The Key Factors to Making Money on Penny Stocks


Finding good penny stocks is not terribly difficult, but there are some key factors that any investor needs to be considering when a non-professional investor takes it upon themselves to attempt to pick the right penny stocks. Making the right stock picks requires a combination of knowledge for trading, stock market timing, volume, and transparency. If you try to pick penny stocks without taking all of these factors into account, you risk losing your entire investment. When investing in penny stock s, the risks are not always easy to locate so the guys at http://www.aimhighprofits.com help by outlining them for you here.

Transparency

OTC listed penny stocks do not have the same level of transparency as big corporations do. This is both good and bad. Good because you can be the first investor to find a good penny stock, bad because it takes volume to get the stock price of a penny stock to move.
Low tradability normally companies that do not hire promoters may have low volume making the tradability of the stock difficult since investors are not interested in them. Very few investors can take a risk on a penny stock that has developed a new source of energy when there is no volume on the stock.

Stock Hype

Investors also need to beware of the hype that can be created by newsletters and penny stock alert emails. Reading the disclaimer on these promotional materials is very important because often times they will “pump” the importance of otherwise mundane news. By doing so, the promoters make it look better. Hence, before entering into any trade on a penny stock which is being promoted, consult with a professional if you have questions. Always read the news about any company you’re planning to invest in and form your own opinion on it. Be careful not to follow what other investors are doing in the penny stock market since the old adage is still true: Bulls make money, Bears make money and Pigs get slaughtered.

Stock Volume

Making money on good penny stocks is all about volume. Since most penny stocks are smaller companies, investments need to have hype and volume in order for the price to change. This simply means that a new company needs a promotion to increase its visibility. Once this “buzz” has been created, trading volume on the penny stock should increase. When more traders become attracted to a particular stock, volume increases and, often times, the price of these penny stocks rise. The key is simply getting a position in the market prior to all of this happening. This is where Aim High Profits can help you succeed and educate you about penny stocks.

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***Reminder: never chase stocks that gap at the open and always protect your profits!

Good luck in making the Best Penny Stock picks.

2012 – Become a Millionaire!!

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