Investing In A Hot Penny Stock Is Like Dancing On The Moon

Penny stocks are stocks that are traded under $5 and usually have a small market cap

. Most penny stocks are under $1.A penny stock is called a hot penny stock when the stock gives soaring profits to the shareholder who purchases it at a low face value. Hot penny shares rise in value VERY quickly, sometimes making gains of hundreds or even thousands of percent within days.However, they are very unpredictable.Seasoned traders cash in their gains while they can, and dont hold on too long and risk having their huge profits disappear.

Penny stock trading is very risky, but NOT if you do it right. There are a few keys to making the most of penny stocks.You want to get in and out quickly! Many people think they can buy a penny stock at 10 cents, and then one day in a few years it will be worth $100.This does happen, but very rarely.It is much more likely that the stock may hit $1.If it does, youve made 10x your original investment and experienced traders will cash in that money instead of letting it ride.

You also must have the right penny stock picks.If you dont trade the right stock, it is unlikely youll see the profit you want.Many newsletters cover the penny stock market and send their readers info on which penny stock picks should heat up.

To find the best hot penny stocks, try one of the free newsletters that offer penny stock alerts about stocks that are about to skyrocket in value.Another key is to sell when the stock IS skyrocketing, not when its falling.Greed is not your friend, the best time to sell is when everyone else is buying.That means you can sell at a high price.Once the stock peaks and starts to cool off, you wont get a good price for it anymore.

In general, penny stock trading is all about getting in early, and getting out early. Dont be a penny stock chaser, get in before everyone else does.When the buying frenzy begins, thats when you want to get out.Sell at the top!

Once you learn to master trading penny stocks, you will see profits beyond your wildest dreams.Successful penny stock traders make more than hedge fund managers.Its all about practice, practice, practice.

by:Broad

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