Big Money Forum >> Stock Trading and Forex

Penny Stock Market Investing

You can make the most money in stock trading by investing in the penny stock market. This is one of the highest yielding investments that I know of. What you need is some basic knowledge and penny stock myth busting to get started in this kind of trading.

First off, I would like to direct viewers to our Stock Investing Forum which has a whole selection of categories ranging from penny stocks to big board stocks. Also including is a stock market school forum for people who want to learn how to trade. Also in this forum is a category for Forex trading and learning how to trade forex as well. For now, this article will be about trading penny stocks and how much money you can make from them.

Penny stock investing is a highly volatile and high risk trading investment. What people sometimes do is overestimate how high risk they really are. Most penny stocks move slowly enough for you to make trades safely. I stress that it's extremely rare for a penny stock to just "go out of business" and I've never seen it myself. These high yield investment choices for selling and buying are quite easy if you watch a stock long enough to realize what is low and what is high.

The most important rule to keep in mind is only trade money that you can afford to lose, this is not something you want to put huge amounts of money into like you would with the big board stocks. A lot of times the trading volume is so low with penny stocks that you can only put in so much money into it without having too many shares that can be sold again. Although some penny stock companies have a lot of people trading so it wouldn't matter much, but sometimes if you have enough money, you can single handedly alter the price per share yourself while you could never do that with a stock like Google that trades millions of dollars per day.

Let's say you deposit money into an online stock broker such as Scottrade. You only need the minimum of $500 to make a large amount of money. The first thing I would do is pick some appealing stocks. By appealing, look at their charts at stockcharts.com and read about their news and company information. If you are just trading, you should ask questions on our stock school forum and learn chart analysis so you can tell which ones are good or not. You can find some good stock symbols on our penny stock forum and study those for instance.

High Yield Stock Trading

After you have gotten some exposure to basic trading, you will understand how to trade penny stocks and how they work. You'll realize that some stocks only trade a few $1000 per day, but many people get 100% gains such as a stock trading at $0.0001 ends at $0.0002. This happens often and a lot of nice stocks jump up to $0.0005 every month or so.

These are great for buying $100 worth of shares of a penny stock at $0.0001 and waiting a month for it to make a 500% gain ($500). Then find about 10 of these types of stocks and put in $100 and you'll have $5000 and you can keep doing this. This is called "swing trading" as it's not long term investing and it's not day trading. It is my preferred style of trading in fact!

The trick is finding these stocks; you have to look hard, either by looking back at older posts in our forum or keeping up with new stock symbols on our penny stock trading forums. Usually I'll just find a symbol and look up it's chart and price per share. If it looks good, I'll watch it and see if it's safe enough and has a healthy volume to buy and sell properly. If you found some stocks elsewhere, feel free to post them up on the forum, you may just get more volume for the stock this way if traders know about it and you'll have a better chance of making money this way.

My strategy is once you make huge amounts of money, either cash out or put it in the big board stocks. These are stocks like Google "Symbol: GOOG". Big boards are big money stocks, not necessarily that they can make you very much, only about 15% return on investment each year, but they are good safe places for putting big money.

That's why I STRONGLY recommend trading penny stocks if you only have less than $1000 to invest, unless you are willing to make between 5% and 15% gains over the course of an entire year. In my opinion, this would be great if you make 15% on a $20000 investment but you can't make much if you throw $100 into one of these stocks! Like I said, big boards are for big money.

If you are an experienced trader, please share your stock picks on our forums. Investors who prove themselves on the forum with great picks will be given a status rank next to their name ;). This is a reputation indicator so that other investors will know that you have experience and will pay attention more closely to your stock watch lists.

New investors are advised to ask questions on the forum to learn how to trade stocks more safely and make money with stocks more efficiently. The danger is you can lose money just as quickly, especially if you buy and sell at all the wrong times from not watching the stock long enough. Believe me, I've learned the hard way! So invest wisely and be patient by watching the stock closely enough to know the best buy in and sell out times.