3 Set of Strategies for Picking a Winning Penny Stock to Trade

Are you looking for ways or strategies to pick the best stocks possible for your day-trade?

Well, who’s not? Especially with everything we’re currently going through. A pandemic is still hurting us on many different levels, economically, we are not doing well.

As millions of us are becoming unemployed, investing in stock is becoming a more utilized mean to make money.

Nonetheless, many of us also don’t know how to even place a trade. Though, this post will cover how to pick the right penny stock to trade.

I don’t care what other people have told you before you stumble on this post. Picking a penny stock that has the ability to make its traders money is a difficult task.

I wish I didn’t have to bust your bubble but the reality remains that it’s not easy to find a penny stock that will make you tons of money in return.

Fortunately, there’s countless number of companies to pick from, many of those companies aren’t trustworthy while some of them can make you some profits.

So, how do you pick the best penny stocks possible which could possibly make you some money?

In this post, I will share with you three set of strategies that may be able to help you to pick the best winning stocks possible. With that being said, let’s get straight to those points.

The first strategy for picking a winning penny stock to trade:

Conduct your own research.

This is a no brainer, your research should be your priority because you’ll always put in more effort into your research than anyone else would do for you.

What I’m trying to tell you here is that to not rely on anyone else’s research. Why would you trust someone else’s ideas on where to invest your money, which stock you should buy or sell, and when you should or should not trade?

Not that you can’t start by looking through someone else’s research to further yours, but the idea of relying solely on your friends or colleagues may hurt your portfolio. 

From my experience, if you really want to make money through penny stock trading you’ll definitely have to conduct your research.

So, instead of blindly taking advises from other people just conduct your own research to be safe.

I keep saying conduct your research, conduct your research, but how can you really do that?

First thing first: Do a Google search to find out whether or not this company you’re looking at is real.

It’s the most important part of your research and yet so many investors usually ignore it. Many people think that just because they find a stock on the trading platform it’s automatically qualified as being safe or real.

They’re mistaken; you’re in charge of knowing whether or not the stock you’re going to put your money into is authentic.

No one else will ever take charge of that for you.

Secondly: Search for the company’s means of making money. Believe it or not every company makes money one way or another. Knowing where their revenues are coming from is very important as well.

If money is not coming in there’s no way for you to make your profit. Therefore, you should always know how a company makes its money before you invest yours into such a company.   

Thirdly: Look into its competitors. How’s the market looking for the company you’re about to be part of? Are there any advantages or dis-advantages when it comes to competitions?

These can lead you toward a more thorough research, the more information you gather the better it gets for you.

More about stock research here.

The second set of strategy for picking a winning penny stock to trade

  • Educate yourself

To be honest with you, penny stock trading can be very risky. But there’s a saying that “The greater the risk, the greater the reward.”

You can make lots of money trading penny stocks; you can also lose a lot. If your knowledge about penny stocks trading isn’t strong enough, then you should first educate yourself.

Don’t just buy some penny stocks which you think will be going to give a positive performance while you have no understanding of what you’re doing.

It’s just a recipe for disaster and you don’t want that to happen to you. Believe me because I’ve been through it and I would not advise you to do the same.

  • Analyze the company

Like I said previously, you have to know the company in which you’ll invest your money in.

Is the company in a lot of debts? It’s ok to see a company that has some debts because having debts doesn’t mean it’s red flag per se once it’s found.

But if the level of the company’s debt is astronomically high, then it becomes a red flag. That’s when you should pull yourself back and think whether or not this company deserves you as an investor.

The third set of strategy for picking a winning penny stock to trade

  • Analyze your level of risk

Risk will always be a part of your day-trading; hence, it will always be a part of any method of investment. You’re going to have to acknowledge that in order to diminish your risk.

Shutting your eyes on the risks associated with stock trading can only result in a more detrimental result if you’re unlucky.

Anyone who tells you the stock market is risk free is straightforward lying to you. You shouldn’t fall for such misleading information which could potential cost you a lot.

  • Look for volatility

The effect of volatility in the penny stock market is tremendously huge. First, let’s put a definition to it: It’s the tendency to change quickly and unpredictably.

Being so unpredictable is why it’s so dangerous trading penny stocks. As a result, many stock investors prefer to invest their money into the regular stocks.

Some are more volatile than others and the more volatile they are the more likely they are to go up or down in price. Consequently, you’ll need to be ready either way while you’re trading those penny stocks.

Conclusion:

If you want to be penny stock trader, then you should first educate yourself. Penny stocks can be very risky, but if you have the knowledge, you can occasionally pick the best winning penny stocks available in the market.

Just do the market research on your own, don’t listen to the rumors, and if you’re new to stock trading, invest within your limits. Analyze your level of risk; i.e., how much risk can you afford and then play within it.

If you apply all these strategies it will definitely help you in the long haul. If you think that this post is helpful please share it with your colleague on the social media platforms.

Don’t forget to comment as well to add your input for the readers here.  

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