The stock market is the glue of the American economy. Nothing can make you more money or is scarier than
buying penny stocks. Penny stocks are stocks which are lower than a dollar or are very cheap compared to the
majority of stocks on the stock market. It might seem easier to make a whole bunch of money from buying penny stocks but you must still think of it as you were if you were buying stocks for the long term. Over time everybody who trades can fall into a Angies's list of penny stock trading no-nos. Don't do anything that you see on the list of don'ts or you may be the next victim who you may loses their money. Any trading rock stars can be very profitable if they maintain and emotionless and very technical mindset.
Do Not Gamble
Do not gamble on stocks. Stocks are for not gambling, Vegas is. To go down the S&P and pick a stock to invest in is not smart. Stock prices go up and down, and if you want to bet on penny stocks you are pretty much throwing your money in the garbage. Other investors start by investing on stocks that they feel are "lucky" about. Stocks are not a matter of luck. Experienced traders look at technical analysis and company information to know when they should buy stock in a company. There are many softwares out there that you can use. They'll help you do this analysis.
In 2007/2008 There Were 1500 Stocks That Climbed 25% In One Day!
If you get an e-mail which is probably a spam e-mail telling you to buy this stock because it is going to go up to 1000% in the next month... don't do it. REPEAT, DO NOT DO IT! The stocks you purchase should be based on your own analysis, and in using your own determination of the value of a certain company. People will center around spam e-mails or get on message boards or tell everyone to buy the stock, are called stock pumpers or fluffers. Stock pumpers are people who are in the penny stocks profit market and tell everyone that a certain stock is good to create buzz, only to pump up the price and then sell their shares once it rises. When the bizz dies down, so does the stock price leaving everyone else at a loss. These are mean people. I don't want you to fall for their games.
Don't Get Excited
Trading Stock based on your emotions is the number one way that you are going to lose money. In order to trade penny stocks profitably, you must do it only using your brain and not your heart. Going into the stock trade you
must know when you want to buy a stock and when you want to sell a stock, this is called a stop loss. It's hard to
sell a stock when it's going up and it's hard not to sell a stock when it's going down, that's why you have to be technical and not think with your heart. Create a stock loss, it's best for us all.
The Most Important Don't Is... ( Drum Roll)
Do not get caught up in the hype of a story. Trading penny stocks is only a way to make money in the short term or long term. You should not buy a stock because you like its story, somebody told you about it, or because you like your Apple Computer. Liking a certain product that's in your home does not mean that the company will be profitable. While you should know the company's executives and the companies strategy for business, loving a company with no other reason then liking its story is a recipe for failure.
Avoid these major don'ts in trading penny stocks and you will be successful. The stock market moves up and down so go with a cool head and a heavy heart and you can have money for retirement or anything else in the short-term or long-term.