Hi! My name is Anthony and welcome to smart penny stock tips. I’m glad your here. Penny stocks are an inherently risky micro cap strategy. It is a niche that has tremendous manipulation and often employs pump and dumb strategies. As such, navigating your way around this industry can be difficult but also very profitable.
I work in the financial industry and have taken the liberty of putting together all the information a beginner needs to know for penny stock trading. I also have included links to more advanced courses that will teach you the fundamentals of short selling penny stocks, but you need to understand the basics first. Lastly, I of course give my own penny stock tips with regard to each area of interest like short selling, brokers, and strategies to minimize risk. I started smart penny stock tips to make your life easier by covering the basics in one place for those looking for penny stock tips, particularly beginners . Let’s get going:
Penny Stock Tips For Beginners – The Fundamentals:
What is a penny stock
Aren’t these risky? Why would an investor ever want to trade these?
How much risk is actually involved?
How do I hedge myself against losses?
Penny Stock Tip #1: Understanding what a penny stock really is.
A penny stock is a stock that is typically traded on the Over-The-Counter (OTCBB) Market and costs $5.00 a share or less. These lower priced stocks tend to be more speculative and subject to manipulation, are associated with smaller companies, and do not meet the listing requirements for the NASDAQ or NYSE/AMEX. Smaller companies use the OTC Market the same reason any other company uses the NASDQ or NYSE, to raise money to fund growth and expansion. The goal of most of these companies is to grow and move their way up into bigger capitol markets through up-listing where more capitol is available (more capitol can lead to more growth). These Exchanges are essential building blocks for public companies to utilize pools of capital in today’s capital markets. It is the core of the free market system at work. When you trade even 1 share of stock you have just participate in this process.
Penny Stocks are typically highly volatile and thinly traded which opens the door to the possibility of huge upside potential, and the possibility of taking a big loss. These stocks are high risk and are not recommended for the novice trader. Tim Sykes provides excellent training products for those who want to learn the ropes when it comes to penny stock trading. Please visit the Securities and Exchange Commission website for further information on Penny Stocks: http://www.sec.gov/answers/penny.htm
Penny Stock Tip #2: Know why investors trade these pink sheet stocks in the first place.
Unlike stocks traded on the larger and more popular exchanges, Penny Stocks offer a quick profit due to there inherent speculation and volatility. Penny Stocks are traded thinly traded (low volumes and/or traded infrequently) and a sudden increase of buying demand can make a company’s stock value quickly increase (or decrease). Penny Stocks can make quick gains, sometimes as high as 1000%. So timing the market correctly can reward an investor with huge returns.
Penny Stock Tip #3: Know the risk.
Investing in the stock market involves risk. This is no different with Penny Stocks. In fact, Penny stocks are considered much more speculative than larger stocks. This speculative nature can lead to rapid gains or losses. It is important that you seek professional advice from your registered financial advisor or a stockbroker when making an investment.
I am not registered as an Investment Adviser or broker dealer in any jurisdiction whatsoever. Smart Penny Stock Tips is simply a free online resource covering the basics I created after answering countless question about penny stocks. While Penny Stocks provide a the opportunity to gain financially, you should never invest more than you can afford to lose.
Penny Stock Tip #4: How to protect yourself against potential losses.
Plain and simple, there is NO WAY to guarantee profit in the stock market. There will always be risk involved when investing. I will do my best to provide you with foundational information and awesome products that will get you results, but you need to do the leg work yourself too.
Also, make it a practice to perform your own Due Diligence on any company that anyone mentions, or you see as a potential investment. Check out our Due Diligence section for some ideas on this process.
Lastly, the best penny stock tip is to always consult with your registered financial adviser or stockbroker when making an investment decision.