A penny stock is defined as a security that sells on a stock exchange, often at less than one dollar a share. This makes investing easier for beginners since a large quantity of money is not necessary. You can also look at it from the point of not losing too much if you have a bad selection of stock. It doesn’t hurt as much when you are a beginner.
But what you will find, that in time, when your confidence builds up and you feel better about your experiences and in the day trading field, your stock market picks using penny stocks will greatly increase in volume. There is nothing wrong with purchasing five thousand of a stock, seeing a small increase and then selling. It’s not how much you made, it’s that fact you made money.
What I am trying to say is that penny stocks, although cheap in price, can be purchased in mass quantities. Thus the end result can be spectacular. Tremendous amounts of money have been made and are still being made using the technique of buying and selling penny stocks. The thing you need to keep in mind is not to get greedy. This is where the big mistakes are and money is lost.
Many people will ask you why you feel that smaller dollar amounts but larger quantities of stock are better than greater dollar, bigger name stock. In my opinion I feel that the smaller names yield a better return just using the angle of lower dollar penny stocks vs higher dollar big names stocks.
Always keep in mind that if you play your cards carefully and correctly, you will realize that trading penny stocks can be one of the most powerful methods of expanding your portfolio and increasing the size of your wealth fast. With the correct direction and routine of finding the money making penny stocks, a millionaires status is not out of reach for you.
Do not forget that most penny stocks are more risky than your average nasdaq or amex stock. This is why it is extremely important to develop a strategy, utilize it to the best of your abilities, and only stick to what works. You’re not trying to reinvent the wheel, just increase your wealth potential and develop a retirement plan of financial freedom.
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