Buy Penny Stocks - Your Quick Guide
What seems like a really easy way to make money? Buy penny stocks? Contrary to popular belief, that is wrong. As the name suggests, penny stock investing means dealing in stocks with a very low price tag. However, penny stock market does not necessarily provide you with 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.
The major issue when you buy penny stocks is that the penny stock market is not regulated like NASDAQ and that’s what makes trading with them more risky. The lack of any regulatory authority increases the threat of illegal activities making it even more risky to tide in penny stock market. However, some of the penny stocks are listed on the major exchanges also and trading in them would be a safe bet.
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.
False advertisements regarding penny stocks that are claimed to yield bulk returns are spread through a variety of means such as message boards and newsletter publications. People who do not know the nuances of financial market get easily carried away by these fake information and invest in these stocks. This will result in a hike in the prices of these stocks. Those who spread false information will take advantage of this situation and sell all their shares for good profits. They will then stop advertising these stocks which will in turn result in prices of the stocks falling down.
The main risk is that penny stocks tend to move quickly either up or down. Profit can be small or large, even if you are considering to buy penny stocks with a reliable company, there are still other risks but either way it requires a great deal of monitoring of the stock market to be able to sell at the right time.
Investments have to be checked regularly. Else instead of gaining we may end up in losing money. The gap in time may lead to the gap between profit and loss.
Precision is the most important factor which will decide your fate when you buy penny stocks. The right timing can earn huge profits for you while a single error will lead towards a huge loss because penny stocks move very rapidly in the both sides and if you miss the right chance then you can miss your golden opportunity.
If you can't dedicate this time, then you will not be a successful penny stock trader, this means constant and consistent monitoring of your stocks and how they are performing, as well as checking out what is going on in the rest of the market and in relevant industries that may have an impact on your shares. This involves a considerable amount of time at the computer.
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.
The major issue when you buy penny stocks is that the penny stock market is not regulated like NASDAQ and that’s what makes trading with them more risky. The lack of any regulatory authority increases the threat of illegal activities making it even more risky to tide in penny stock market. However, some of the penny stocks are listed on the major exchanges also and trading in them would be a safe bet.
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.
False advertisements regarding penny stocks that are claimed to yield bulk returns are spread through a variety of means such as message boards and newsletter publications. People who do not know the nuances of financial market get easily carried away by these fake information and invest in these stocks. This will result in a hike in the prices of these stocks. Those who spread false information will take advantage of this situation and sell all their shares for good profits. They will then stop advertising these stocks which will in turn result in prices of the stocks falling down.
The main risk is that penny stocks tend to move quickly either up or down. Profit can be small or large, even if you are considering to buy penny stocks with a reliable company, there are still other risks but either way it requires a great deal of monitoring of the stock market to be able to sell at the right time.
Investments have to be checked regularly. Else instead of gaining we may end up in losing money. The gap in time may lead to the gap between profit and loss.
Precision is the most important factor which will decide your fate when you buy penny stocks. The right timing can earn huge profits for you while a single error will lead towards a huge loss because penny stocks move very rapidly in the both sides and if you miss the right chance then you can miss your golden opportunity.
If you can't dedicate this time, then you will not be a successful penny stock trader, this means constant and consistent monitoring of your stocks and how they are performing, as well as checking out what is going on in the rest of the market and in relevant industries that may have an impact on your shares. This involves a considerable amount of time at the computer.
