Business People Club

How to invest in penny stocks?

0 like 0 dislike
203 views
by ForceSoldier
Is it good idea to invest in penny stocks? How to do it?

Your comment

Your name to display :
Privacy: Your email address will only be used for sending these notifications.
Anti-spam verification:
To avoid this verification in future, please log in or register.

1 Comment

0 like 0 dislike
commented by SilentTrooper
Investing in penny stocks provides traders with the opportunity to dramatically increase their profits, however, it also provides an equal opportunity to lose your trading capital quickly. These 5 tips will help you lower the risk of one of the riskiest investment vehicles.

1. Penny Stocks are a penny for a reason.
While we all dream about investing in the next Microsoft or the next Home Depot, the truth is, the odds of you finding that once in a decade success story are slim. These companies are either starting out and purchased a shell company because it was cheaper than an IPO, or they simply do not have a business plan compelling enough to justify investment banker's money for an IPO. This doesn't make them a bad investment, but it should make you be realistic about the kind of company that you are investing in.

2. Trading Volumes
Look for a consistent high volume of shares being traded. Looking at the average volume can be misleading. If ABC trades 1 million shares today, and doesn't trade for the rest of the week, the daily average will appear to be 200 000 shares. In order to get in and out at an acceptable rate of return, you need consistent volume. Also look at the number of trades per day. Is it 1 insider selling or buying? Liquidity should be the first thing to look at. If there is no volume, you will end up holding "dead money", where the only way of selling shares is to dump at the bid, which will put more selling pressure, resulting in an even lower sell price.

3. Does the company know how to make a profit?
While its not unusual to see a start up company run at a loss, its important to look at why they are losing money. Is it manageable? Will they have to seek further financing (resulting in dilution of your shares) or will they have to seek a joint partnership that favors the other company?

If your company knows how to make a profit, the company can use that money to grow their business, which increases shareholder value. You have to do some research to find these companies, but when you do, you lower the risk of a loss of your capital, and increase the odds of a much higher return.

4. Have an entry and exit plan - and stick to it.
Penny stocks are volitile. They will quickly move up, and move down just as quickly. Remember, if you buy a stock at $0.10 and sell it at $0.12, that represents a 20% return on your investment. A 2 cent decline leaves you with a 20% loss. Many stocks trade in this range on a daily basis. If your investment capital is $10 000, a 20% loss is a $2000 loss. Do this 5 times and you're out of money. Keep your stops close. If you get stopped out, move on to the next opportunity. The market is telling you something, and whether you want to admit it or not, its usually best to listen.

If your plan was to sell at $0.12 and it jumps to $0.13, either take the 30% gain, or better still, place your stop at $0.12. Lock in your profits while not capping the upside potential.

5. How did you find out about the stock?
Most people find out about penny stocks through a mailing list. There are many excellent penny stock newsletters, however, there are just as many who are pumping and dumping. They, along with insiders, will load up on shares, then begin to pump the company to unsuspecting newsletter subscribers. These subscribers buy while insiders are selling. Guess who wins here.

Not all newsletters are bad. Having worked in the industry for the last 8 years, I have seen my share of unscrupulous companies and promoters. Some are paid in shares, sometimes in restricted shares (an agreement whereby the shares cannot be sold for a predetermined period of time), others in cash.

How to spot the good companies from the bad? Simply subscribe, and track the investments. Was there a legitimate opportunity to make money? Do they have a track record of providing subscribers with great opportunities?  You'll start to notice quickly if you have subscribed to a good newsletter or not.

One other tip I would offer to you is not to invest more than 20% of your overall portfolio in penny stocks. You are investing to make money and preserve capital to fight another battle. If you put too much of your capital at risk, you increase the odds of losing your capital. If that 20% grows, you'll have more than enough money to make a healthy rate of return. Penny stocks are risky to begin with, why put your money more at risk?

Related posts

0 like 0 dislike
0 comments 204 views
How to buy penny stocks?

is it good idea to buy penny stocks? and how to buy them?

by Octopuppy
0 like 0 dislike
0 comments 110 views
How to Know When to Sell Your Stocks

While quite a bit of time and research goes into selecting stocks, it is often hard to know when to pull out - especially for first time investors. The good news is that if you have chosen your stocks carefully, you won't need to pull out for a very long time, such as when you are ... with a broker or a financial advisor before buying or selling stocks. They will work with you to help you make the right decisions to reach your financial goals.

by PlushSeal
0 like 0 dislike
1 Comment 214 views
How to be successful trading stocks?

What are the ways to be successful trading stocks?

by PlaySeal
0 like 0 dislike
1 Comment 203 views
How to pick stocks?

What are the best ways to pick stocks?

by UncleRhino
0 like 0 dislike
1 Comment 259 views
How to invest in real estate?

How to invest in real estate?

by Finderpros
0 like 0 dislike
0 comments 117 views
Different Types of Stock

The different types of stock are what confuse most first time investors. That confusion causes people to turn away from the stock market altogether, or to make unwise investments. If you are going to play the stock market, you must know what types of stock are available and what it all means! ... prefer this preferred stock, be aware that the company typically has the right to buy the stock back from the stock owner and stop paying dividends.

by TrainedGuy
0 like 0 dislike
0 comments 136 views
How Much Money Should You Invest?

Many first time investors think that they should invest all of their savings. This isn't necessarily true. To determine how much money you should invest, you must first determine how much you actually can afford to invest, and what your financial goals are. First, let's take a look at how much ... investment, you may have to look at other investments. Never borrow money to invest, and never use money that you have not set aside for investing!

by PerfumedNecromancer
0 like 0 dislike
0 comments 102 views
How to Build An Opt-In Mailing Lists?

One of the powerful tools in online email marketing is to build an opt-in mailing list. An opt-in mailing list is a database of peoples' names and email addresses that have subscribed to an email list via a web form giving that list owner permission to send them periodic emails on the ... the best deals in the market, those with great quality and value. Doing all these, would earn you credibility and a profitable business on the Internet.

by Explorer
0 like 0 dislike
0 comments 82 views
How to register my business in state of kentucky?

Register your business with kentucky state business website. Click on this link to register your business - http://onestop.ky.gov/Pages/default.aspx

by Richard S.
0 like 0 dislike
0 comments 75 views
How to register my business in state of alabama?

Go to alabama business services website to learn more. Click this link - http://sos.alabama.gov/business-services

by GardenParrot
0 like 0 dislike
0 comments 111 views
How to achieve success in business using your website

Designing a web site that get results can take time to complete and the best results are gained when you are fully involved and prepared in the process. Making your company an attractive and popular is more than just placing a picture of a product or a description of a service on a web page and ... so that they can build a web site, which your customers will find useful and will purchase from. After all the web site is for your customers!

image
by TwinNut
0 like 0 dislike
0 comments 154 views
Learning How To Get Free New And Existing Mls Home Listings In Your Area

When you are in the market for a new home, the key is to be able to see as many available homes as possible. However, driving up and down the streets is not an efficient way to gauge the housing market in your area. A better way to do it would be access the MLS listing sites that many realtors ... to start with when you narrow down to the homes you want to actually see in person. The more options you have the more quality you will end up with.

by HairyFoal
0 like 0 dislike
0 comments 188 views
what are seo contests and how to rank better in SEO Contests

The keyword is totally unique in the eyes of the search engines, and there are strong rules in these contests. Some of the general important rules of seocontests. 1. No black hat search engine optimization allowed 2. No one from the official announcement website can enter this contest. ... and continue with the link building. If these steps are done perfectly , you can make sure that your webpage tops the search engine result pages.

by DopeyPotato
0 like 0 dislike
0 comments 208 views
How to Make Money in an Online Magazine

Many people are now trying to involve themselves in an online business. There are a variety of online business opportunities, you go from providing a service or a product. And one of the more popular ways of making money in the internet today is through an online magazine. Although an online magazine ... be sure to think of the above steps. A systematic steps and proper planning in this business will assure you of a great success in the future.

by Emufasa
0 like 0 dislike
0 comments 188 views
Affiliate Marketing - How to Get Started In 6 Easy Steps

Affiliate marketing is an easy to start online business. It is really easy to start but requires the hard work to become successful. In this article you will learn the six basic steps that are required to enter in this business. The steps are brief and quite simple. You must follow these ... Use the techniques to drive maximum traffic to your website. Once you have started earning with a single product, add more products and repeat the process.

by Hawkward
0 like 0 dislike
1 Comment 338 views
How to use PPC In my Affiliate Marketing Business ?

How to use PPC In my Affiliate Marketing Business ?

by Falconjurer
0 like 0 dislike
1 Comment 324 views
0 like 0 dislike
1 Comment 350 views
How to stay competitive In the 21st century ?

How to stay competitive In the 21st century ?

by GardenParrot
0 like 0 dislike
1 Comment 290 views
How to change font size in wordpress website?

I want to change font size in my wordpress website?

by Octopuppy
0 like 0 dislike
1 Comment 263 views
how to Succeed in Affiliate Marketing Online?

how to Succeed in Affiliate Marketing Online?

by HairyFoal
0 like 0 dislike
0 comments 325 views
How to display merchandise to sell more in garage sales?

Garage Sale Hints for Displaying Your Merchandise Garage sales are a common thing from early spring until just before the winter snows begin to fly. We've all been to dozens in our life and for the most part I'd say most people feel pretty comfortable that they could put on their own ... sale hints should help first-timers to have everything run smoothly. Just be sure to put like things together and give people enough space to move around.

by BunBunny
0 like 0 dislike
1 Comment 249 views
How To Create Customer Value In Your Proposals?

How To Create Customer Value In Your Proposals?

by Wallaby
0 like 0 dislike
1 Comment 242 views
How to use adsense in blogs?

What to use adsense in blogs?

by Amigod
0 like 0 dislike
1 Comment 224 views
How to include links in blog posting?

How to include links in blog posting?

by Madept
0 like 0 dislike
1 Comment 232 views
How To Teach Art And Drama In Schools?

How To Teach Art And Drama In Schools?

by UncleRhino
0 like 0 dislike
1 Comment 238 views
How to change font size in wordpress site?

How to change font size in wordpress site?

by Richard S.
0 like 0 dislike
1 Comment 241 views
How To Overcome Negative Thinking In Selling?

How To Overcome Negative Thinking In Selling?

by UncleRhino
0 like 0 dislike
1 Comment 228 views
How to get referrals in the sales process?

How to get referrals in the sales process?

by Conjursa
0 like 0 dislike
1 Comment 255 views
0 like 0 dislike
1 Comment 216 views
How to be the Leader in Wholesale Handbags?

How to be the Leader in Wholesale Handbags?

by GardenParrot
0 like 0 dislike
1 Comment 656 views
How To Accept Credit Card In Your Small Business?

How To Accept Credit Card In Your Small Business?

by Duskunk
0 like 0 dislike
1 Comment 207 views
How to change post background in wordpress?

I want to change post background in my wordpress site?

by GiftedWrecker
0 like 0 dislike
1 Comment 301 views
How to rank high in google?

I want my website to show on first page of google and rank high. Any suggestions?

by MysteryWasp
0 like 0 dislike
1 Comment 199 views
How to get listed in search engine?

I want my site to get listed in search engines. Any help appreciated?

by Cheatah
0 like 0 dislike
0 comments 168 views
Stabilize Your Current Situation Before You Invest

Before you consider investing in any type of market, you should really take a long hard look at your current situation. Investing in the future is a good thing, but clearing up bad - or potentially bad - situations in the present is more important. Pull your credit report. You should do this ... way, when you are in a financially sound situation, you will be armed with the knowledge that you need to make equally sound investments in your future.

by Madept
0 like 0 dislike
0 comments 117 views
Determining Where You Will Invest

There are several different types of investments, and there are many factors in determining where you should invest your funds. Of course, determining where you will invest begins with researching the various available types of investments, determining your risk tolerance, and determining your investment style - ... financial goals. Many will even teach you about investing along the way - make sure you pay attention to what they are telling you!

by Oystrich
0 like 0 dislike
0 comments 79 views
How You Can Advertise In Facebook

As an owner of an online business, you know that you need to market your website in the internet in order for you to generate targeted traffic. You have to remember that in order for an online business to become a success, targeted traffic is the key. With targeted traffic, you will be able to increase ... , you can be sure that you will be able to attract more people to visit your Facebook profile page and let them know what you have to offer.

by Slayerk
0 like 0 dislike
0 comments 62 views
How is accounting used in business?

It might seem obvious, but in managing a business, it's important to understand how the business makes a profit. A company needs a good business model and a good profit model. A business sells products or services and earns a certain amount of margin on each unit sold. The number of units ... numbers in your profit report for sales volume, sales prices, product costs and other expense and see how your projected profit looks for the coming year.

by Finderpros
0 like 0 dislike
0 comments 72 views
A Career in Accounting: Tips on How You Can be Successful

In any type of businesses, an accountant is needed. You have to consider that accounting is basically the language in business and having enough knowledge about accountancy is essential for businessmen and women to know how their business is doing. This is why accounting professionals are very much in demand today. ... a lot of great opportunities. You can be sure that you will find the right career that you want if you take this type of career.

by LovableStorm
0 like 0 dislike
0 comments 53 views
How You Can Advertise In Facebook

As an owner of an online business, you know that you need to market your website in the internet in order for you to generate targeted traffic. You have to remember that in order for an online business to become a success, targeted traffic is the key. With targeted traffic, you will be able to increase ... , you can be sure that you will be able to attract more people to visit your Facebook profile page and let them know what you have to offer.

by SwiftHeroine
0 like 0 dislike
0 comments 90 views
How Technology Will Change Digital Marketing In 2018

The move towards 2018 also comes with a great shift in digital marketing. Since new trends are increasingly getting into the marketplace, your company needs to pay special attention or you may end up being left behind by technology. With the need to reach more customers and become visible, the ... wall and display solutions. When Mia is not spreading the word about video walls she is often found discovering the great outdoors, walking or cycling.

by mia_clarke
0 like 0 dislike
1 Comment 319 views
How in the World Do People Save Money?

How in the World Do People Save Money?

by PlushSeal
0 like 0 dislike
1 Comment 429 views
How do you make mistakes in dropshipping?

How do you make mistakes in dropshipping?

by TrainedGuy
0 like 0 dislike
1 Comment 251 views
How Does Human Resource Management in the Workspace Effect Me?

How Does Human Resource Management in the Workspace Effect Me?

by PositiveVoid
0 like 0 dislike
0 comments 142 views
Affiliate Programs -- Great way to put extra dollars in your pocket

A banner or a text link on your website can generate hundreds to tens of thousands of dollars for you! You don't believe it? You have to. Get an affiliate program signup for free and experience how your income double! Internet marketing is now affiliate marketing. It is the ... program undoubtedly is a great money making technique. Choose an appropriate affiliate program, promote it properly and tactically, and get a handsome check monthly.

by TwinNut
Connect with us:
...