Investing in Penny Stocks: A Factual Guide

Investing in Penny Stocks: A Factual Guide

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Although it may sound like an excuse to some, the market is still recovering from the most recent crisis and good jobs are still pretty hard to come across. So with this in mind, instead of sitting and waiting for the ideal job to just fall from the sky, why not make your own job. In this era of globalization and digitalization, what better way to start a successful self-employment process than by involving yourself in a world of stock exchange? The best things about this idea, are facts that stock trading is a job that is promising, lucrative, and easy to do from home, while offering you the opportunity to become your own boss.

When you look at it that way, many people will ask, what are the down-sides? Well first of all, many people are discouraged by an urban legend that in order to earn large quantities of money on the stock exchange you need to have to have a significant investment money from the very start. There is no better indicator of just how wrong this opinion is than the example of the penny stock exchange.

What are penny stocks?

Although the very name itself may sound self-explanatory, penny stocks are in fact not all worth penny a piece. All stocks that are worth less than $5 are considered to be penny stocks by the stock exchange. With this in mind, it is easy for anyone to figure out that in order to get involved in penny stock trade one does not have to possess a significant starting capital, which is on its own a lifesaver to many.

The reason why penny stocks enable people to get so rich so quickly is because of their volatility. The prices of penny stocks jump and drop drastically over very short periods of times, so the gains here are, proportionally of course, significantly larger than in regular stocks. However this also means that dealing in these stocks can sometimes be quite risky, and if not careful, you might just wind up with a bunch of worthless stocks on your hands, which you may not be able to sell.

Do your research

As in before starting any other job, you need to learn enough about the topic in order to become comfortable with it, so comfortable in fact that you are able and willing to entrust your livelihood upon it. What better way to learn than from the experience of others who have successfully trodden the same road that you now dare venture. When it comes to penny stocks, there is no better person to follow than Timothy Sykes, a stock broker renowned for turning his $12,415 bar mitzvah money into over $1.65 million before he turned 21, by trading in penny stocks.

Sykes also proven himself as a successful teacher when his student Tim Grittani, only 3 years after enlisting with Sykes, turned his starting capital of life savings of $1,500 into his first million. Grittani was only 24 years old at the time. With all this in mind, what better knowledge can one hope to apply to the world of penny stocks than that learnt from Tim?

Apply your knowledge

Open your account, and start applying your previously gained knowledge. The best course of action would be to start as safe as possible and trade only in those areas that you feel most comfortable with and those that you know the best. Also, never be afraid to cut your losses. This is sometimes easier said than done but is also one of the most essential parts for trading of any kind. Make a strategy and try to stick by it as much as possible. The market will shift and change and you will often just have to go with the flow, still try to stick to your self-designed course of action as much as possible.

Do not believe everything that you hear

As in any other form of business, tricks and scams are also present in the world of stock exchange. Sometimes people, mostly celebrities, would use their status and popularity to deliberately hype the value stock, of which they own a significant supply and which is not that perspective, in order to earn money themselves. Always check several sources and be careful not to get caught in one of these unethical and in some places even illegal traps.

You are the creator of your own future, or as our favorite popular proverb states, he who dares wins. All you need in order to gain a fortune and a reputation in the world of penny stocks is some determination, some will and most importantly the right knowledge about it.

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