How to start trading penny stocks

Posted on: May 3, 2013
money pile

The first thing you should do when starting to trade penny stocks is to decide on what your initial budget will be. It is recommended to start with a budget between $100 and $1000. If you can afford it, choose to do the $500-$1000 budget. It can help you make money faster, but even a $100-200 budget is enough to get started with penny stock trading.

It’s not recommended to start with more than $1,000 for several reasons, epecially if you cannot afford it. If you want to learn to trade penny stocks the right way, you must start with just a trade or a few trades at a time. Putting more money into the pot can leave you with big losses when you are just starting out. You’re just getting your feet wet. You do not need to risk your life savings or more money than needed. This minimizes risk and even in the future as you continue penny stock trading, you never need to put all your eggs into one basket. Many traders make a lot of money trading penny stocks by putting a little bit of money into many different ones at a time. Very experienced penny stock traders who have been trading for years often don’t put more than $5,000 into a single penny stock trade.

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