The other day I read an article on this specific topic where this question came up. I think many of you may have asked this question before. Should you introduce your young ones to this market? I decide to give my input on it, hopefully it might help some of you.
We all know how risky it is to invest in the OTC market, we also know how volatile this market is. Its volatility can be in your advantage as well as against you. But there are many techniques that you can use to ensure that the risk stays at a minimum.
Knowing the how to is the key to success
To be successful in anything, not only trading, it always requires knowledge on what you are about to undertake. Well, knowing how to trade penny stocks successfully is what you should work on with your potential new young investor.
If someone is mature enough to start thinking about investing, then he or she should be able learn the strategies required in this venture. You may have stumbled upon many of these stories where a young guy becomes a savvy in trading penny stocks.
The secret to this is nothing you have not heard before, the main reason they got so successful is through doing lots of research. As a matter fact, everything you need to know to be a millionaire from trading penny stocks can be found online for free. But the only way they can be found is by spending some dedicated time looking for them, they will not pop up on your screen by themselves.
Young investors are usually the ones making lots of money in trading the OTC. They know they are not financially stable, they tend to take more precautions than those who are financially stable.
Tips to share with young investors
1- It is not a game: When trading those type of stocks they give you a good feeling as if you were playing at the casino. This feeling can cause you to lose money because you would think that you can still win more when it is selling time. They should be taught not to think like that, it’s the number one rule of thumb.
2- Know when to stop their loss: From my experience this can be detrimental to someone’s portfolio. I happened to lost a good amount of my portfolio in the past due to not being able to accept the loss. Sometimes there is not anything better to do than stopping your loss.
3- Don’t invest in stocks that don’t have much buyers: These stocks are usually in their declining mode, you would most likely see them keep going down in price after you have purchased your shares. You don’t want this to happen, it’s not the goal of investing.
Share your opinion with us in the comment section. Would you introduce your young ones in the penny stocks market?