The Best Way To Conduct Research For Penny Stocks

penny stock researchYou like to trade penny stocks, right?

But do you like to conduct penny stocks research as well?

I know this may be a hard one for many of you.

I hope your answer is “Yes,” if not then you’re the reason for yourself losing so much money. We’ve been reading everywhere over the internet about how dangerous trading penny stocks is, but aren’t we considered as part of the problem?

If you’re trading and not researching first I think you’re the culprit for your losses.

Here in PENNY STOCKS TRADERS, we always stress on how important it is to trade smart. If you’re trading penny stocks without doing any research, then you’re not trading smart.

You’re just taking chances, truthfully if you’re taking chances like this there’s no way you won’t find yourself losing most of your portfolio.

Our goal here is to help you as best as we can possibly do, hopefully you can become a better trader.

Since you’re here reading this post, you’re very lucky because it will help you to stop your losing trend. I’m going to share with you how to go about conducting penny stocks research before you acquire shares from them.

As you may know, when you buy shares from a company you’re actually buying or acquiring a tiny bit of that company. When this company makes profits you do too.

On the other hand, when this company loses money, you lose money as well. Why would you not do your research to find a company that’s able to make profits instead of one that’s prone to losing?

Before putting your money in the stock market you should be aware of the company and its return patterns. This research will enable you to find out a lot about the company, its strengths and weaknesses, profits and earnings and how it has been performing in previous years.

This was stated by Biostockspro. I do agree with it because if you don’t know where you’re putting your money you can’t know what to expect.

And you know that you’re more likely to lose than to win if you don’t know anything about the company from which you’re buying your shares.

How to conduct a good research for penny stocks

First of all, you’ll need to have an idea of a stock that you would like to invest in. If you don’t know any stock, then you will have to use a stock screener to help you with that.

What is a stock screener?

If you don’t know anything about stock screeners you can read this post 7 Great Stock Screeners to Find Penny Stocks to Buy.

It should be able to teach you how to use one to find penny stocks to trade. The good thing about them is that they’re totally free of charge.

We all like free stuff, right :)?

I take the advantage of using them for my best interest because if I don’t use them I would have to pay for a premium one.

Why pay for something when you can have it for free with just a little less features?

Check them out on the OTC markets website

conduct research before buying a stock

Once you find some stocks that look attractive to you either online or from a stock screener, don’t go and start trading them yet.

This is the part that many stock traders got wrong. Spotting some stocks that looks good to you doesn’t mean they’re actually good for your hard earned money.

Remember most penny stocks are not being regulated, but most of them could be found on the OTC website which tells us that at least those are recognized.

If they could be found within the OTC stock market, they’re most likely to be “tradeabe” stocks. But if you look them up and could not find them on there, that should raise some red flags.

The OTC website is by far the most important research source for any penny stocks trader. It stand for Over-The-Counter after all, which is where penny stocks are traded.

Check the U.S Securities and Exchange Commission (SEC)

how to conduct stock research

The SEC requires public companies to disclose meaningful financial and other information to the public. This provides a common pool of knowledge for all investors to use to judge for themselves whether to buy, sell, or hold a particular security.

The SEC is there to help you throughout of your research. Companies are required to put their information public through this organization.

If you’re serious about trading, you ought to use this website for your research because they make it very easy for us to find information on their listed companies.

Check the companies website

If you’re happy so far with every thing you’ve found about those companies, your next move would be to go directly to their websites.

Go there and see what they have, what they’re selling, what are their plans etc…

Anything you  can find about them should be able to help you make up your mind about whether or not they worth your investment.

Remember, trading is investing, it doesn’t matter if you’re doing day-trading. It’s still your money being invested into a company while you’re hoping for the best.

They may refer to penny stocks trading by any name, but at the end of the day it’s still called trading.

If you want to you can even call the company to see if they will have any new products out anytime soon. I know a lot of you think that since you’re not going to hold onto your shares you don’t have to fully research the company.

This is the mistake many of us traders are making and it’s costing us a lot. So stop thinking this way and start researching prior to investing.

I promise you that you will be glad that you did once you start seeing the results of your research.

Check their financial history

This one is very important. Checking those histories will tell you how those companies have been doing. You can see if there’s a chance for them to improve financially which is what you’ll be looking for.

In conclusion, penny stocks are hard to trade because they’re very volatile. However, we still have to do our own due diligent to find the right ones to trade.

You cannot rely simply on your luck and not knowing anything about the company you’re putting your money into. This is not how people invest.

If you’ve been doing that, I hope this post encourages you to stop.

Let me ask you this if you’re a stock trader. How do you know which stock to buy? Please do share with us in the comment section.

Until then, trade smart!