Determining the Best Time to Do Penny Stock Trading

When is the best time to do penny stock trading? As with any investment in any type of stock, everything is speculative. If everyone could determine the exact time to jump in, then everyone would be a millionaire. However, there are of course a good and bad time to trade. Due diligence is something that many experts recommend to both new and experienced traders. While stocks are generally considered to be a very dangerous investment, the rewards are also huge. You probably know by now that the key is to minimize the risks of investing in pennies. You should be able to search for some signals that indicate it is a good time to purchase a penny stock.

 

Conventionally, a penny stock is any stock trading for under a dollar per share. But you will hear that it is technically any stock that sells below $5. Getting started with this type of stock trading is easy. Simply work with an online stock screener that categorizes all stocks below $5 or $1. A stock can trade for a very low amount since the stock is issued by a businesses that is still small and starting out, hoping to grow. There is a risk here since because in reality, new companies can just as easily go out of business. On the other hand, which is evidently viewed negatively, a penny stock can also be a stock of a business that’s been operating for some time but has fallen into a downward spiral financially. So be careful what you pick – these are just some basic precautions, which you will soon learn through experience how to tell when to invest in a company or not.

 

If a stock has gone way down, don’t jump in, unless if you really believe that the business will be able to get back on its feet in unlikely times. Perhaps there will be new management. Or maybe there will be a big merger coming up. Still, if a stock price gets under a dollar, it is most likely that it’s not coming back up. Thus, comprehensive research, observance and experience will give you a better idea when the best time is to do penny stock trading.

 

If you start out with hot picks, you’re on the right track. Starting out with worthless picks will only mean a road to disappointment. When penny stock trading, you’d want to look for those companies with the highest potential. Try to focus on technology, target a niche, and work with acquisitions and mergers with larger companies.

 

Penny stock investing can be a good venture if you know where to invest your money on. Consult with Paradigm Capital Management to find the hottest penny stock list online. Find tips and tricks from the Paradigm Capital Management experts, and start building your penny stock fortune now.

 

Read also: A Look Into High Volume Penny Stocks

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Preparing Your List of Penny Stocks to Trade Profitably

Well, its not unusual for new investors to prepare a list of penny stocks that they can hope to build their fortune with in a highly lucrative stock market. Trading in penny stocks indeed appears very tempting and lucrative, its especially popular amongst small investors who intend to build a fortune with very little capital to invest with initially.

 

In that case who wouldn’t be tempted to buy such dirt cheap stocks in such huge volumes. Lets suppose you as a day trader invest $500 to buy 5000 shares @ $0.10 of a highly potential penny stock, and after few weeks if the price of such a share increases by say 500% in that case the share price would be $0.50 each. So an investment of $500 would then fetch a return of $25000. That too in matter of weeks. If you had invested $500 for a large cap share, it won’t ever give you a 500% return, that too in just few weeks time.

 

No wonder day traders are so much obsessed in preparing a list of penny stocks and narrowing down their focus on just few of these that they wish to build their portfolio with four or five of the hottest penny stocks. Now how does one really go about scouting for such shares with which to build a list and then trading them for fortune. For this one needs to carry out research and analyse the results to find which amongst the stocks are generating interest amongst investors that has resulted in some kind of momentum. How is the shares moving and what kind of pattern does it make, that instantly is a hit and considered hot for investment.

 

A novice will be overwhelmed with the large flow of data from various sources including stock exchanges. Moreover since the shares are valued less than $5 hence they are not subjected to strict regulations of the SEC to disclose everything about its nature of business, its future plans, its past performance etc. All these details are available only with expert traders and brokers. Moreover the market being extremely volatile makes trading in penny stocks highly risky. Its always reminiscent of a war zone kind of situation for investors to put in their money with the hope to build a fortune around it. There are risks of investing in over hyped stocks and being victim of a pump and dump scheme by scam artists waiting to grab your money.

 

There are of course sophisticated stock technical analysis software and newsletters offered to paid members from highly reliable and reputed sources who can help you to prepare a list of penny stocks to trade profitably with details of entry and exit points, to minimize risk and for maximum gains.

 

To learn more, consult with the experts at Paradigm Capital Management, a penny stock and hedge fund managing firm. Our three decades of experience provides an exceptional level of insight that is reflected in our high-conviction portfolios.

 

To learn more, visit here: http://www.paradigmcapital.com/team/key-personnel/

Where to Find Penny Stocks? Digging in the Stock Barrel

Where to find penny stocks is usually the first question that is being asked by those who plan to invest in such stocks or by those who are new to the stock trading business.

 

Penny stocks are cheaper by a large margin by nature. This is because these types of stocks are usually being offered by companies that are just starting out. The downside is that penny stocks do not hold the same level of esteem and security as higher quality stocks. However, this does not mean that penny stocks are not worth investing in. On the contrary, a lot of people have realized huge returns of investment through penny stocks.

 

It is easy to find penny stocks if you know what they are. This kind of stock is usually being offered at a low price in moderate quantities. Also, these are usually offered by companies that are not quite known in their respective industries quite yet. Fortunately, in most stock markets, there is a separate column where penny stocks are identified and listed. In other stock markets where these are not identified, you can identify penny stocks by their price offering, quantity, and by the company offering them.

 

Once you have identified which ones are penny stocks, you must then decide on what stocks to buy. There may be a time when you will be overwhelmed by the number of stock offerings. The first thing you should do is investigate the background of each company offering the penny stock that you plan to buy. That way, you eliminate any risk of being defrauded.

 

It is necessary to do some research also on the stock and to ask for advice from veteran stock traders. By reason of their extensive experience and practical knowledge, veteran traders know where to find penny stocks and which stocks to invest on.

 

To learn more, consult with the experts at Paradigm Capital Management, a penny stock and hedge fund managing firm. Our three decades of experience provides an exceptional level of insight that is reflected in our high-conviction portfolios.

To learn more, visit here: http://www.paradigmcapital.com/team/key-personnel/

The Best Penny Stocks to Buy Now Deserve Contemplation

What are the best penny stocks to buy now? The sad truth is that over 90% of all penny stocks go to zero. Think about it, stocks never start at pennies per share, they can only get that low if something has already gone dramatically wrong. Some people talk about how certain major stocks all used to be penny stocks but most likely this is false.

 

The truth is they were worth a minuscule fraction of the price that they are currently valued at, but that doesn’t mean they were penny stocks. Stocks do something called a stock split, the stock price is cut in half, and the amount of shares available double. In addition the people who own shares are given the chance to own twice as much. What appears to have once been a stock worth pennies may not have been. The best stocks to buy now, aren’t necessarily worth pennies, but they will have that appearance once they have gone up significantly.

 

You have to really understand statistics if you want to invest in penny stocks and you have to apply it. If a stock either doubles or goes to zero, and you get it to double 10% of the time, that’s not math that’s in your favor. However, if the stock went up 10 times the amount and went from 10 cents to $1 or more, then you have the system working. 9 times you will lose 10 cents, but on the 10th time you gain 90 cents or more. So that is the break-even point at a minimum. Unfortunately, this can still be a losing proposition if you can’t handle money management.

 

In order to maintain your ability to buy stock, you will need to be able to continue to invest. If you buy 10 stocks and you lose, you will be unable to buy any more if you invest 10% of your bankroll. You will be putting the odds against you. Now that’s why you need to never invest more than 2% of the your money available for trading. That’s enough to handle going quite a few times without a win and still having enough invested to dig yourself out. Buying penny stocks more so than any other is about money management. There are no sure things. The fact is most cheap stock investors are hoping to get rich off a lotto ticket. It’s not really smart to buy stocks just based on their share price. It can be a reasonable strategy if you really know what you’re doing. However, there’s so many stocks available, it’s better to focus on buying stocks. You should be looking for the best stocks to buy now, not the best penny stocks to buy now.

 

If the stocks happen to be penny stocks, then you can still buy them, but understand that over 90% of traders go broke at least once and over 95% of these buyers lose it all. So the best penny stocks to buy now, are those that also happen to be the best stocks to buy now. If it’s not the best stock, it has minimal chance to go up. That’s why there’s no room for me to give actual penny stock recommendations because most stocks for cents on the dollar don’t pan out. I’d be fighting the odds, and you have to understand that first before you think you know the best penny stocks to buy now. It’s possible to know the best penny stocks to buy now and still lose it all. The reason is, everything has a chance to go to zero, just as everything has some chance to go from its current price to double or triple.

 

Stocks under a dollar have the highest probability of going to zero. Stocks never debut for under a dollar on the Nasdaq or New York Stock Exchange. The best penny stocks to buy now aren’t sure things, they’re just “less uncertain” then all of the others. Maybe the best penny stocks only go to zero 70% of the time. Sure if you lose your investment 7 out of 10 times and make 10 times your money, it’s a good investment, but only if you have correct money management. Most people have $1000 to invest, and they invest $300, and lose it all, and then they only have $600, they invest $200 and lose it, they have $400, they invest $100 and they lose it and now $300, they invest $50 and then they lose and with $250 they invest $20 and the stock goes from $.10 to $1 ad they sell but now they only have $450 which is less than what they started with. So you can see how it’s possible to have what looks like a winning trade on paper.

 

They won on the 5th investment and had they kept all the investment size about the same, they would have ended up having tons more money than they started with. In fact, if they invested $50 5 times, they’d be down to $750 then they invest $50 more and they’d be up 500 to $1200 and it’s a 20% gain. Most people go broke not because they select bad stocks. They may be convinced that the free stock picks was simply bad advice, but in reality it may have been excellent advice that just didn’t work out. The cold hard truth is that you can’t really make money with cent stocks without good money management whether you like it or not. That leaves almost no room to really get rich off these super cheap stocks, but you certainly can manage to find some room for profit. There’s a reason why you never hear stories of Warren Buffett or Monish Pabrai investing in 99-cent stocks or cheaper. First the market cap is so small they would probably buy half the company with the change in their pockets compared to the average Joe. Second, they never got rich off buying penny stocks because most of them don’t work.

 

Well the best penny stocks to buy now just don’t exist in the way you think they do! That does not mean that it’s a worthless endeavor to buy penny stocks, it just means that those stocks deserve contemplation. first ask yourself “would I buy this right now before all other stocks?” “Is this best penny stock to buy among all best stocks to buy?” “Am I trading these stocks worth pennies with a trading system?” “Do I have correct money management?” There are several other factors to consider. In general you should be very careful when buying penny stocks and understand that there are other factors that determine whether or not a stock is cheap. Just because it is worth cents on the dollar, does not necessarily mean it is the best penny stock to buy now and that it is the most undervalued stock out of all of them on the market.

 

To learn more, consult with the experts at Paradigm Capital Management, a penny stock and hedge fund managing firm. Our three decades of experience provides an exceptional level of insight that is reflected in our high-conviction portfolios.

 

Read also: The Importance of a Penny Stock Broker for Successful Online Trading