Making Money with Penny Stocks

Posted on: May 13, 2013
invest

Can you make a lot of money with over the counter penny stocks? Yes, you can. But the amount you can make relies a lot on how much homework you do and how much discipline you practice with penny stock trading. Penny stocks can be very volatile investments and you should never put a dime into them unless you do your homework first. They can create huge gains quickly but also collapse fast too. If you want to trade penny stocks you must monitor your investments constantly during the market hours and if you see a profit, take it. Also use stop loss orders to minimize losses.

There are many good reasons to keep penny stocks in your portfolio. They don’t cost a lot. Penny stocks are defined as stocks that trade under $5 a share. Typically you will see many penny stocks trading as low as just ten cents a share. You can buy thousands upon thousands of shares of penny stocks but you may never own thousands of shares of a blue chip stock unless you are filthy wealthy. Owning so many shares of a penny stock can help you make a reasonable profit if the penny stock starts to climb. If you own 10,000 shares of a penny stock and it moves up one penny, you already made $100.

Penny stock trading isn’t gambling if you spend time researching. You need to educate yourself in all aspects of the companies you want to put your money into. Pay attention to the industry in which the company is involved with and look at the management and products/services that the company offers.

Penny stocks make up an over whelming percentage of all the stocks traded in the market every day. These can be very rewarding investments for the investor who understands them and has the discipline to trade them.

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