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    Penny Stocks Made Simple - A Beginners Guide To Day Trading Penny Stocks
    Penny Stocks Made Simple - A Beginners Guide To Day Trading Penny Stocks
    Penny Stocks Made Simple - A Beginners Guide To Day Trading Penny Stocks
    Ebook50 pages42 minutes

    Penny Stocks Made Simple - A Beginners Guide To Day Trading Penny Stocks

    By Adidas Wilson

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    About this ebook

    Are penny stocks right for you? This is not a simple question. The only person who can answer this question for you is you. However, there are arguments for and against the entire idea. Penny stocks tend to be more volatile and very risky. In most cases, they represent newer or smaller companies which face many challenging obstacles. On the other hand, they offer the possibility of making a fortune over a short period of time. Before you invest in penny stock trading, do some soul-searching, be honest and find out whether this is the best thing for you. There is no shame in admitting that these low-priced investments are not compatible with your risk tolerance or your portfolio. Contact your financial advisor and have a lengthy conversation with him/her. Before you talk to them, you can almost be sure this is what they will tell you: penny stocks are way too risky, they are not suitable for any investor. Your financial advisor may not know this but there are two ways to invest in penny stocks; the right way and the wrong way. If you do it the correct way, you decrease the risks significantly and open your portfolio to potential gains. As a matter of fact, several of the greatest American companies started as penny stocks and they are now household names. Are penny stocks right for you? This is not a simple question. The only person who can answer this question for you is you. However, there are arguments for and against the entire idea. Penny stocks tend to be more volatile and very risky. In most cases, they represent newer or smaller companies which face many challenging obstacles. On the other hand, they offer the possibility of making a fortune over a short period of time. Before you invest in penny stock trading, do some soul-searching, be honest and find out whether this is the best thing for you. There is no shame in admitting that these low-priced investments are not compatible with your risk tolerance or your portfolio. Contact your financial advisor and have a lengthy conversation with him/her. Before you talk to them, you can almost be sure this is what they will tell you: penny stocks are way too risky, they are not suitable for any investor. Your financial advisor may not know this but there are two ways to invest in penny stocks; the right way and the wrong way. If you do it the correct way, you decrease the risks significantly and open your portfolio to potential gains. As a matter of fact, several of the greatest American companies started as penny stocks and they are now household names.

    LanguageEnglish
    PublisherAdidas Wilson
    Release dateAug 10, 2019
    ISBN9781393024002
    Penny Stocks Made Simple - A Beginners Guide To Day Trading Penny Stocks

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      Book preview

      Penny Stocks Made Simple - A Beginners Guide To Day Trading Penny Stocks - Adidas Wilson

      Chapter 1

      Day Trading

      Day trading is quite alluring. Making money by trading from your couch is way more exciting than a 9-to-5 gig. The problem is that if you are an inexperienced or careless day trader, your portfolio can be wrecked in a matter of seconds. You need to understand the ins and outs of day trading and how you can minimize the risks. What Exactly Is Day Trading? Day trading involves purchasing and selling securities in a short frame of time, usually a day. The aim is to gain a small profit with each trade and compound the profits over time. Cheap trades and online brokers facilitated the viability (and level of risk) of day trading. It enables investors to turn quick wins into a huge bankroll. Practically, however, it is much harder to make profits through day trading. A study conducted in 2010 showed that it is only 1% of day traders that make profits consistently. The research was carried out over a period of 14 years. The small number of day traders who consistently make money devote a lot of their time to the practice. Eventually, they make it their full time job—they do not just trade quickly at lunch or between business meetings. If you really want to try day trading, borrow a leaf from the experienced full time traders. How Does Day Trading Work? Day trading is highly volatile. Day traders heavily depend on the fluctuations of the market and the stock to make profits. Securities that bounce around throughout the day are highly liked. It does not matter what causes the fluctuations; be it general market sentiment, negative/positive news, or bad/good earnings reports. Day traders also love highly liquid stocks—these ones let them move in and out without significantly affecting the price of the stock. A trader may purchase a high moving stock or short-sell one that is moving lower in order to profit on its fall. Sometimes, they trade the same stock severally in a day to benefit from the changing sentiment. Regardless of the strategy they apply, their aim is to find a stock to move. What Makes Day Trading Hard? There are two reasons for this: Retail day traders compete with professionals. These professionals know all the traps and tricks. They have access to personal connections, data subscriptions, and costly trading technology. They are set for success, but they still fail. The field is crowded. Retail investors are subject to psychological biases. They hold losers for way too long and sell winners too early. They are scared to buy declining stocks. First, you need to ask yourself if you have what it takes to get into day trading. You cannot be faint hearted, and you should have intense focus. Before you commit real money, consider getting a practice account. Brokerage accounts typically offer practice modes. You trade hypothetically and see if your strategy

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