How to Trade the Best Penny Stocks

Posted on: June 21, 2013
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There are many questions about penny stocks that beginning investors may have. Here are several to look at. The answers may help you get started with penny stocks.

1. Are good penny stocks hard to find?

The answer to this is both yes and no. Penny stocks are easy to find if you have a system that helps you find them. If you don't have a system, it can be difficult but it can still be possible. You have to analyze the market yourself and this can be very time consuming. The effort is worth the potential profits but a system can lessen the time it takes considerably to find good penny stocks. A good system to try is an online penny stock newsletter that offers free or premium penny stock alerts.

2. Can penny stocks make you rich?

Of course. It may not happen over night, though for some people they have made fortunes this way. Penny stocks can offer returns pretty quickly but the key to being a successful penny stock trader is to have consistent penny stock gains. A penny stock can sometimes give you a wonderful return in just days, sometimes hours.

3. Do you need a lot of money to invest in penny stocks?

No. Many investors who are just starting out turn to penny stocks because not a lot of start up capital is needed. Never put your life savings into penny stocks and always invest as much as you are willing to lose.

4. Should all investors invest in penny stocks?

Penny stock investing may not be for everyone. It is a good way for beginners to get into the market as they trade under $5 a share. If you can't stomach risk, then this kind of trading may not be for you. Penny stocks can be extremely profitable but are also very volatile stocks.

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