Penny stock investing, as the name implies, means dealing with stocks that have a very low price Buy penny stocks should be an easy way to make a bit of money, right? Not necessarily. But that doesn't mean that the penny stock market is a more controlled environment.
In reality, it is considered just the reverse. It is more difficult to foresee what would occur with a particular penny stock, as the market moves upwards and downwards really fast. The little cost of every stock signifies that it is extra enticing to purchase more shares and so a considerable sum of money could be moved very rapidly either upwards or downwards.
Trading in penny stocks is fraught with higher degree of risk than its counterpart - traditional trade, as there is none to control the trading activities of these penny stocks. Traditional trades are highly scrutinized and monitored by exchanges like NASDAQ, there is not much chance of manipulation in their prices and of illegal activities. As majority of trades in penny stocks take place outside these secure exchanges, there is high chance of fraudulent, manipulative and illegal activities. However, risk is quite lower for those penny stocks which trade in secured exchanges.
You have to take into account the practice of the pump and dump, when considering to buy penny stocks, what happens here is that shady individuals and groups will attempt to drive up the price of a stock through manipulative means, and then sell all their shares, leaving others with the now worthless stock.
This tends to happen, for the most part, by posting inaccurate data regarding allegedly hot penny stocks, thus pushing people who dont know much about our financial market to make investments in particular stocks, and disseminating inaccurate info regarding various companies via spam, penny stock newsletters, or a number of message boards. After the stock has gotten artificially pumped up, these folks sell shares at major profit and stop promoting the stock, thus causing the stock price to drop.
Even if you associate yourself with a reliable company, the risks will still persist because of the fast moving nature of the penny stocks. They move so rapidly that even the company name and reputation cannot stop it from falling. However this fast movement can become a boon if you have time enough to monitor your stock on a consistent basis so that you can sell and buy penny stocks at the right time.
You need to be on top of your investments, checking them constantly. In as short a time as a few minutes a profit can turn to a loss.
Success in penny stock investing requires time and patience, and if you don't have either then you can end up losing the money you invested. Your decision to buy penny stocks can earn you both success and failure, financially.
Most of the people think that if they have money they can earn money in the stock markets. However the most important thing which is required to make money is total dedication and your time. If you cannot give time to the trading then it will have bad results rather than doing any good to you. The services of a penny stock trader can help you in such conditions.
In reality, it is considered just the reverse. It is more difficult to foresee what would occur with a particular penny stock, as the market moves upwards and downwards really fast. The little cost of every stock signifies that it is extra enticing to purchase more shares and so a considerable sum of money could be moved very rapidly either upwards or downwards.
Trading in penny stocks is fraught with higher degree of risk than its counterpart - traditional trade, as there is none to control the trading activities of these penny stocks. Traditional trades are highly scrutinized and monitored by exchanges like NASDAQ, there is not much chance of manipulation in their prices and of illegal activities. As majority of trades in penny stocks take place outside these secure exchanges, there is high chance of fraudulent, manipulative and illegal activities. However, risk is quite lower for those penny stocks which trade in secured exchanges.
You have to take into account the practice of the pump and dump, when considering to buy penny stocks, what happens here is that shady individuals and groups will attempt to drive up the price of a stock through manipulative means, and then sell all their shares, leaving others with the now worthless stock.
This tends to happen, for the most part, by posting inaccurate data regarding allegedly hot penny stocks, thus pushing people who dont know much about our financial market to make investments in particular stocks, and disseminating inaccurate info regarding various companies via spam, penny stock newsletters, or a number of message boards. After the stock has gotten artificially pumped up, these folks sell shares at major profit and stop promoting the stock, thus causing the stock price to drop.
Even if you associate yourself with a reliable company, the risks will still persist because of the fast moving nature of the penny stocks. They move so rapidly that even the company name and reputation cannot stop it from falling. However this fast movement can become a boon if you have time enough to monitor your stock on a consistent basis so that you can sell and buy penny stocks at the right time.
You need to be on top of your investments, checking them constantly. In as short a time as a few minutes a profit can turn to a loss.
Success in penny stock investing requires time and patience, and if you don't have either then you can end up losing the money you invested. Your decision to buy penny stocks can earn you both success and failure, financially.
Most of the people think that if they have money they can earn money in the stock markets. However the most important thing which is required to make money is total dedication and your time. If you cannot give time to the trading then it will have bad results rather than doing any good to you. The services of a penny stock trader can help you in such conditions.
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