How To Trade Penny Stocks

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In this post, I want to share with you few things which you need to do before you start trading penny stocks for a living.

When I start trading penny stocks, I was in the finance industry for 18 years. Before I switched to penny stock trading, I had been trading FOREX. It is a big difference between trading FOREX and penny stocks. First off all, FOREX is dynamic and is trading 24/7. Penny Stocks are much less dynamic as trading is simply opening bell to closing bell.

Penny Stock trading is suitable for people who are looking for less dynamic type of trading, which takes only 6 hours a day. You don’t need to watch the charts 24 hours because markets are closed after 6.5 hours. I started trading penny stocks with capital little over $11,000. Right now I am up almost 700% after 3 years of penny stock trading. This performance may be not enough for someone, but 233.33% per year is a very good result for me.

Now I am getting to the point of this post. What you need to do before you start trading penny stocks?

First of all, you need starting capital. If you compare penny stock trading with FOREX trading, you need much less money to trade penny stocks than trading foreign currencies. The reason is because in the penny stock market, penny stocks are priced under $1 mostly. Sometimes even fractions of a cent ($0.001).

When you have the capital, the second important thing you need to do is choose the correct brokerage firm. Most Deep Discount Brokers will trade penny stocks. If you have trouble finding one, AimHighProfits has a good review of Online Brokers who offer Penny Stock Trading. There are few really good brokers, but I can recommend you only one: eTrade. I have had very good experience with them and can only recommend them.

Why? First of all, because they are fair, second of all, their commissions are the lowest in the industry because of the volume. And third, they offer almost every type of trading instrument out there. You can trade FOREX, penny stocks, options, futures, even commodities. And not only on US market, but almost all markets over the globe.

Once you have the first two requirements, you are ready to start trading penny stocks. What penny stocks to trade and how to trade the stocks safely in this debt crisis is theme for the next page.

Target Your Profits Higher!


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