Like any other investments, online penny stock trading doesn’t guarantee 100% success and profit. Yes, online penny stock trading has made a lot of people bank fortune and you can do it as well, as long as you equip yourself with the basics needed to succeed. If you are a beginner or starter, you’ve landed on the right page because this article will guide you through the 4 important rules of online penny stock trading. Read on.
First Rule: Keep your investments safe from frauds and scams
The field of online investing also has its share of frauds and scams. As a matter of fact, the infamous “pump n dump” scheme exists here, particularly in the special field of penny stocks. Fret not; you can still safeguard yourself from being victimized by following the tips below:
One of fundamentals of online penny stock trading is to never trust any information from strangers particularly if the information is sent via unsolicited email, as this is the best tactic scammers use in their fraudulent activities. It is also a good idea to not succumb to any penny stock advice whatsoever from people you are not familiar with. If you want updates, trust reputable penny stocks forums. Do not easily trust readily available resources as even the most successful in this field still do their job of finding the information they need. Penny stock advertisements aren’t always real, so don’t trust them easily. You can never tell which one is legal and which one is not. While SEC is doing its best to combat all these scammers, they are too smart to get caught.
Second Rule: Online stock broker
You need an online stock broker to start with online penny stock trading. However, you shouldn’t give in to the very first broker you see. You should first do your research before opening an account with your chosen online stock broker. You might be blinded by capital security fees but keep in mind that your investments matter most. The low fees are really enticing but the most important thing here is to keep your investment safe and accessible all the time.
Third Rule: Choosing the Penny Stock Software to Use
There are different online penny stock trading software programs to use, but actually, online penny stock trading software program provided by your broker or those free tools online are enough to help you.
Fourth Rule: Online Penny Stock Trading
Penny stocks are commonly traded on pink sheets, the term which originated from the pink sheets of paper used on the floor by stockbrokers to write their orders on. They are not as highly-regulated as those stocks trading in big exchanges like Dow Jones or NASDAQ that is why most of them are traded only in smaller exchanges. However, these are not secured investments and it is still a lot better to buy and sell cheap stocks listed on major stock exchanges.
Now that you know the top 4 rules of online penny stock trading, success in penny stocks is within your reach.