| Penny stocks are named based on literal as well | | | | should probably do that homework twice. Know |
| as perceived value. Penny stocks aren't always | | | | the profitability of the company. Be very aware |
| valued at a penny per share. Some may be as | | | | of the trends associated with this stock and its |
| high as a dollar. Many people shy away from | | | | industry. Make a game plan and stick to it. Buy a |
| them because they appear to offer the lure of | | | | stock only at the price you intended to buy it and |
| getting something for nothing. If the amount of | | | | sell it at the price you intended to sell it, always |
| money that you have available for stock trading | | | | protecting yourself with a stop loss order to |
| is limited investing in penny stocks could be a | | | | prevent you from losing everything if the price |
| smart stock investment strategy for you. | | | | happens to crash. |
| For example, the recent closing price for Google | | | | As always, never ever let emotion enter into |
| was $438.77 per share. To purchase 100 shares | | | | your trade. For some people, penny stocks offer |
| you would need over $43,000 available. If Google | | | | the same excitement as of nickel slot machine. |
| went to $440.77 per share your total earnings on | | | | And many of these people walk away from |
| your $43,877 investment would be a mere $200 | | | | penny stocks as broke as when they leave those |
| or a 0.4% return on investment. | | | | nickel slot machines. |
| On the other hand if you purchased 1000 shares | | | | I tend to receive a lot of e-mail stock tips about |
| of a stock at 10¢ per share, and that stock | | | | penny stocks. I have never purchased a stock |
| went to 15¢ per share, your $100 becomes | | | | based on one of these tips alone. There were a |
| $150 or a cool 50% profit. If that 10¢ stock | | | | couple of times when I looked into the company |
| instead went to a dollar or even $10.00 per share, | | | | and it appeared that I could make a solid trade. |
| your earnings would look awesome indeed. You | | | | However, my buy price never came around so I |
| do the math. | | | | didn't buy the stock. |
| Penny stocks often have extremely high trading | | | | As part of your all overall stock investment |
| volumes. When an investor can buy such a huge | | | | strategy you may want to consider putting some |
| number of shares with $1,000 or $10,000, it can | | | | of your investment money into penny stocks. |
| leave the volume patterns for a penny stock | | | | Keep the amount of money limited-not more than |
| looking similar to one of the S&P 500. This | | | | 10% of your total trading cash-and look over |
| high trading volume can also lead to very high | | | | every stock trading opportunity with a fine |
| volatility. A stock may reach an all time high and | | | | toothed comb. As you develop skill and |
| stay there for only minutes. | | | | experience as a stock trader you will come to |
| As with any stock, you should always do your | | | | know the fact that the deal of the century tends |
| own homework and trading experts seem to | | | | to come up several times a day. You just have |
| agree that if you do trade penny stocks you | | | | to know how to find it. |