Posted on 09 August 2012.
Any investor will tell you that singling out hot penny stocks can be difficult. Although penny stocks can be very lucrative in the hands of the right investors, most people lose money on the over the counter market, rather than gain it. Many investors are first attracted to penny stocks because they cost so little. At less than five dollars a share, they can be difficult investments to turn down. If you want to make money trading penny stocks, you would have to be very careful, from the moment you start researching a stock to the moment you decide to sell.
How you research your hot penny stocks can have a huge effect on how they perform. Most new investors are tempted by the hot stocks lists that can be found all over the internet. While some of these lists are written be experienced investors who know what they are talking about, many are written by amateurs or, worse, scammers. Unless you have found a list that you know to be accurate, or you are experienced enough to judge a list’s accuracy for yourself, you should resign yourself to scanning the listings and doing your own research.
Once you have mastered the art of choosing the best penny stocks, you now need to know when it is the right moment to sell. Most successful penny stocks rise only briefly, then plummet, and sometimes fail completely. You need to be able to pinpoint the exact moment that the penny stock has peaked so that you can get the most money when you sell it. The best way to do this is to get a feel for the market. Make a few investments and see how they play out. You may lose money at first, but every failure is a learning experience. Once you understand the flow of the market, you will be able to make large returns from hot penny stocks.
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