| The term penny stocks generally stands for any | | | | if you are holding on to it. Ensure whether or not |
| stocks that trade outside the major stock | | | | ownership has changed and if there is any new |
| exchanges and is taken as ‘deprecatory'. The | | | | financial news. |
| major stock exchanges would include: NASDAQ, | | | | Low investments means low risk |
| AMEX, or NYSE. The term is also often used | | | | Don't begin with a big investment. It is advised to |
| interchangeably with small caps and nano caps. | | | | play with what you can afford. This is great for |
| The title of penny stock yet should be | | | | fresher. Sometimes a penny stock can develop |
| determined by the share price instead the listing | | | | into a huge major company and finish up trading |
| service or market capitalization. Many companies | | | | on a major exchange. If you hold on to one like |
| show false track records to public. Even some of | | | | this, the profits will startle you. |
| them suffer from bankruptcy. There are a | | | | Do your own research |
| number of micro cap companies that pay | | | | There are lots of small caps or microcap stocks in |
| individuals to publicize the company stock in | | | | which you can invest that give all the relevant and |
| different media, like newsletters, financial | | | | audited financial statements that you necessitate, |
| television and radio shows. They can also send | | | | in addition genuine press releases.You should |
| spam email trying to persuade you to purchase | | | | observe at all the potential companies out there |
| particular stock. When various of these companies | | | | trading for just a couple of dollars or even under |
| will file for an IPO, many others will start off | | | | a dollar. Many have been able to double or even |
| trading on the OTC BB as a penny stock. | | | | triple their investments on penny stocks. Don't |
| The easiest way to get your foot into the | | | | trust the hype, and protect your capital. |
| market is to get into a company that is trading | | | | Size matters |
| under $5 a share. | | | | There are numerous penny stocks. The size of |
| Stocks that no longer trade over $1 on the | | | | your position should exceed $2000 - $3000. |
| Nasdaq | | | | Although this may not appear pretty much it's not |
| These take account of those companies that fell | | | | strange for a $0.10 company to drop to $0.05. |
| from grace (Enron). Though it is possible that they | | | | That's a 50% loss. If your position is $10 000, a |
| may see better days in the future, the likelihood | | | | 50% haircut leaves you with only $5000. Cut your |
| is stacked against them. It's generally best to | | | | losses to a minimum. If the company has done |
| keep away from trading these penny stocks. If | | | | well, and you are up, either take your profits off |
| you still want to trade, then you can wait until the | | | | the table, or add to your position, and be sure to |
| stock begins to rebound. | | | | reset your stop loss to protect your previous |
| The following tips to help the penny stock trader | | | | profits. Capital preservation is vital for unbeaten |
| avoid making costly mistakes. | | | | trading. |
| Due Diligence | | | | Make your own strategy |
| It's not so easy to find information on these | | | | Make a plan before you buy. Make sure why you |
| companies and hard to find out what is legit and | | | | are buying. What is your exit strategy? Where is |
| what isn't. Many websites out there offer free | | | | your stop loss? At what point will you take your |
| ideas and do all the research for you. But it is | | | | profit? Record these answers before you place |
| significant that you do your own research too. | | | | that buy order. |
| Observe the company and research it everyday | | | | |