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Penny Stock Trading Tips For Beginners
Penny stocks refer to stocks trading at a low value in the stock market. Traders are usually attracted to them because of their sudden and high upward move at times. In most cases, there is no fundamental reason behind this huge movement of penny stocks. Trading at stock exchange is based on the principle that there must be buyers and sellers to make money.
However, this is a bit risky as falls in the penny stocks can be enormous. Therefore, it is important to be very careful when day trading penny stocks in order to avoid losses. If you want to invest in stocks, here are some strategies that you need to employ to double or even triple your investments within a year.
Monitor Price Movement:
To participate in online trading of stocks, you need to monitor the price movement of the shares for some time. Before you invest any money, it's advisable to track them for at least one month. This is because such stocks usually don't have a clear trend and they can enormously move up or down within a short time. So, if you are a beginner, follow this suggestion and you will certainly make considerable money from the penny stocks.
Select a Safer Sector:
When trading in stocks, it is advisable to buy shares from safer and stable sectors that are not often affected by market fluctuations. Stocks from sectors that are always on the news can be a bit unstable. On the same note, investor sentiments for different sectors can change at different times of the year; hence you need to study the market carefully to know the stocks in demand.
Study Technical Charts:
Another thing that can help you to choose stocks is the technical charts. Studying technical charts of stocks would enable you to arrive at an informed decision. The price patterns on the charts would not only allow you to make a decisive conclusion but would also help you to predict future penny stock prices.
Buy on Dips:
The key to making money with stocks is to buy them at lower prices. Some investors usually buy stocks at the wrong time when they should be selling them. Eventually, they will end up making losses when the selling pressure from big market players reduces. Therefore, buying stocks at lower levels is beneficial to any stock trader.
Sell on any Rise:
For anyone who wants to learn how to make money in stocks, selling shares on any rise is the ideal solution. If you notice any opportunity of booking profits, don't wait. To know when there is an opportunity to make some profit, you have to monitor the stock market carefully. This will enable you to react faster.
Avoid Over Valued Stocks:
It is advisable to buy fairly valued penny stocks in comparison to their peers. Valuation is very important when it comes to penny stocks as they react sharply to any news. Therefore, you need to compute their fair value using valuation ratios, like net profit ratio or price to earnings ratio.
Do not Invest Huge Capital:
It is not a good idea to invest everything. Penny stocks are associated with a lot of risks and hence you need to invest only 8-10% of the total money you have allocated for share trading. Avoid buying penny stocks of smaller companies with the hope of doubling your money in a couple of days.
Have Correct Stop Losses:
Stop loss refers to the price below which an investor exits from stock because it may touch rock bottom thereafter. Therefore, it is important to have a stock loss price at the right level to protect profits and lock them in time. The stop-loss order is placed with a stock broker and he executes it over the phone.
In conclusion, trading penny stocks may be achieved only with good stock research and systematic stop losses. You can also seek assistance from brokers and experienced traders, particularly when dealing with a huge stock market such as NYSE. If you follow the aforementioned tips, you will certainly reap the benefits of your investment. At the end of the day, your success will depend on your research and decisions.
Good Morning.. Start of the new year. Bought Friday TVIX at $31.95, may have bought a little too soon, I'll hedge with a buy of TNA.
Very Low Volume today in the Market. Not a good sign.. It's a sign of a big move in the near future.. Generally to the down side. Sears was down 27% today.. Best Buy will be the first to go. No.. Wait.. RIMM will be the first to go..
AT&T stops chasing after T-Mobile after the Justice Dept hated on them.. I'm glad the merger didnt go through.. Too many jobs would've been lost regardless of what AT&T proposed to create.
Bank of America looking to go below $5 soon! If it goes below $5 watch out below.. TIC.. TIC.. TIC.. TIC........
where is the value of the money!! in terms of money Americans are losing for 15 yrs straight.How??? well look at value of $USD and SPX. SPX didnt go anywhere but USD went straight down.
spx 1200 in 1999 gas was 1.45 per gallon.......spx today 1200 gasoline 3.90$
Market close 132 negative. S&P closed below support level.. Looking for 1187 next.
Good Morning, For those of you who want to trade energy Play ERY. It's a bear. Energy doesn't like the market right now..
Markets are coming to the realization that a whole continent is in debt. Nothing can save it but bankruptcy. The more "tightening" a government does to its country the worst is for the economy. There is no win, no matter how it's looked at.
S&P off 26 points for today to settle at 1234 and the Dow Closed below 12000, long term target for DOW is 10000 IMO.
Link. http://www.elliottwave.com/tutorial/Lesson4/4-2.htm <--This is called "predicting the future"
As I speak market down 129 points S&P down 17 points.. Need a much bigger drop for correction.
Market technicals indicate S&P will settle to 1220 or around that area..... Shorts can make some money...
If you are dumb with your money, you go broke, start over. That is capitalism. There has to be failure in order for there to be capitalism. This is what bulls don't realize. Nothing continually goes up and up and up and accumulate more debt and print more money without consequences. Derivatives are going to make the bankers fail, its a matter of time, then we will start over.
Excellent Article. Link Forward http://www.marketwatch.com/story/end-times-for-the-euro-zone-2011-12-07?link=kiosk
Stocks to Watch: QID, DXD, and SDS. All are short the market. Because I don't trade on margin, I can't short the market. These 3 ETF's will put you in a perfect position to short a whole sector, shorting individual stocks is extremely risky.
Awww.. Look at the poor "market rally" Again.. Market goes up over 100 points and ends at 40 plus.. S&P is having a hard time moving over 200 MA.. It's like someone hitting there head on the walls.. Once you keep hitting it, your bound to fall... You don't keep trying......
Market is preparing a big move.. Side ways trading for S&P, the move it's going to make is what I have yet to figure out.. Consilidation could mean a move towards the upside out of the channel its forming.. We'll see sooner or later.. Maybe by Friday.
Good Morning. I would stay away from Apple for the time being. Looks as though it's putting in a lower high to me which would indicate an overall down trend. I wouldn't blame it on Steve Jobs passing but some would.. The overall meeting at the EU summit in a couple of days should be very interesting.. As I believe nothing will get done. Having more than 15 countries agree to a term is funny to me.
The market is tired. You can tell. My reasoning. EU just said they are thinking about creating two bailout funds. Another bail out fund worth 500 billion and the market goes up to a high of 117 points or so only to lose half of its value and close slightly above 55 points. The market needs new bag holders. S&P having trouble with closing above its 200 day moving average. Interesting moves for the rest of the week. If anyone can pick up FAZ and TVIX while you can. It's a sign when VIX and S&P both close green!!!!!!!!!!
By The Way Italy is planning $40 Billion in austerity over 3 years.
BUT they have $400 Billion in debt to rollover in ONE year.
That is like trying to blow up a tank with a straw and spit balls.
banks have been used to enforce a form of slavery. There is no reason any man (or woman) should pay above 5% for a loan. Poor people are kept in slavery through artifically high rates of interest. It is a national disgrace that a large segment of America is charged 20+ percent for loans. There are places where people can cash their paychecks for a highly discounted amount, how can these people ever get out of a cycle of poverty? Our entiure system stinks and we the people continue to allow it. We keep electing the same politicians and status quo never changes. Read about Andrew Jackson and the bankers. We have had leaders in the past who took on the banks and chenged history. Banks make money on loans on money they don't have. Therefore the rate should never be above 5%. If a person has a bad credit history don't loan them money, period! Charging the poorest people the highest rates is criminal.
Our beloved governemnt.. It's crazy how they manipulate markets and congressman aren't considered "insider traders" Not to count the tax that starts in 2013 taxing ALL 401k's anywhere from 3% to 8%!
The rich don't have 401k's! Just the middle class, if that isn't proof enough what they want to do nothing is!
Not a Big Fan of Apple (AAPL) if you could short here, I would. Market needs to be corrected before heading up towards 1300 then a market crash after that. Rinse, wash, repeat.
Currently playing FAZ, long term target above $100 short term target $60. Short Term is by the End of December. I don't believe in XMAS rallies.
S&P issued a downgrade warning, which means markets will be "prepared". On a technical analysis S&P should go down about 90-110 points from where its at.
Stocks To Watch for 2012
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