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/