No one can logically debate that penny stocks aren’t a source of great profit. Over the course of time many people, including myself, have made money trading penny stocks. And so can you. However, it’s first important to lay a proper foundation for the future. For starters, here are three successful online penny stock trading rules.
Rule 1: Staying Safe
The investing field has its fair share of fraud. Typically, the “pump n dump” scheme is seen in the penny stock arena. However, it’s possible to avoid becoming a victim 100%.
Your first rule is to ignore information that comes from unsolicited emails. This is one of the prime communication sources for these scam artists. The other thing you can do is qualify “hot penny stock picks” that you see in penny stock forums. Don’t just trade a stock because some unknown person says it’s going to hit tomorrow.
Always do research. Even top pros will tell you to research their stock picks. It’s just common sense.
Rule 2: Online Stock Broker
I’ll just assume you’ll be using an online penny stock broker. It is vital that you do your research and open an account with a well-known, reputable broker. Don’t sacrifice pennies on fees for capital security.
We’re talking about your money here. While low fees are great, knowing your money is safe and accessible at all times is better.
Rule 3: Penny Stock Software
While there might be software out there for penny stocks, typically the tools you have at your disposal from your broker and free online tools, like Google & Yahoo, will be enough.
If you’re looking for penny stock picks for inspiration or hints on where to look for your next great trade, think about subscribing to a newsletter. Remember, always research everything.
If you’re interested, I have four other success rules to share with you. Remember, trading penny stocks online is potentially very profitable, it’s also risky (like anything else). Take the right steps, make the right moves and trade with knowledge and you’ll be set.