Right System For Big Penny Stock Profit

Category : Finance

Category : Finance

sub : Investing

Article:

In stock market there are two types of people one is investor and other is trader. Strategies for investors and strategies for traders can vary.

To select proper investment / trading strategy or system, one should know that is he or she investor or trader? Investor who has long term perspective or trader who has short term perspective

If your investment perspective is for short term then you should concentrate on short term trading strategies. For short term trading you need to have knowledge of technical analysis, which help you to find and predict price movement ( at some extent) in short run. Fundamental analysis do not help you in short term as it is good for long term investors.

Also there are many types of stocks available in the market such as penny stocks. These are though very risky but if you trade penny stocks with sound knowledge of technical analysis you can make big money in less money.

Making money with penny stock is not difficult, all you need to find a penny stock company that has good prospects in near future. Also you should have a trading strategy that has good success rate. Technical analysis is good for short terms trading so make your trading strategy based on it.

Though technical analysis is complicated but very helpful to find profitable opportunities for short term. It needs time to learn, before investing in any stock devote little time to learn it and make a simple but effective trading system. Initially do paper trading only and find whether it works on not.

No trading system in world will give you 100% correct results all the time. But you can use any good trading system that has 70% to 80% success rate. Remember successful trading is not only finding entry and exit but also proper use of stop loss and money management.

If you make your trading strategy that has acceptable success rate and use other trading techniques i.e. stop loss and money management, you will make money in the stock market, Yes even in penny stocks.

The percentage gain in penny stock is mind boggling. To explain it here is an example. Say you invest in stock ABC that is trading at $2 and you purchase 100 shares, your investment becomes $200. Now if the stock rises to $3 then your investment becomes worth $300 an profit $100 (i.e. $300 -$200). In other hand say you found good penny stock companies having good future prospects, trading at say $0.20 (twenty cents). Now if the penny stock rises by $1 same as previous one, your gain will be $0.80 (Eighty Cents). If you had invested the same amount of shares i.e 100 shares then your investment would be for that penny stock $0.20 X 100 = $20 . So your gain is $80 on Investment of $20 and percentage gain is 300% ! That is why people love to invest in penny stocks.

by: kinnari patel

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