How to Invest into Penny Stocks

How to invest into penny stocks is one of the hardships that beginner investors are facing. Penny stocks refer to the companies responsible for trading and having low price of share which is less than $1. There are lots of rookie investors who are hooked when it comes to buying into a certain company spending only few of their money and selling it for substantial profit especially when the trade prices back in their levels equivalent to multi-dollar.

Here are the steps that beginner traders can follow on how to invest into penny stocks:

Open an account

It is important to consider the factors that affect the way you would open an account such as customer service, fees, and the convenience of transferring the funds. There is a need to find for a broker who would cater your needs. For penny investors out there, it is very much needed to pay attention to the fee structure. There are brokers who would charge commissions on per-share basis. This is a kind of structure that is usually set in a certain rate especially for the share’s first number, then requiring another rate in each of the additional share. This is best suited for those who want to buy shares having relatively low numbers and not the kind of structure suited for those penny stock traders.

Where to find for the penny stocks

How to invest into a penny stocks would require you to find the best penny stocks that are suited to your needs.  There are lots of stock exchanges having special lists of their requirements. There is a need for traders to become wise enough in finding for penny stocks that would cater their needs in order to avoid waste of time and money. This would give you an assurance that you would get your desired result and all you need to do is to have some time in finding for the right one. You can choose the one that is chosen and recommended by most to avoid disappointments in the end.

Narrow down your trading candidates

After understanding where you would trade for penny stocks, the next thing that you should do would be determining the kind of stock that you are going to trade. How to invest into a penny stocks is not an overnight process that is why do not expect that you can do it easily. But, having the basic knowledge about trading would make it easier for you to make the work become successfully done. There are different methods that can be used and one of which is through the use of screening tools for stocks. Choose a stock screening with lower price for narrowing down the trading to filter your list down depending on the strategy as well as the tolerance risk.

Understanding what the risks are

It is important to know that there are also risks on how to invest into penny stocks that is why investors should be willing to take all of those for them to choose the right penny stock to invest with. Companies having small-cap stocks are considered to be vulnerable to volatility. Putting money at risk when attempting to gain more out of it would always give you a risk of having substantial loss. This is true especially in investing into penny stocks that is why there is need to tread having caution. Institutional investors like money managers, index funds, and mutual funds have set up rules preventing them to trade within the penny stocks thus lacking in following investment community. Liquidity is one of the serious concerns that should be given much attention.

Bottom Line

How to invest into penny stocks can be very risky if not suited for everyone. This is the reason why there are lots of traders who were not able to find a good career in the trading industry due to the fact that there are also factors that affect the trading industry. Finding a good broker is very much essential especially of you want to understand what the risks are. The next thing that you should do is to fund your account then find trading candidate that us suitable to cater what your needs are. To narrow down stock’s universe, there is a need to find the right stock screeners to find the one which meets the kind of trading style that you have as well as the risk tolerance.

Those are the easy steps on how to invest into penny stocks which in turn would give you an assurance in finding good penny stocks that are suited on your needs. It is not easy to find one that would benefit you a lot but through the help of technology today, there is a greater chance of finding the right one. All you have to do is to have the basics when it comes to trading as well as find the right broker who would help you in many ways.

Penny stocks are becoming more popular due to the fact that there are lots of investors who are need of good stocks that they can invest with. This is the reason why brokers are also known in the society knowing that they are responsible for helping the investors in finding good stocks that they can invest with. Knowing how to invest into penny stocks is risky and arduous. Investors should always be willing to take all the risks that it would bring so that they would be able to become successful and progressive as well.

Having basic knowledge in trading would make you aware when it comes to the trading industry which would let you to know the strategies to have good stocks for a lifetime investment. It is important to consider that how to invest into penny stocks is different from other forms of investment that is why investors should be wise enough in many aspects to make trading become meaningful and successful and for them to move forward to success that they want to achieve.

Best Stock of the Month

Our top pick for April 2011 is WLK ( Westlake Chemical Corp. ).


Please remember that we do not post sell signals for our Stock of the Month picks. You will only receive an email telling you exactly when to buy or sell those stocks if you are a paid member.

Overbought Market

Due to extremely overbought markets over the last few months, we have decided not to publish out ‘Stock of the Month’ free pick until the odds will be on our side again.

Stock of the Month January 2010

The best performing stock this month is ONP (Orient Paper Inc.). ONP engages in the production and distribution of paper and paper products in China.

Best stock for January 2010

Learn how to get buy and sell signals on ONP and other great stocks here.

Best Hot Stock For December 2009

The hot stock of the month for December 2009 is TSTC (Telestone Technologies Corp).  TSTC provides wireless communications coverage solutions in China and internationally.
hot stocks December 2009

Is TSTC still worth buying? Click here to see if  TSTC is on out buy list.

Best Stock For November 2009

The best stock to buy this month is AIXG (Aixtron Aktiengesellschaft). AIXG is a provider of deposition equipment to the semiconductor industry.

Best stock to buy November 2009

Make sure you have a clear exit strategy if you buy AIXG or any other stock right now. It looks like the bear market rally is over and the overall market may start going down again. The AIXG chart looks better than most other stocks, but its uptrend may come to an end if the overall market trend goes down.

Today’s Hot Stocks subscribers already have a 40% gain on AIXG and will be alerted to sell it as soon as the uptrend is over. You can get your 60-day trial here.

Best Stock for September 2009

The best performing stock this month is APT (Alpha Pro Tech).

APT engages in the development, manufacture, and marketing of disposable protective apparel and infection control products in the United States and internationally.

hot stock to buy September 2009

Is APT still worth buying? Click here to find out!

Best Stock August 2009

The best hot stock to buy this month is DGT (Dollar Thrifty Auto Group Inc).

Dollar Thrifty Automotive Group, Inc., through its subsidiaries, rents and leases vehicles through company owned and franchised stores under Dollar and the Thrifty brand names primarily in the United States and Canada. It also operates a franchised retail used car sales network.

Best stock to buy August 2009