Oct 15, 2011

Posted by in Penny Stock | 0 Comments

How To Trade Penny Stocks Online The Right Way

The mechanics of how to trade penny stocks online and become profitable

Buy Penny Stocks OnlineA lot of traders want to know how to trade penny stocks online, and for good reason. If you are good at it, you can make a lot of money very quickly in this field. However, you can also lose a lot of money very quickly as well. These stocks are much different then most regular stocks, and should be treated as such. You cannot just buy them and forget about them, because this field is all about constantly trading.

The mechanics of actually investing (not being profitable) is actually pretty simple. The 1st step is to establish an account with an internet broker. The top ones are Ameritrade and E Trade, and you should probably start with these. There are plenty of smaller, lesser known brokers, but you cannot go wrong with these known commodities.

They will also ask you to join their mailing lists. It might
be wise to do so, as this way you get some important tips on how to use their systems more effectively. Then, connect your bank account to the broker you choose so you can withdraw your money whenever you want to make an investment. It would be smart to open a new account for this. Otherwise, you might accidentally withdraw more money than you have, if you are not keeping close tabs on what your balance is.

Don’t let the simplicity of how to trade penny stocks online fool you

So that is how to trade penny stocks online. Sounds simple, and it is. However, when it comes to actually being profitable, that it is another matter. The key in this field is research. If you know what you are looking for and are educated, you will make money.

First things first: do not just watch the news or buy based on the latest “stock tip”. If you are investing based on what the news or other investors are saying, you are already one step behind the game. Instead, you need to become good at finding sound investments yourself.

To do this, educate yourself by reading newsletters and books on or by successful penny stock investors, and learn how to find profitable investments. Make sure it is by someone who has made money in this specific field. For instance, reading Buffetology might be smart if you are going to become a value investor, but it has no relevance to penny stocks.

However, the one thing you will find common to all successful trades is that they do intense research themselves. If you plan on holding for the long haul, this is even more important. In this case, you want to look past the recent price trends, and analyze the business itself.

For instance, the company might have just got a new CEO who has a history of turning around downtrodden companies. Merely glancing at their price and trends would not tell you this. They might be on the verge of a long and consistent price increase, but the only way to find that out would be by doing hard but necessary research.

No matter what, after you buy the stock, do not forget about it. Make sure you have a point where you will cut your losses and get out. Also, if the stock doubles in price, do not get too confident. It might be wise to sell at that point to take your gains and sell.

As you can probably tell, investing in this field is highly volatile. However, it can be profitable for the right investor. Being patient and doing your research is how to trade penny stocks online and become profitable at it.

Find more on how to trade penny stocks online on the FREE email list:

Comments are closed.