Good Penny Stocks: 10 Secrets of A Seasoned Penny Stock Trader

Good Penny Stocks

Penny stock trading can be a profitable endeavor. The potential for gain comes from the ability to purchase large amounts of shares which enables significant percent returns on small price gains. Seasoned traders employ many trade secrets to find good penny stocks. Here is a list of the top ten secrets of seasoned penny stock trader:

1. Beware of scammers

The internet is chock full of stock market trading scams. Don’t buy a system, training course, or any other type of trading product. The internet is free and all the information a trader needs is easily attainable.

2. Research first

A hunch is worthless. Without sufficient research and analysis first, you’re just gambling your money away. Know what you buy before you buy.

3. Use what you know

Prior knowledge of a particular industry or company is valuable. Good penny stocks are companies with solid fundamentals. Any information you already know about the condition of firms operations will help you decide the potential for trading.

4. Don’t believe everything you read

Beware of disreputable reports of a hot penny stocks on the rise or penny stocks to watch in some flashy font. Such pages will be a scam or if nothing else unsubstantiated claims used to get some else rich.

5. Have a strategy

A strategy can will prevent unnecessary losses and help to maximize gains. For example, one strategy would be to sell off shares prior to end of day after a large spike in trading volume. Good penny stocks for this type of strategy are those stocks whose prices are tied to commodities like wheat or corn.

6. Do not over extend

Trade only with discretionary funds. Penny stock companies are more volatile than traditional a security which magnifies gains and losses.

7. Know when to hold and when to fold

One important lesson to remember is to walk away while you’re ahead. Overzealous greed will eventually lead you right into bankruptcy.

8. Think long term and have goals

Current events can impact future stock growth. It is important to have investing goals to strive for and motivate you to always be looking the next big money maker.

9. Record keeping to track trends

A key part of finding good penny stocks is record keeping. If the price of oil pikes to $300 a barrel, how does this affect the price of firms on your radar? Trending stocks will become to engine to the money machine.

10. Stay informed

Penny stock investing requires reading relevant investment material. It is important to stay current with the news of the markets in order to gauge impact of companies as well as analyzing the potential for mergers and acquisitions.

Penny stocks can be a great way to make extra money if you discipline yourself to follow these simple trade secrets.