Firstly just what is Penny Stock?
The Security Exchange Commission (SEC) defines anything Stock as anything in price under $5. These are Stocks that are by there nature riskier. They are thinly listed and can move up and down fast. These bankruptcies are not your blue chip Stocks that you might invest in and don't think about a again for another holiday season. These are Stocks to make certain traded! The upside of course is risk goes in conjunction with return. People have forfeit fortunes with penny Stocks nonetheless they have also made fortunes, and sometimes in a very little while. Firstly a few points to watch after, BEWARE of placing capital orders. These Stocks with a few there very nature go thinly traded. You want LIMIT industry orders. If you don't you'll will be taken. Now close to basic strategy I will lay out for you today.
First required Market Screener, there are lots of free ones available and i also recommend Yahoo Finance Screener, its comprehensive, its reputable and comfortable. Once you have your screener try out and screen for the kind of Stocks we are seeking for.
1. We are locate the penny Stocks, these are Stocks under $5 and now we want a share equal or less toward a amount.
2. Next collection the screener for capital capitalization. Generally between $50 to $300 million is alleged a microcap Stock. We would like penny Stocks though and now we will set our screener to supply under $100 million. If you have trouble finding Stocks that meet the requirements other criteria this market screener can moved up to mico reduce territory.
3. This strategy looks for Stocks might be a little unfavoured for now. We want to start in on our Stock cheap. So next set the next screener for Stocks that have already shown declines during the last year. We can do this since with our other screeners we will be hunting signs of value.
4. We want Stocks that are producing positive earnings growth. Class the screener for for sure earnings growth.
5. Next select Stocks to enjoy a PEG of less than simply one. PEG is slightly far better PE as it happens when growth. A PEG of beneath it one suggests it also provide slightly under valued.
6. Set sales volume to $500000 a day, with penny Stocks it can be necessary that you have enough volume launch it. If it has no trading volume keeping track of good a Stock is
7. Finally set sales volume to 1 million. Sales are less in order to manipulate than earnings
And there you've simple 7 Point route to investing in Penny Stocks. Please note that case a starting point for putting in Penny Stocks. It is another way to select Stocks. Also you will still need how you EXIT the share and when you get.
As I have spoken about early Penny Stocks are RISKY but you will also have high REWARDS. There are many examples of people that have made fortunes at a young age in Penny Shares. A well liked example is Timothy Sykes who made $2, 000, 000 while for less than his dorm room. He then get a hedge fund which crashed (There's the risk) but hes caused it to be back again Another mimic is James Connelly and even the "Penny Stock Prophet" when he is known, He while for less than college, came up uncovering a strategy that could full $1000 inton $1, 000, 000 incorporated into 38 trades. His work his headquartered in Quantative Behavioural Finance which happens to be basically the effect that human psychology has on share pricing.
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