Penny Stock Trading Explained

Subtitled:

Penny Stocks, What They Are, and Why You Need To Trade Penny Stocks

Penny Stock is the USA expression and is identical to Penny Shares in the UK.

Don’t expect to make 500% return on Cheap Penny Stocks because Penny Stocks are not the way to get rich quick. It is no different to trading any other stock.

Reasons to consider trading penny stocks

Penny Stocks are dirt cheap stocks of companies with small market capital
Mostly speculative companies that don’t really exist yet, and they need venture capital
Often they have great ideas, but need money to get started
They don’t trade on the major exchanges, but on the OTCBB[ Over the Counter Bulletin Board], nothing on the NASDAQ or the NY Stock Exchange.
The OTCBB is not nearly as well controlled as the major Exchanges
Penny Stocks are between 10 cents and $2, though not always but they always have the suffix ‘OB’ as their ticker symbol. This is short for OTCBB.
You might find stocks below $5 on major exchanges.
Penny Stocks first became popular in the dot com boom in the late 90’s, where a huge amount of money was made.
Emerging markets to the fore like alternative energy, nano technology, stem cell research. Look for ‘avant garde’ companies that no-one wants to lend money to.

Why Trade Penny Stocks

Cheap, so you can buy a huge number of shares
Emerging markets with the potential for huge gains
Easy to get started with a small amount of capital.

Example A : If we take 10cent penny stock and we buy 10,000, then that will cost $1000. Sell at 15cents we make a 50% gain and pocket $500 profit.

Example B : If we take a $100 Of Blue Chip stock and we buy 10 we have spent $1000. If we sell for $120 which would be a 20% profit[pretty darned good and unrealistic] we would make $200 profit.

A :  Could happen in a day, but B : Could take several months

With Penny Stocks you have buying power, because they don’t often move in 10-15%, when they move, if they move you can gain 50% to 500%.

The problem with penny stocks is that most traders lose everything trading them.

WHY?

They are start up companies that exist on paper with no profits and no products, so if the companies just quietly vanish, and many do, they never see the light of day,  then so does your cash!!

The key thing is to eliminate the risk, or at least significantly reduce the risk, by picking them the right way. You need maximum potential for profit and less risk for losses.

To lose money is stupid, so how do you pick winners and take no risks.

There are three trusted sources, so click on the links below, and see what they have to offer. YOU WILL GET AT LEAST 30 DAYS WITH MONEY BACK GUARANTEES TO TEST DRIVE THEIR PICKS

Penny StockProphet How James Connolly could teach you to turn pennies into thousands of £££'s or $$$'s

Penny Stocks VIP Best Free Penny Stock Picking Service

Penny Stocks Psychic Turn pennies into a $1M portfolio?