Tips And Tricks For Successful Penny Stocks Trading

John Hoelscher
5 min readJul 22, 2020

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When it comes to penny stock trading, there are a few criteria that you have to look into before investing. They are as follows.

Volumes

Remember to always check the volume of trade. You have to see if there are good volumes for the penny stock or at least 100,000 at any given point in time. Anything less will mean that the stock is moving very slowly. You have to try and pick a company that is traded on a day-to-day basis and not on a weekly or monthly basis. There is no point in investing in a company where there are many sellers and few buyers at the same time, if you are looking to invest in a company where many buyers have queued up then your chance at buying the stock might never come about. So, you have to pick a company that will allow you to avail of the stocks with ease. You can take the help of your broker to find the ideal company and if you don’t have a broker then you can do a quick search of the best penny stocks to invest in and invest in them.

Results

It is extremely important to look for good result oriented companies. As soon as they publish their reports you have to check them out and ensure that they are going to be good investment choices. The results should be such that the profits have surpassed expectations. Generally, small companies aim for results in a few hundred thousand and if you are impressed with the numbers and also know what their liabilities look like then you are good to invest with the company. Remember that these results are always published quarterly and it is important for you to look at all the results and then judge whether the company is good or not.

Name

The name of the company will also matter quite a bit. You have to see if the company is famous and has made a name for itself or not. Even if it is not really famous it is important to see whether there are any tarnishing stories. Some people prefer not to invest in such stocks and will keep away from them. But if you are not a fundamentalist and only rely on technical analysis then you can invest in any company of your choice. But it is important to do a background check of the company in any case.

Reliable Information

Remember to take your information from reliable sources always. The information should be trustworthy and not spurious. If you get a tip-off about a certain company you have to ensure that it is 100% reliable and will help you make the right investment choice. There is no point in choosing a company whose false rumors have caused a spike in its stock’s demand. You will end up wasting your money and the stock will not prove to be a good investment. Therefore, it is important for you to avail only reliable information and invest in good penny stock companies that will work well for you in the long run.

Best Stocks to Buy Now

It is important for you to remain patient during corrections. The stock price will drop when corrections are going on and if you are impatient with it then you will end up losing money. You have to look at the status of the company and also do all the calculations to see if it has been listed at the right price. If it is over or undervalued then the corrections are bound to come about. You have to remain prepared for it and wait it out instead of selling short in a panic. You can check any of the news sites to see if a correction is happening.
Penny stocks trading can promise huge returns when done right. We will look at some useful tips that can be of great help in helping you increase your yields.

Don’t hire penny stockbrokers unless you really have to

One of the most important things to do is not to hire penny stockbrokers unless you really have to. These brokers usually require higher commissions and multiple fees, which may eat into your penny stock earnings. Furthermore, penny stockbrokers will be paid a commission whether you experience financial gains or losses. So they will not put in the efforts to ensure that you always remain in gains. There are also theories that the company will try to employ those that have good convincing skills and even when you are not interested in a particular stock, you will end up buying it. Look for a discount online trading place that will give you the opportunity to trade penny stocks independently and not depend on the brokers to do your buying and selling.

Don’t invest in penny stocks whose trading volume is less than 100000 per day

You should also choose the penny stocks you want to invest in very carefully. Try as much as possible to avoid those that trade in a volume less than 100,000 per day, as they are likely to be less liquid. As you know, the price per share of these stocks is very low so you must look for those that are actually being traded and not merely having a good low price. If the prices of such stocks start coming down, you are unlikely to find someone willing to buy since the shares’ volume is quite low.

Best Stocks to Invest in are penny stocks from the same industry

The trick to making it big in whatever kind of investment you are making is to diversify. This is the same case with investing in penny stocks. Never invest in penny stocks in the same field of industry; however good the industry may be doing since if such an industry starts crushing, you would lose all your investments. It is always best to diversify your risk when you invest in the stock market. If you think the IT industry is faring well and it will pay you well to buy stocks from companies that belong to that industry then it is best to reconsider your evaluation and split your risk to ensure your investment’s safety.

Focus your attention on the company behind the stock

While focusing your attention on the actual stock is a good strategy, focusing your attention on the company behind the stock is the best strategy. You should know if the company is working on any technologies, new products or services, and innovative products, as this will affect the price of their stocks. The best way to do so is by looking at their fundamentals and also reading their news. These are the best places for you to study the company’s internal details. If you have knowledge about the company’s products then do a self-analysis to understand where the company is headed.
Always be informed

You should also ensure that you are informed of everything that may be happening in the penny stock market. Ensure that each day you scan through publications or other resources that may have some coverage on penny stock activities.

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John Hoelscher
John Hoelscher

Written by John Hoelscher

My Name is John Hoelscher. I am a professional YouTube video marketer, content writer, SEO and digital marketing expert.

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