Beginners in stock trading will do well to start out by trading penny stocks. This type of trading doesn’t require a large upfront investment, yet when approached strategically, it is possible to make a sizable profit.
Seeking guidance from an experienced penny stock trainer and using the internet to search for trading resources are two excellent ways to succeed in penny stock trading.
#1 Steer Clear of the Dark Market
The majority of people investing in penny stocks end up losing their money. This is why you should always carefully calculate an investment amount that won’t hurt you financially if you were to lose it.
One of the most common reasons people lose money on penny stocks is because they are trading on the Dark Market, also known as the Dark Web. You should avoid doing this.
Instead, invest in high-quality companies that are featured on regulated exchanges. These are the companies that are designed according to proven business models.
Pick the newest companies you can find. These are the companies that start out trading their stocks for pennies. Once they hit success, those penny stocks will be traded for high dollar amounts, which means you call sell them for a large profit.
#2 Seek Guidance From an Experienced Trader
If you’re going to learn how to build a house, you’ll need guidance from a home construction specialist. If you’re going to trade penny stocks, the same concept applies — you’ll require guidance from an experienced penny stock trainer.
Let this person guide you through the entire process, and take note of any valuable information he or she shares that was learned through the first-hand experience.
Those who are worth seeking guidance from won’t sugarcoat the trading process. They won’t talk about private jets and yachts and make promises that if you invest in a certain company, you’ll soon have a yacht of your own.
Instead, they will clearly outline the involved risks in penny stock trading and provide valuable tips you can implement with no promise of any sort of return.
#3 Take It Slow
The ability to take things slow and start small are two of the most notable advantages of penny stocks.
Ideally, in the beginning, a maximum of 10 percent of your investment portfolio will be comprised of penny stocks.
You can make these stocks a larger part of your portfolio once you become familiar with the involved risks and learn how to navigate penny stock trading.
#4 Be Aware of the Volume
Even if you have 10,000 shares in penny stocks that are currently soaring in value, it means nothing if you can’t sell them. This is why you must be aware of a stock’s average daily trading volume.
It’s usually best to stick with stocks that have a high volume because they will be the easiest to sell.
Successful penny stock trading is an art that can be learned through experience and guidance. Always start slow and small, and do your best to learn from someone else who has achieved success in stock trading.
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