Buying Penny Stocks Online – 7 Mistakes To Avoid!

Buying Penny Stocks

1. Never Pay For Penny Stock Tips- Buying penny stocks means doing the necessary research and comparisons, and some investors will try to take a shortcut and pay for stock tips instead. This is a big mistake that can be very costly. There are some penny stocks companies that will try to manipulate the stock price by including the stock in a list of paid stock tips. Why pay for information you can research and find out yourself?

2. Never Use Market Orders- Avoid the use of market orders completely and make good use of limit orders instead. Market orders can be a way for the market to be manipulated and you could end up paying more and losing money in the long run. Instead you should thoroughly
research penny stocks and then place a limit order so you get the stock at your price or not at all. This prevents market manipulation and helps protect the investor.

3. Avoid Trading After Market Hours- Selling and buying penny stocks after the market has closed should be avoided, especially for those new to the penny stock trading game. When the market is open the trading volume and activity is much higher, and the trading opportunities are usually much more favorable. After the market closes the trading levels and amounts drop off substantially, and this can affect the stock prices and liquidity on the market.

4. Never Chase A Trade- If you plan to buy penny stock online do not ever chase a trade, instead you should set your buy and sell parameters and then wait for the stock to fall within these levels. Many investors make the mistake of putting off a stock purchase until the price has already started to climb, and then the investor will try to chase the trade to make up for the initial lost return potential.

5. Never Veer From Your Chosen Strategies- Before you ever start investing you will need to develop the strategies and investment guidelines that you will follow. Once you start buying penny stocks make sure you stick with your chosen strategies and do not deviate. Many investors lose everything when they go outside of the limits they have put into place, and this is why you develop investment strategies in the first place.

6. Never Let Emotion Affect Your Trading Decisions- Every investor has received a hot inside tip on the best penny stocks to buy, and this can cause you to allow emotions to interfere with your investing decisions. Separate your emotions and keep these away from your trading activities for the most successful trading results.

7. Never Risk Money You Can Not Afford To Lose On A Hot Tip- Buying penny stocks can be a good investment, as long as you choose the stocks carefully and you never risk any money that you can not afford to lose. Remember that capital preservation is important for any investor and make sure that you do not stray outside of your acceptable level of risk.