Once you know how to research penny stocks the game becomes a whole lot easier. The funny thing is most individuals are unaware that there is no need to do fundamental analysis on penny stocks. For the most part the basic idea behind most penny stocks is that they are in an exploratory state and do not generate a net profit. Many times these companies do not even have any revenues because they do not have a product to sell. What the successful penny stocks do have is a believable “story” and an awesome idea for a product or service. If there were a high chance for this story to come true it would be okay, but unfortunately it’s not true and there is almost no chance. These penny stocks are priced this way because penny stocks almost never are able to bring their products to market. Even worse a large number of penny stocks are simply penny stocks scams. These corporations are created for only one purpose and that is to steal as much money as possible from the general public that don’t know how the penny stocks market operates. To begin figuring out how to go about the generating income in penny stocks you must understand “how to research penny stocks” our way.
Where Does The Process Begin?
When you start off trying to find how to research penny stocks you will get a lot of bad advice. Since almost everyone is unsuccessful at profiting in penny stocks, you will not find much good info, especial if it is for free. You also will find a lot of bad, potentially harmful info, at a high price because nearly everyone that is selling a product about investing in penny stocks or how to make millions in penny stocks, is out to scam you. An individual needs to start looking at the penny stock market in a different light with the complete understanding that these microcap stocks are the scum of the stock market, and buying and holding them for at most several days, is the only true method of potentially making money in penny stocks. I want to emphasize the word potentially because the trust of the matter is there are no guarantees even if you lower your holding period substantially. You will have to follow a specific plan which mandates exactly what prices you will buy and sell a penny stock at and how much you will risk per trade. Without doing this a person’s chance of success dramatically decreases.
Selecting Which Penny Stocks To Watch
Now that you understand the first step you must realize the second step. The simplest method of identifying penny stocks to watch is using a stock screener. Building a watch list is important because there are so many penny stocks to buy that there’s no way you could filter them out without a stock selection tool such as a real time stock screener. This will enable you to only focus on stocks which have the potential to move higher or lower by a big amount, and this is what you need to make money. I really feel this is the one tool every trader needs to profit in penny stocks. It is extremely important part of how to identify and how to research penny stocks.
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