This proposal translates essentially not greedy in adopting an entry and exit plan. For example, if you specify that the maximum loss is $ 500, receive your capital before it all disappears drain. Or if you gain maximum is $ 500, take profits and capital before the changes of the market against your favor. Not greedy because they cannot win against market nine times out of ten.
With these tips, you can indeed penny stocks to your own personal money machine. Just make sure you have a good set of investing and trading shoulders in your head.
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