Getting Started With Penny Stock Investing

Penny Stocks are the cheapest stocks of small emerging companies that have little value. Most often, they are traded by scammers, which is why Penny Stocks are considered junk stocks. Historically, the value of such shares should not exceed two dollars. The minimum allowed cost is one cent.

Novice investors invest their savings in similar stocks with cheap capitalization, which can be sold or bought on the well-known NYSE and NASDAQ exchanges. However, this is an erroneous opinion outpost to consider these exchange-traded shares as Penny stocks. Since in reality, they cost more than 1 cent.

Places of Purchase Penny Stokes

Penny stocks can be purchased on the electronic American over-the-counter trading platforms (OTCBB) and OTC Markets Group or through your authorized broker. The most popular platform is OTCBB, as it requires companies to provide data on accounting and financial statements before putting their shares up for free sale. Also, companies are required to pass audits if necessary.

Earning Money on Penny Stocks

Not all investors are eager to invest in penny stocks. This is only because the shares are too exposed to changes in the price index over short periods, and these indicators are not stable.

But this has its advantages – shares in just a few hours or days can grow in value several hundred or even thousands of times and make their owners rich. And such cases are not uncommon. There are many stories about how investors, with the help of penny stocks, were able to increase their profits by 1000% in a short time. The most basic rule is investing in penny stocks and find the "gold-bearing" penny stocks.

Getting Started With Penny Stock Investing

How to trade

The correct thing is to listen to the advice and analyze the experience of successful investors. You can trade illiquid stocks with the expectation of the effect of a merger of small companies. This is quite profitable to implement with companies in the field of IT technologies.
Several OTC platforms are operating on this principle:

They can be used to analyze securities available for sale by profit, the presence of the company's assets, and annual profitability. Every day, about a thousand new shares appear in the price range from one dollar to five.

How to profit from Penny Stocks
To get the maximum profit when trading with Penny stocks, you need to conduct a clear analysis of the following indicators:
basic business;
financial indicators;
notes to the financial statements.
The first indicator is much more important than the shares themselves. This is because cheap shares are an opportunity for many fraudulent companies to make a profit without conducting any commercial operations. Since there is an opportunity to use the Pump & Dump scheme to attract profit, it is worth tracking companies with real operations and financial assets, but with a minimum capitalization of their shares.

Financial indicators and financial statements are most likely to prove the real value of shares on the market, and the conducted analytics will help not to make a mistake in choosing a legal developing company.

In conclusion
You can make money on penny stocks, but you need to invest wisely. The main advantage is that you can multiply your investment thousands of times and for this, you only need a phone or computer. If you don't have the right equipment, you can always buy it on Swappa. Cheap shares of Penny stocks are a real opportunity to get the maximum profit quickly, despite the high risks of losing the invested funds. But do not forget that this niche is a fertile ground for fraudulent players who profit from inexperienced and novice investors. Therefore, special attention should be paid to the beginning of trading penny stocks on OTC resources. You should first take the time to conduct certain analytical calculations and observations, study the company's structure, the availability of its assets, and accounting and financial transactions. And only then make decisions and make investments. That's when you can win.

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