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Thursday, October 27, 2011

Penny Stock Review

  One risky way to make money is by trading a Penny Stocks or two. These are high risk stocks that can make enormous runs and money for the individual trader. They are very high risk and can also cause you to lose your trading account. One of the safest ways to trade these stocks is by day trading.

   Using proper day trading strategies such as can help you keep afloat trading pennies. Your goal is to make money on each and every trade but this is almost impossible. So, you should focus on minimizing losses and when you catch that strong stock, don’t sell to early. This form of trading is letting the winners run.

  When a penny stock begins to run, all the bells and whistles will go off on the day traders screen and more traders will begin to jump into the stock. This will drive the price up, sometimes over thousands of percent in price.

   One thing you need to avoid is the “pump”, that’s when some insiders try to push up the price of a stock and sell their shares into all the buyers created by the pump. A way to try and avoid this is to find a solid penny stock forum and ensure you are not buying into a junk stock.

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