Here Is All About Penny Stock Trading

By Dan Yoraway

Nothing in the market is more attractive to the public than "penny" stocks, mainly to traders who have fairly small accounts. The reason for their attraction, rightly or wrongly, is the amount of leverage one can get if the right stock is chosen. More than likely, every one of us have fantasized about owning 1,000 shares of a $0.50 stock and have it skyrocket to $1 or $2 for triple digit gains. But what are "penny stocks" and how can we best take advantage of them?

A "penny stock" refers to a stock that trades below $5 per share, and for a number of reasons,these are considered to be the choice of the people who invest with limited funds. Though, trading penny stocks is a double-edge sword, as a lot of newbies to trading quickly discover.

For example, a penny stock can return magnificent gains, even with comparatively small investments. But they can also take magnificent losses as well. Therefore, it is best that a penny stock trader is armed with the best possible tools, and with as much knowledge as possible before venturing into these shark-infested waters.

The good news is that knowledge about the fundamental company is not required, nor is it required that the investor research company fundamentals. The reason is because all knowledge is obtainable from one simple source---everything that is known about a company and its fundamentals exists in the action of its stock chart!

It is true that that market is like a polling station, where a lot of individuals are making a speculative "bet" on a number of instruments. If this action is properly interpreted, what better "opinion" can there be than a hundred thousand people placing hard money on the line? So, throw that analyst opinion out the window, toss those earnings reports in the trash, and ignore all "news" concerning the company, because every conceivable piece of information is built into the chart. And it is reflected instantly, in real time.

But the best news of all is that chart interpretation is done for you, right away, there are a lot of products accessible on the internet which you can make use of. By using comprehensive software products we can easily see which penny stocks are receiving the action, right now. This will also reveal which stocks have the greatest probability of a near-term move. Above all, it will keep you from making mistakes that could prove expensive, or even fatal to your finances. - 31970

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