Some of the Best Penny Stock Strategies to help you to Be Successful as a Newbie

penny stock investing strategies

Do you have any penny stock strategies to follow yet?

Penny stock investing is very rewarding, very easy to get involved in, and has huge potential to make lots of cash. But don’t get fooled by all these wonderful characteristics because penny stock investing can make you go broke in a blink of an eye.

Therefore, you should have some proven strategies that can help you make profits trading penny stocks. New investors usually have an urge to start investing their money in penny stocks although they haven’t learned some of the tricks yet.

It’s a common mistake that’s costing them so much money. If you’re reading this post right now there’s a good chance that you’ll not be one of them. You’re reading because you want to learn first, I applause you for that. You’ll be so glad in the future for taking this time to educate yourself before you start with this venture.

What’s considered to be a penny stock?

This name doesn’t really represent it as it should. Penny stocks aren’t only those being sold for a penny per share. In fact you’ll see so many penny stocks selling at 5 dollars per share.

So to give you a meaning to penny stock, it’s any stock that’s being sold at five dollars or under per share.

Since they’re so cheap when comparing to big companies, you’re able to buy more shares while you don’t even need to have lots of money in your account.

However, they’re so dangerous, more dangerous than the regular stocks. For this reason it becomes even more important that you educate yourself, learn some good penny stock strategies before you start investing.

Some proven penny stock strategies to follow

In order to survive in this market you’ll have to be very careful. Any mistake you make can hurt you a great deal, so pay close attention in everything you’re doing while trading penny stocks.

Don’t buy sub-penny stocks: I know they’re the most affordable and attractive ones, especially if you don’t have much fund in your account. The truth is that they’re also riskier due to their unpredictability.

Investors who would invest in them are those who are much more experienced, they have a better idea as of when to get on board and when to stay far away from them. As new investors you shouldn’t buy shares from those tiny companies.

Furthermore, they’re more prone to con-artists. There’s something called “pumps and dumps,” which is when a stock is being advertised to inflate the price so that the advertiser can make profits.

It’s a very common activity that you should try not to be preyed on by; many people have lost their money this way.

Don’t hold a penny stock for longer than one day: That’s why it’s also called day-trading, we are day-traders. If you want to hold a stock long term in your account then penny stocks aren’t for you. Again, some experts in this domain may want to do so and be able to make profits from that, but it’s a different thing in your case.

It’s better if you can sell your positions before the day is over if possible. If you can’t do so, then try to sell it the next day as long as you’ve made some profits.

Don’t be greedy: It’s one thing that’s losing so many new investors their hard earned money. Being greedy is good sometimes, but you’ll never know what the final result will be until it’s right there in front of your face.

Always have a level of where you want the price to get so you can sell your positions. Once your goal is reached there shouldn’t be any changes in your mind.

Always use stop loss: Stop loss is there to stop you from losing too much of your money in the case where your trade is going against you. It’s one of the most important features found on all brokerage platforms.

Also you might want to move it upward as the price is going up, which will enable you to at least make a profit if you didn’t get the chance to sell at your desired level. This feature shouldn’t be ignored, it can be very helpful.

Use limit orders: When you’re buying stocks the price you see while you’re putting in your order request may not be the real current price. There’s a little time lag that causes this difference.

So if you don’t put in a specific price at which you would want your order to be executed, you may find yourself buying a stock that’s far more expensive than you thought. But if you’re lucky it may be cheaper for you too depending on the direction made by the stock.

To stop that from happening you should always utilize a limit order. It’s where you want your shares to be bought. In order words, it’s like you’re giving an order telling your broker at which price you want to buy your shares.

Note that, if the price never hits your set price you may not get your position filled. But it’s the best way to make sure you aren’t buying a stock for more money than you saw it listed.

To conclude

Knowing some penny stock strategies should be something of interest to you. You can’t be a stock investor and not having any set strategies to follow.

As a new penny stock investor, don’t start trading until you feel ready. Rushing to get started will most likely result from some big losses. But taking your time to educate yourself is more likely to make you a winner.