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How to Find the Best Penny Stocks

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How To Find The Best Penny Stocks

Want to Know How to Find the Best Penny Stocks?

You cannot find penny stocks in the usual places that you look for investment opportunities. Since the companies that issue these shares did not file with the SEC, they are excluded from the NYSE and other major investment arenas. Instead, you have to look for them in the over-the-counter (OTC) market.

The OTC market is not a trading exchange as much as it is a collection of off-beat, alternative investments that do not operate under the aegis of the SEC. When you trade in this setting, you are not protected by any sort of regulatory oversight. That is why it is important to know how to find the best penny stocks and avoid financial mistakes.

Which Sector of the Market?

It is not enough to know that you cannot find penny shares on Wall Street. If you want to find the best shares in the OTC market, then you need to pinpoint your searches. After all, there are probably tens of thousands of shares in this market and it is very difficult to acquire information about any of them.

Use price-performance software to focus your attention on investments that seem likely to make incremental gains in the near future. Since these shares are so low-priced, you can buy immense amounts of them with modest quantities of cash. In return, these stocks can give you tremendous earnings. When you buy 100,000 shares of a stock that is only worth 10 cents per share, you only have to spend $10,000. If that stock advances just one penny, you will earn a $1,000 return.

The best penny stocks are those that are likely gain value soon. This is known among penny stock traders as a breakout. There are several online newsletters that can alert you to these possibilities.

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