Investing in stocks is not only exclusive for hedge funds. Even ordinary individuals can buy stocks at cheaper prices and even make good profits from penny stocks.
However, there is risk involved with penny stocks, so it’s recommended you only invest the amount you can afford to lose. One of the easiest ways to put money into the stock market short term is to use personal loans for bad credit but not payday loans.
In trading penny stocks, there are many things you should consider. It’s true that there are many traders like Timothy Sykes who have become successful in trading penny stocks, but they have gone through valuable lessons to where they are at today.
The good news is you don’t have to go through the same mistakes as today we will be going over penny stock advice from Timothy Sykes himself. Let’s get started!
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- Don’t Be Blinded by Penny Stock Promoters
Most penny stocks are not traded in larger regulated exchanges such as NYSE or AMEX. The most common reason is that these stocks have not been able to meet the requirements of the securities exchange commission (SEC).
The truth is that 99% of penny stock companies aren’t likely to become successful. This is the reason why they are categorized as penny stocks. This is why penny stock promoters work hard to convince people to invest in them.
- Have a Realistic Profit Projection
If you are a beginner, you are probably wishing to double your money within a very short period of time. The problem is that trading in penny stocks doesn’t consistently offer such opportunities. There are times your profit is high, but there are times your losses are high as well.
Timothy Sykes only settles for about $0.50 profit per share for every trade he makes every day. With this profit projection, he can get in and out of trades frequently within the day.
- Do Not Underestimate Risk
When trading penny stocks, don’t focus only on opportunities; instead, measure the amount of risk based on time. You should respect the risk involved in trading penny stock as much as you respect the corresponding opportunities. The higher the return you want, the higher is your risk.
Sometimes, the market can be deceiving as you can see a consistent upward trend that will convince you to make a decision. However, right after you jump in, prices may drop to its historical low even just after a few minutes. This is a common scenario in penny stock trading, so you have to be careful all the time.
- Record Your Success
When you make some winning trades, you should create a personal trading journal. Although most trading platforms automatically saves data and provides comprehensive analytics; it’s still best you keep your own record in a manner that isn’t too complicated for you.
- Don’t Forget Yourself
It’s common for traders to spend all day monitoring the market and to spend all night studying it for the next day’s trading.
Because of this, most traders forget to eat or sleep. Don’t forget the market, but don’t forget yourself, too.
Investing in penny stocks is becoming more and more popular these days. On the contrary, more and more people also become cautious of trading this type of stocks.
This is because there are more losers in this type of trading than winners. If you want to increase your success in trading penny stocks, the above tips from Timothy Sykes are worth pondering.