Benefits of Penny Stocks

Learn with Paper Trading

When you are getting started, you should keep your investment amounts low. Don't put all your money into one stock, and when you do invest make sure that you understand the company and have a good reason to think the shares will increase in price.

You may even want to try 'practice trading' with by paper trading before you start with actual cash. Watch the stocks of a few of your favorite companies for a few weeks, to get a feel for the market.

Most importantly, be honest with yourself. If you know you won't or can't do the research required to pick good penny stocks, you should either give up on the idea altogether, or get the assistance of a professional stock picking newsletter. Using a newsletter has helped thousands of people get involved in penny stocks and start profiting from day one.

After finding the right penny stock, you have to determine when is the best time to enter the stock. You must execute your entry in an appropriate way. It helps to analyze the trading chart of the penny stock for a few days before making any moves. A penny stock’s trading chart can offer some valuable information.

You can also read through message boards to get ideas on what other people are thinking. Patience is an important factor here.

So, when should you sell the penny stock? Selling a penny stock can be a very personal thing. Every investor is different and has a different idea and goal in mind. Some investors implement a strategy soon after entering a penny stock. Others decide later. Sometimes it can be very good to sell a penny stock when you have a profit of around 25 to 35%. Some investors want a profit of 50%. Some will sell when they see a 25% PPS spike but keep some shares in the stock to ride out any momentum that may still be left. The selling strategy can be very flexible, and it is up to you to decide when you are happy with your profit.

Keep in mind that any profit is a good profit and usually when a stock comes out with good news, most of the time people will sell and it can impact the penny stock’s run.