Tips On Buying Penny Stocks - What Stocks to Invest In

Penny stocks are stocks that cost less than to buy or sell. They can be found through discount stockbrokers online. Their advantage is that they have lower prices than the regular stocks which make it easy to own them.
In buying such stocks, a budget of 00 to 00 is needed to get you started in todays economy. Therefore, first, its good to start saving for investments. You may need to register with a broker online whom you can contact to get more information on companies that trade penny stocks on OTC or pink sheets.
Secondly, check Securities Exchange Commission fillings on the companies you are interested in online. To get financial statements, call and talk to the company directly. You can also talk to someone who has knowledge about the company. If you want to buy these stocks, open a brokerage account with low commission rates from brokers online.
Thirdly, look for companies that have charts available using stock screener. You need to learn Technical Analysis using books and guides online so that you are able to analyze those charts. When buying these stocks online, the venture is not easy and can be risky. To reduce the risk, invest a small amount into each penny stock and then diversify.
Fourthly, when trading in penny stock, use a limit order one that reduces the risk of a great price change when an order is placed. The prices you may get vary greatly since these stocks are often traded thinly. Your order can then be submitted to an online broker. After funding your account, you can place either buying or selling of the order.
Fifthly, gather information on trading symbol of your stock, the number of shares you want to trade, the price to be paid and the duration of time you need for the trade.
Sixth, read online newsletters and forums to find what other investors say concerning certain stocks and ask your broker for more suggestions. Decide on the stocks that look promising and begin purchasing your stock. To begin investing, simply enter the trading number for the penny stock and type in the dollar number you want to invest.
Moreover, you should be able to understand how the stock market works and combine that knowledge with technical analysis. After this, find stocks that sell low and buy them. Use your stock broker to do a daily monitoring of the stock. You should sell immediately whenever the stock price goes up to get profit or when it goes down to minimize loss.
Something worth noting is that penny stocks have attracted many investors because of the opportunity to earn more stock. For example, a stock of 50 cents can go up by 25 cents which is 50% profit. The fact that a ,000 investment can buy 10,000 shares convinces the investors that micro caps stock are rapid. However, penny stocks can go down. For instance, a stock of 50 cents can go down by 25 cents and lose its value by half. Therefore, do more research before venturing into it.

Source: http://whatstockstoinvestin.com/tips-on-buying-penny-stocks/

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