subject: Learn To Make Big Profit With Penny Stocks [print this page] 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.
Generally investors are those who invest in the market or stocks for long term perspective and traders have short term perspective. Many people who want to make money from stock market do not recognize themselves whether they are traders or investors.
Analysis or research is very important when you invest or trade. Fundamental analysis is helpful for those who are investors and look for long term gains and other hand those who look for short term gains should opt technical analysis.
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.
If you want to make money with penny stocks you need to find a penny stock company that has good prospects in near future. Use technical analysis for good entry and exit points and trade according to it. Technical analysis will help you to find good entry exit points.
Technical analysis is very complicated and it needs time to learn. So before you invest in penny stocks or any other stocks spend some time to learn it and try to make your own trading strategy. Initially do paper trading to find how your trading system works.
Any trading system that gives you 70% to 80 % success rate consistently is good trading system. Do not waste your time to find trading system with 100% success rate all the time; there is no such system exists. With good success rate and using other methods such as stop loss and money management will improve your trading performance and hence the profit.
If you can make a simple trading system, having good success rate say 70% success rate and use it with other trading techniques such as money management and stop loss you can make big profit in any market or stock. 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.
