Investing in a hot penny stock is like dancing on the moon

Aug 27 08:28 2010 Brodie Sword Print This Article

Penny stocks are exceptionally profitable. These stocks are traded on the Over-the-Counter Bulletin Board (OTCBB) as well as the Pink Sheets, and they can make more gains in one day than NYSE stocks make in a year.

Penny stocks are stocks that are traded under $5 and usually have a small market cap. Most penny stocks are under $1.  A penny stock is called a “hot penny stock” when the stock gives soaring profits to the shareholder who purchases it at a low face value. Hot penny shares rise in value VERY quickly,Guest Posting sometimes making gains of hundreds or even thousands of percent within days.  However, they are very unpredictable.  Seasoned traders cash in their gains while they can, and don’t hold on too long and risk having their huge profits disappear. 

Penny stock trading is very risky, but NOT if you do it right. There are a few keys to making the most of penny stocks.  You want to get in and out quickly! Many people think they can buy a penny stock at 10 cents, and then one day in a few years it will be worth $100.  This does happen, but very rarely.  It is much more likely that the stock may hit $1.  If it does, you’ve made 10x your original investment and experienced traders will cash in that money instead of letting it ride.

You also must have the right penny stock picks.  If you don’t trade the right stock, it is unlikely you’ll see the profit you want.  Many newsletters cover the penny stock market and send their readers info on which penny stock picks should heat up.

To find the best hot penny stocks, try one of the free newsletters that offer penny stock alerts about stocks that are about to skyrocket in value.  Another key is to sell when the stock IS skyrocketing, not when it’s falling.  Greed is not your friend, the best time to sell is when everyone else is buying.  That means you can sell at a high price.  Once the stock peaks and starts to cool off, you won’t get a good price for it anymore.

In general, penny stock trading is all about getting in early, and getting out early. Don’t be a penny stock chaser, get in before everyone else does.  When the buying frenzy begins, that’s when you want to get out.  Sell at the top!

Once you learn to master trading penny stocks, you will see profits beyond your wildest dreams.  Successful penny stock traders make more than hedge fund managers.  It’s all about practice, practice, practice.

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Brodie Sword
Brodie Sword

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