If you are a trader or an investor looking to learn more about penny stock trading and how it can add to your investment portfolio you have come to the right place. Here you can learn all you need to know about penny stocks that can help you make safe more viable investments.
Penny stocks are low face value stocks (less than $5) that are traded at the Pink Sheets or the FINRA’s OTC Bulletin Board (OTCBB). Unlike, blue-chip stocks that are traded at government-regulated exchanges penny stocks have few regulations and the stocks of companies sold at the Pink Sheets aren’t required to file to the Securities and Exchange Commission (SEC).
This makes investing in penny stocks a highly risky proposition but where there is great risk there also tends to be great rewards. What makes penny stocks attractive to investors is the fact that most of the companies that fall under the category of penny stocks are struggling businesses or promising startups that can stand to both gain and lose your money. Since these stocks are individually worth…well pennies…a small fluctuation in their price can result in huge gains or loses depending on the size of your investment.
Most brokerage firms and even hedge funds don’t offer penny stocks as a viable investment opportunity to there clients as they are often seen as a way to scam potential investors of there money. This has given penny stocks a bad name in the market but there are those that have made millions investing and trading in penny stocks that have an altogether different perception of this rather volatile and speculative market place.
Risk Vs. Reward
When investing considering what you return on investment (ROI) is likely to be both in the best and worst-case scenario can really help you gain perspective whether the investment is really worth it or not. Most people tend to invest in stocks based on what they have heard or seen from others and this is the worst mistake you can make when investing. Rather than trusting what others have to say it is best to do your due diligence and figure out on your own whether investing in a certain opportunity is viable or not.
When it comes to penny stocks there is no doubt that they are much riskier investments. This is because regulations governing penny stock trading are the most secure and finding information relating to companies traded on exchanges can be quite difficult as they are often not well known or recognized. This can mean that you are most likely investing blind which is never a great idea.
However, people like Timothy Sykes, a self-made millionaire who invested $12,000 of his Barmitzvah money in college and turned it to millions, owe their livelihood, success, and lifestyle to penny stock trading. If you haven’t heard of Timothy Sykes before you should definitely check out this review at https://toptradereviews.com/timothy-sykes-review/
What Does It Take To Be A Sound Investor?
Investing your money in anything can be a scary ordeal as there is always a risk associated with any investment you make. Some investments are riskier than others while some are just bad ideas altogether. A sound investor knows where they stand to gain and where they stand to lose and use analytics, data, and knowledge to make calculated guesses that are likely to pay-off in both the short and long–run.
This skill set isn’t innate but rather comes from studying the market, conducting research, and constantly learning and evolving your trading strategy to maximize gains and minimize losses. A sound investor or trader requires both courage and caution in the most perfect balance possible to make sustainable and profitable trades that translates to huge gains for both themselves and any outside investors.
When it comes to trading penny stocks these fundamentals remain the same. Simply copying the trades of more successful traders and brokers than yourself is likely going to get you nowhere as by the time you hear about the trades the opportunity to make money has already gone by. The only way to learn is to educate yourself on how to find information relevant to companies that you are interested in investing in and ofcourse attaining the skill of reading analytics and charts to predict future projections.
All of this and more are taught by successful penny stock traders like Timothy Sykes in personalized courses like his Timothy Sykes Millionaire Challenge that teaches students and traders alike the art of trading. Even though these courses can be quite expensive they are certainly worth the money and time if you plan on trading large amounts of money or taking up stock trading as a full-time profession.
Knowledge & Insight
Luck only takes you that far. Any investor knows that to any investment there is a certain element of fortune that is attached with it but that can only take you that far in the long-run. A successful investor knows that knowledge and insight is the key to making the best trading decisions and watching their money grow.
Staying up-to-date with global news and economic conditions can offer tremendous insight into future projections from an economic perspective. If for example, you predict that the economy is going to take a down-turn it is likely that you would want to sell out and invest in more safer investment options like bonds and savings accounts. However, on the other hand, if you think the economy is likely to boom investing now would make the most sense.
Penny stocks just like any other common stock are dependant on market conditions. In periods of boom penny stocks can gain value quickly and can generate huge returns in a relatively short period of time. In times of recession, these companies can just as quickly go bust. Thus, insight and knowledge are fundamental when it comes to trading and investing money.
Knowledge about the company you plan on investing in is also vital to making sound trades. Finding a copy of there annual reports and screening through there financials can tell an investor all they need to know on whether this company stands to be competitive and profitable in the long-run.
