So Just What are Penny Stocks?

A Brief Introductiona report by Richard Mayhew 2011

What are penny stocks?

Stocks and options that trade for under $ 5 are considered penny stocks. New traders do not like risk, so let's merely have a look at stocks under one dollar. Businesses that want to steer clear of the additional filings for market listings often merely sell their shares over-the-counter as penny stocks. Penny stocks aren't any different than other stocks, just cheaper. AAPL was a penny stock at one time. Considering that penny stocks are less expensive, you can purchase more and possibly earn more earnings.

How do people invest in penny stocks?

Buying penny stocks looks super easy, but does call for a little bit of knowledge. You actually invest in these possibly great companies by purchasing up shares of their penny stocks. The investment technique could take on various forms. Because you might be tempted to buy a few different penny stocks, you will likely need to be just placing all your funds on one winner. Buying shares in just one company is the easiest way to start. You will want brokerage account for starters.

How do you open a brokerage account?

Buying and selling penny stocks require for you to open a brokerage account. It's just like starting a bank account. After registering with an internet broker and making your initial deposit, you are good to go. The majority of broker accounts also provide banking solutions. My personal favorite is Scottrade, but you will find others on the market; you can research and find who works best for you. You are now ready to buy penny stocks, congratulations! Finding good stocks is definitely the difficult part. I'll let you know how I take action.

How do you find which penny stocks to buy?

Determining what stocks to get may be accomplished in a few various ways. Listening to expert opinion may benefit you greatly. However there are great resources for insider trading information, such as email notifications, professional reports, and doing your own homework on a stock. Why do your own personal research, when the experts offer it free of charge? Analyst's research is an invaluable source, nonetheless they cost a fortune. Analyst's research reports are the expensive PDF files you see for sale on popular investing websites. My own preference are free of charge penny stock email notifications.

How can you find a reputable alert/newsletter?

A superb alert service is hard to find. Look out for fakes. I'll let you know how. An alert service which has graphics showing their returns. This is essential. Stay away from web pages promising quick riches. My favorite alert service is National Penny Stocks, try them, of find one that suits you after doing research in Google.

Buy penny stocks, set/limit buy/sells, stop/loss.

Any time you trade penny stocks, never just make a market order and hope all went well, use limit orders. Limit orders enable you to get the stock at the price that you want to pay. You may create both sell and buy limit orders. All a limit order does is say you actually will only pay specifically a specific price per share or I will only sell for a certain price per share. This can help take control of your investments as well as your budget.

Taking your profits

The main element to great profits is knowing when you should sell. Usually, you should do this before everybody else does in a rally. Don't let the greed trap you. Know when to sell. Believing that the email alert service experts know the markets is good, and will tell you when you sell. Counting on the penny stock specialists to inform you when to sell is usually key.

This PowerPoint has been prepared by National Penny Stocks. Please visit us on the web at http://nationalpennystocks.com for free email alerts of our best stock picks.