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2011-07-18 22:59:36 (UTC)

Penny Stock Strategies

If you are looking to diversify your investment account with the addition of stocks and you have limited capital to trade, then penny stocks may just be your calling. Be warned, however, that penny stocks are very high-risk although very rewarding investments. If you play your cards right, you can make considerable gains and if you do not, you could end up being cleaned out. To prevent that from occurring, read the folliwing info for picking and buying penny stocks.<br /><br />Selecting the most appropriate Penny Stocks<br /><br />These types of stocks are usually traded by means of quotation services like the Pink Sheets and the OTC Bulletin Board, with very little regulatory requirements for being listed on these websites. It is because of this specific reason that penny stocks are high-risk opportunities particularly once the issues of lack of financial reporting requirements, limited liquidity and Internet fraud are thrown in. As a result, the importance of doing your own research can't be over-emphasized. You need to check into the company's story, its organizational structure, its financial liquidity and stability, their future business plans, and their reputation inside their market.<br /><br />The methodology for researching penny stocks is identical to how you would analyze any business in terms of the info you are trying to find and review. The info is just harder to find. Do your due diligence. Bear in mind that quite a few of these companies have previously been listed on the larger exchanges but were de-listed for various reasons.}<br /><br />Penny Stock Trading Strategies<br /><br />When you have winnowed your research to a couple of penny stocks, you can go to the next step which is choosing the right trading strategy. Again, these strategies are not very different then trading the stock of a company listed on the larger exchanges. The one significant difference is that the volatility of penny stocks can be dramatic and you must pay attention to the ticker.<br /><br />* Have an entry and exit plan and follow it. Have set price limits for both the buy and sell. Also have time limits on how long you want to hold the shares. The penny stock market being so volatile, you must neither be too greedy nor too speculative in taking risks. If you are unable to do this then trading is maybe isn't for you.<br /><br />* Listen to your own common sense. Trust your research. Many investors have made bad decisions by paying attention to "insider information" and hot tips. There are some newsletters and internet sites which do offer excellent tips yet there is a lots of hype out there. One resource that I have come to rely on is The Penny Stock Prophet.<br /><br />* Let the trend be your friend. The market is right. If you follow the trend and do not get very carried away, profits are available for the taking.<br /><br />* Exclusively buy companies you did sufficient research on. You aren't going to be prepared for every opportunity but with persistence along with great analysis you will get your fair share of winners.<br /><br />As time moves on the work involved with finding penny stocks will get easier and your portfolio (and profits) will grow.<br /><br /><br /><br /><a href="http://pennystockstobuyasap.com/the-allure-of-penny-stock-investing/">Penny Stock Strategies</a>, <a href="http://pennystockstobuyasap.com/the-pennystock-egghead-proven-pennystock-trading-system/">Penny Stock Strategies</a>, <a href="http://pennystockstobuyasap.com">Penny Stock Strategies</a>


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