Hi:smart:
If you want to decrease the risk of penny stock trading you should have special tools at hand. All famous investors such as Warren Buffet or George Soros faced this problem when they started working. Their search became their first step to success. If you have the right tools and can use them properly you have a good opportunity to succeed.
Look for Penny Stocks on the OTC Bulletin Board Exchange. Get advantage of penny stock advice in it. This is more effective in comparison with pink sheet stocks as it provided info in right time with the SEC. But there are also pink sheet stocks that pass all regulations of SEC and file with it so you can trade them. You can also begin trading at NASDAQ, NYSE if you want to feel safe but they will be less volatile then.
Tip 1: Make notes in a journal.
Make notes in a journal on a daily basis. It will help you to notice the things you would not have paid attention to otherwise. It is a kind of long-term research that you make daily.
Tip 2: You should understand the penny stock stages.
There are 4 stages for penny stocks, as a rule. They include the stage of accumulation, run-up, distribution and run-down.
It all begins from a down-trending period, then the stock reaches its high point and distribution phase follows. Though volume is kept healthy, the value does not change and this can either create profitable conditions on the stock market or, on the contrary, brings to losses.
The run down starts when some negative facts about the company come into view. Much depends upon the stocks. If penny stocks are healthy the fluctuation between different trends is a common thing. Professionalism of a trader let him see the trend and derive the benefit at the right moments. A penny stock trader has his individual style and acts in accordance with it.
Tip 3: Limit losses.
Are you evading risk or learn to manage it? The loss should never be over 10%. If you lose much you will have to earn even more to reach break-even point. If you lose 10% then you will have to earn 11% to break even. If you lose 20% then you need to earn 25% to break even. If you lose 50% then you need to earn 100%! In case your loss reaches 77%, 325% of profit is rather difficult to earn to break even.
For this reason, you should use stop-loss orders not to lose much. Try to limit your loss to 10%.
Tip 4: Study volume patterns.
First, you should pay attention to price and volume. These are 2 basic parameters the trader should pay attention to. However, you should watch out for PVTM – price volume tandem move. You should expose the upward pressure not to get hooked.
Tip 5: Create your exit strategy
Create your exit strategy and stick to it to make bigger profit.
Good luck:clover:
If you want to decrease the risk of penny stock trading you should have special tools at hand. All famous investors such as Warren Buffet or George Soros faced this problem when they started working. Their search became their first step to success. If you have the right tools and can use them properly you have a good opportunity to succeed.
Look for Penny Stocks on the OTC Bulletin Board Exchange. Get advantage of penny stock advice in it. This is more effective in comparison with pink sheet stocks as it provided info in right time with the SEC. But there are also pink sheet stocks that pass all regulations of SEC and file with it so you can trade them. You can also begin trading at NASDAQ, NYSE if you want to feel safe but they will be less volatile then.
Tip 1: Make notes in a journal.
Make notes in a journal on a daily basis. It will help you to notice the things you would not have paid attention to otherwise. It is a kind of long-term research that you make daily.
Tip 2: You should understand the penny stock stages.
There are 4 stages for penny stocks, as a rule. They include the stage of accumulation, run-up, distribution and run-down.
It all begins from a down-trending period, then the stock reaches its high point and distribution phase follows. Though volume is kept healthy, the value does not change and this can either create profitable conditions on the stock market or, on the contrary, brings to losses.
The run down starts when some negative facts about the company come into view. Much depends upon the stocks. If penny stocks are healthy the fluctuation between different trends is a common thing. Professionalism of a trader let him see the trend and derive the benefit at the right moments. A penny stock trader has his individual style and acts in accordance with it.
Tip 3: Limit losses.
Are you evading risk or learn to manage it? The loss should never be over 10%. If you lose much you will have to earn even more to reach break-even point. If you lose 10% then you will have to earn 11% to break even. If you lose 20% then you need to earn 25% to break even. If you lose 50% then you need to earn 100%! In case your loss reaches 77%, 325% of profit is rather difficult to earn to break even.
For this reason, you should use stop-loss orders not to lose much. Try to limit your loss to 10%.
Tip 4: Study volume patterns.
First, you should pay attention to price and volume. These are 2 basic parameters the trader should pay attention to. However, you should watch out for PVTM – price volume tandem move. You should expose the upward pressure not to get hooked.
Tip 5: Create your exit strategy
Create your exit strategy and stick to it to make bigger profit.
Good luck:clover:
