How To Use Online Stock Trading For Your Success

by Mark Crisp
Many investors will tell you that trading in stocks might be the good old-fashioned way of investing, but it works. Regardless of the ups and downs, and there are many on the rollercoaster that is stocks; stocks are an exciting game that has a place for anyone. In the age of the information superhighway there is a whole world of varied stocks that you can build wealth with. You might only make enough money to use in your next investment but with online stocks the door is truly open.

Online stocks are a huge market. You can start online with cheaper penny type stocks and you can even purchase some of the high-end stocks for a couple of hundred dollars a share. Like most online shopping, most of the stocks that are for sale online are available in the real world market, but they cost more. Because of the lack of human contact and advice given, buying online stocks gives you the opportunity to get into the game without the high fees of your average broker. The online trader is also completely in control or his or her stocks.

Trading online does mean that you will have to be familiar with certain terminology. To do so we have compiled a list of some select of the most common available online stocks and their meanings. We suggest you take these means and do some more research. Let's look over what kind of stocks can be brought and purchased online and in the real life stock market.

Penny Stocks: While not all 'penny stocks' actually cost a penny, they are the cheaper stocks on the market and are considered cheap and dirty by some. Others however have made large profits by trading in penny stocks, because once the price raises you can sell the many stocks you have purchased and make a return. Penny stocks are normally available for upstart or new companies who want to offer their stocks at cheaper prices to get them off the floor. Trading in penny stocks is a common form of online trading.

Blue Chips: Like their name suggests blue chips are premium stocks. Blue chips are the stocks of companies whose names you hear every day. So if you look at the steel that your fence is made from or the airline you fly with, you will probably find that their shares are blue chips. Because of the 'assurance' that blue chips will continue to grow, they generally cost a fair bit and are amongst the highest priced stocks. Blue chips are known for being strong and either maintaining their price or slowly growing over time. Blue chips also have the added value of climbing rather rapidly after a fall or at least recovering quickly. Bonds & Futures: Bonds include municipal offers and can be issued by the companies. Futures however normally relate to farming crops, so if the oranges crop is doing well the orange futures will also do well. Futures also include wheat, livestock and other farming products.

If you really search you can buy almost any kind of stock online, all it takes is someone willing to sell them. The availability will depend on which website you are using and what they have access to.

Like any form of stock trading, just because you can now buy and sell your stocks online, that doesn't mean that you should forget all about being careful and doing your research.

Are There Benefits Of Online Stock Trading?

by J. Lloyd
The first stock exchange in late 1700's Philadelphia in United States Of America created a new way in the market of finance and economy which further led to the discovery of New York Stock Exchange (NYSE). Now with the discovery of latest technology, a turning point has come in the method of stock trade through a network of computers.

This new method has given rise to a new level of convenient and liberty to trade stock at your own comfort. Trading stock online has been becoming popular tremendously as a large percentage of population is having an access to the computers.

How To Trade Stock Online

The method of trading stock online starts by building a business relation with an online trading brokerage firm but it is always recommended that you should build up a bond with a highly reputable and renowned company. You should always gain the knowledge about the company by making researches via internet before getting into a business relation with it.

After finding an apt and appropriate brokerage firm, an online account is created in order to trade through it. This online account plays a significant role in trading stock online as it keeps on giving the updates regarding the financial portfolio so that the investor can proceed accordingly to hit the financial targets.

Benefits Of Online Stock Trading

The online trading of stock has brought a twist in the methods of trading in the market of finance and economy. There are numerous advantages of trading stock online.

1 - It has given a level of convenience to the investors as they can easily buy and sell the financial products from the comfort of their home. 2 - There are many stock trading companies that offer low charges of membership, trading, and commission because of the great competition in the finance market. There are so many companies which do not take any cent to start trading through them.

3 - It proffers the level of freedom to the investors where they can make investments in the finance market according to their interest.

4 - The online stock trading companies help in providing the information like NASDAQ quotes, real-time charts, latest news and information of the market without charging a single penny.

There is also a facility of downloading your investment's performance on regular basis to have a proper track of your investment. Also there is a facility offered by many online companies to listen to the audio and video conferences of the topmost professionals of the finance market, and to go through the latest market editorials.

5 - There are many alluring proposals, which are proffered by different online stock trading companies. For example, many companies provide minimum $25 free for just signing in, if you create an account with them and deposit certain amount then you will be given a commission free trade worth $100, and if you are maintaining specific amount in your account then there is no need to pay for IRA money market fund trades.

There is also an offer of getting 20 free days for trading online every month if you are a resident of US and are into online stock trading since last two years.

The above-mentioned points have proved to be very much beneficial to the investors to grab large amount of profits in the thrilling market of finance.

5 Tips To Make Money In Trading Stocks Online

by J. Lloyd
The discovery of internet has made the methods of doing businesses very easy and comfortable. It has also taken the market of stock to the heights as the large percentage of population has opted the method of trading stock online.

Tools To Start Trading Stocks Online

The method of trading stock online has been proved as the most convenient and successful method of trading stock. It is also very easy for anyone to start trading stock online by just possessing 3 important tools which are:

1 - Computer: If the whole procedure of trading has to be done online, then it is obvious that the main foundation of this trade is the computer. If anyone wants to start with online stock trading then he should possess a fast computer with Windows XP as its operating system.

2 - Internet: It is the major component of online trading as it will connect you to the various companies of the stock market. It is always suggested to go for a high speed cabloe or broadband internet connection.

It is always recommended to have an internet back up even if you possess a good net connection as there are the chances for the net to get down. You should always possess an access to a telephone line if, in any case, your system gets disrupted and you want to exit the trade then by using telephone you can inform the broker regarding the same.

3 - Brokers: In order to enjoy the excitement of trading stock online, one has to require a broker through whom you will be involved in online trading. There are many online brokerage firms possessing different fees and offering different services. You should always opt for the online broker that proffers good stock trading and charting software. You should always select that online brokerage firm which offers market data and the updated information to all its clients.

Before going to have the tools for online stock trading, you should jot down the things which will be required by you from each and every tool.

Tips To Make Money In Trading Stocks Online

There are many people who have been successful in making out huge amounts from the online stock trading. The following 5 tips will really help the online traders to make out dollars from online stock trading.

1 - Chart reading in stock trading is the most beneficial step for the traders to trade efficiently. By becoming skillful in the activity of reading charts, you can easily judge out the stocks that will move up.

2 - It should be habitual to set stop loss orders whenever you make trade else your entire account will get smashed. You should always proceed in the game by scraping down your losers early and by allowing the winner to continue. Basically, this is one of the tactics of the trade.

3 - You should never purchase the stock which is dropping down with a perception that it will increase suddenly after you will purchase it. You should always opt for the stock that is constantly moving up and will keep on touching the heights. Therefore, you should get rid of a myth "buy low and sell high" from your mind.

4 - You should never give an importance to the media personalities rather it is recommended to work independently while trading online. This is so because there are frequent ups and downs in the stock market and by the time information of the media persons reaches you, it becomes too late. Therefore, it is always recommended that you should always work with your brain instead of trading by using someone else's brain.

5 - You should always search for the brokers whose commission share should be low else your profits will be spent in paying the commission to the brokers.

These five tips will really help everyone to hitting the jackpot while trading stock online.

Why I Like Penny Stocks

by Jim Pretin
Most people consider penny stocks to be a poor investment. I, on the other hand, think that investing in a penny stock before that company becomes profitable company is the best way to invest, because you can make a lot more money with penny stocks than would ever be possible with blue-chip stocks. I will now outline for you what you need to know about penny stocks and how to find the best one in which to invest.

Penny stocks are defined differently depending on who you talk to. Stockbrokers define them as any stock that trades below $5 per share. Regulatory agencies sometimes classify them as a stock with a price below $2. But, generally speaking, a penny stock is any low-priced security that trades on one of two exchanges; the Pink Sheets or the OTC Bulletin Board.

The Pink Sheets are an exchange where most startup companies first get listed. There are no listing requirements to be traded on this exchange. A company does not have to have any sales, nor does it have to reveal how many shares outstanding it has to qualify for the Pink Sheets.

The reason why a company tries to get listed on the Pink Sheets, even though their stock will not go up in price because they have no sales to speak of, is because it gives their company more substance and credibility; it is typically easier to attract additional capital, obtain financing, and execute contracts and agreements if a company is publicly traded, even if it is on the Pink Sheets.

Also, it is easier to get transferred from the Pink Sheets to one of the larger exchanges than it is to go from being a private company to hopping directly on to one of the major exchanges, such as the NASDAQ or NYSE. Companies listed on the Pink Sheets trade as ridiculously low as $0.00001 per share, all the way up to $500 per share and sometimes beyond. Foreign companies often have some of their shares sold in the United States by listing them on the Pink Sheets.

The OTC (Over-The-Counter) Bulletin Board is similar to the Pink Sheets. This exchange consists of relatively young companies either with no sales or a small amount of sales. Companies listed on it are sometimes fully reporting (meaning that they reveal how many shares they have outstanding and what their balance sheet looks like). Often, companies go from the Pink Sheets to the Bulletin Board once they are ready to become fully or semi-reporting.

Most publicly traded companies that are now listed on one of the major exchanges (NASADAQ, AMEX, NYSE), at one time or another, were penny stocks listed on the Pink Sheets or Bulletin Board. Rarely does a company go from being private directly to one of the 3 major exchanges. Google is a rare example of a company that was able to do that, because they were so successful so quickly. But, most companies have to pay their dues and edge their way up from the penny stock exchanges to the bigger ones.

So, investing in penny stocks can be an excellent investment because some of these young companies will one day be worth a fortune. The hard part is finding the right company to invest in, because for every successful startup company, there is also one that fails within the first year or two.

To find the right company, there are a few things you need to look for. Number one, you need to do some research and try to find out how many shares the company has in its float. The float is the number of shares that are currently being traded. Companies listed on the Pink Sheets usually do not officially report this number to the public, but with a little research, you can usually find out. It is usually contained in articles written about the company, or in TV or radio interviews with company officials that are sometimes archived on certain websites.

You can also look for the information on message boards or forums where stock traders chat with each other. Simply do a search on Google and read every article ever written about the company, and you will likely find out about their float. This is important because you do not want to invest in a company that already has something like 500 million shares in its float. Companies with this kind of share count are likely having problems moving forward, so they have issued more and more shares to raise money just to stay alive. You want to look for companies that have approximately 5 to 100 million shares in their float.

Other things that you should look for in a new company are barriers to entry, patents, and consumer demand. Here are the questions you need to ask yourself when analyzing the probability that a company will be successful:

1) Barriers to Entry: Are there are obstacles that will make it difficult for the company to sell its products or services?

2) Patents: Is the product that the company is going to sell patented? A patent will prevent other companies from producing the exact same product.

3) Consumer Demand: Will there be a demand for what the company is selling? Sometimes a company has a great new invention or an exciting technology, but if it is not something practical that consumers are going to want or need, then it does not matter how great it is.

Try to set aside some money for investing in penny stocks and start while you are still young. The earlier you get started, the more money you can make in the long run. Just make sure you do your homework before you invest and you should do extremely well. .

Penny Stock Exchanges OTCBB and Pink Sheets

by Christopher Smith
Most people think of the major stock exchanges when trading stocks comes to mind. The New York Stock Exchange (NYSE), the National Association of Securities Dealers Automated Quotations (NASDAQ), and the American Stock Exchange (AMEX) are among those that first come to mind. A penny stock is a low ticket security for companies that are valued at under five hundred million dollars and often trade in low volumes. These stocks also trade on 'Over the Counter' exchanges such as the OTCBB or Pink Sheets.

The very fact that penny stocks trade at such low volumes increases the risks involved in investing in them. The Securities and Exchange Commission urges potential investors in penny stocks to be aware of the fact that the low trading volume of these stocks make it likely that in times of needs buyers will be rare if not impossible to find. Finding accurate quotes for pries is also difficult which increases the possibility of the investor losing his entire investment.

Despite the risks involved, penny stocks are often attractive investments to investors for various reasons. If you are new to investing and looking for the chance to return a high yield for a relatively low investment you are likely to come across some penny stocks. The attraction often lies in the fact that at such low prices any changes are often measured by the hundreds of percent this means that your investment can literally double in one or two days time.

On the other hand, the price of penny stocks can drop just as drastically and equally fast. Those who are inexperienced investors would do well to avoid penny stocks until they have a better understanding of how things work. It is also important to note that because of the relatively low 'worth' of the companies that are often listed on the OCTBB or Pink Sheets they are often considered questionable investments. Some of these companies have such a limited financial history that no accurate determination of their actual value can be made. Many of these companies are either very new or dangerously close to bankruptcy.

There is also a strong potential for fraud with some buyers artificially 'enhancing' or driving the costs by buying large amounts of stocks and raising the perceived value of essentially worthless stocks. Most investors who fall for this loose many when it comes time to sell.

It is important to remember that not all of these companies are frauds and many of them have a great deal of potential. Some are new businesses that are working hard towards their goal of earning a spot on the larger exchanges. Do your research in order to decrease your risks of landing with a declining or dishonest company. Investors are often convinced that one good investment can make them a nice tidy profit. While this is true it is better to invest in a company that is showing slow and steady growth than one you are hoping will sky rocket over night. Take the time and do your research rather than gambling with your investment.

Rising Volume in Penny Stocks

by Rob Rens
Rising volume when prices are falling can come in two flavors. There are volume spikes which typically indicate a short term bottom as those hoping for higher prices bail; and then there are the gradual build up in volume type moves accompanied by gradual but continuing declines in price. These are the sickening moves that happen from time to time where you have a blow off type volume move over a period of days that results in very low prices relative to the general price level and is usually accompanied by a V shaped volume and price spike back in the other direction. The problem is having the patience and the nerve to stick your neck out in such a decline. You have to gradually average in to such a move as the odds of catching the bottom tick are almost nil. You will find these types of plays all over the place during a bear market.

In a bear market, there are stocks that still rise. However, in a bear market, there are times when even the good stocks are pulled down and you find declining prices on average or falling volume. Falling or average volume when prices are falling is usually a sign of strength, not weakness; especially if the stock has generally been in an uptrend prior to the short term down trend.

When a stock exhibits steady volume when prices are steady, then this doesn't really give us anything to go on. It doesn't give us any insight into where prices will necessarily go based on a volume read, but the fact that the price range is narrowing suggests that something will occur soon enough. It is then that we will get both a volume and a price read to determine the sustainability of the next move.

There is a close relationship between price and volume. Although indicators have been built on various volume measures, all indicators have a couple of inherent problems and we continue to feel that it is important to view price and volume as a relationship that says different things about a stock when the general trend is up versus down, versus sideways. In general, rising prices should be accompanied by rising volume for the market and/or stock to be healthy.

Similarly, falling prices should be punctuated with volume spikes and to a lesser degree, rising or steady volume shows a healthy continuation to the downside. Falling volume that is associated with rising prices generally is a red flag warning you to be careful as a healthy correction could be just around the bend.

Average volume on rising prices generally occurs when a stock is turning from down to up or sideways to up or sideways to down. Generally a stock that moves from up to down has large prices drops that is accompanied by large spikes in volume.

If you intend to trade stock, you should only ignore volume at your own peril. It can give you the comfort to stay with a position when times are tough, or to signal that you need to lighten up or get out of a position when things seem fine. Volume recognition is your friend just as is the trend.

Spread Betting - 'Stake A Penny, Win A Pound'

by Andy Richardson
Similar in some respects to the CFD, spread betting can be done on a large number of stocks, and major Stock Indexes such as the FTSE 100 Index, or Dow Jones Index, or the S&P 500 index, etc.

An ideal website to visit, to start learning about spread betting is www.financial-spread-betting.com who offer a very comprehensive quick-learning page on their site.

We start with a few opening basics about spread betting...

Firstly, do not be put off by the word 'bet' which carries for many people, a number of totally unnecessary, negative connotations and preconceptions...

Spread betting is not like traditional betting, where a 'bookmaker' gives you 'odds' and usually ends up taking 100% of your original outlay. Spread betting is, in a nutshell, the offering of a 'middleman' in a cross-trade (very similar to CFDs) between one party (you) and another party (another person like you who takes an opposite view on a stock or index price). To explain further...

For example, if you bet that the FTSE index will go up, then, unlike traditional betting, you are not betting against the dealer, but someone else (another trader just like you who could be on the other side of the planet) who has an opposite view of the market (he or she obviously thinks the FTSE is going to go down, while you judge that it will go up). For every pound won, there is a pound lost (or for every winner there is a loser, as the saying goes) - as in every other stock market transaction...

The spread-bet dealer is therefore simply an intermediary (rather like a broker) between the two parties. He is neutral (there is a tremendous amount of money to be made staying neutral in this business). This is as simple as it gets, and creates a tradable marketplace where the spread bet dealer - a middleman - employs a rather sophisticated computer system which matching the buy/sell orders throughout the trading day (even overnight in some cases).

So, how do spread bets work?

Firstly, you deal through a spread bet-dealer. There are a number of these in the city of London. These spread dealers will send you a full, detailed, easy-to-understand information package which covers just about everything you need to know (including many trading examples and illustrations, etc.) in order to start trading spread bets...

Similar in some respects to 'CFD' trading, you can use spread betting to back both rising and falling markets. It is an ideal instrument (like the CFD) for trading the indexes, which we cover, when the index-trend is down, as well as up.

For instance, with the FTSE index, you can bet anything from ?1 (even 1p from some dealers!) to ?250 per point (ie; ?10, ?20, ?30, etc; up to ?250)... For every point the market moves in your favor (net of the initial spread), you gain that amount, eg; ?10 per point, or ?20 per point.

This now closes on our discussion regarding 'stock' trading. As prescribed, you may utilize our Charting Tools screen, within the Click Volume software, in order to trade individual stocks. Simply click on "Charting-Tools" from the left hand menu, enter any stock symbol (or look it up using our Symbol Lookup button/feature), and hit "DRAW" to view the stock chart and Trend Index below.

Remember again, the Trend Index strategy works best with the large, high volume, liquid [blue-chip] stocks. Below are a list of some of the most popular blue chip stocks...

UK: Abbey National, AstraZeneca, Barclays, BP, BT, CGNU, Diageo, Glaxo Smithkline, GUS, HBOS, HSBC Holdings, Legal & General, Lloyds TSB Group, Marconi, Marks & Spencer, mmO2, Prudential, Royal Bank of Scotland, Sainsbury, Shell, Tesco, Unilever, and Vodafone Group.

USA: American International Group, Amgen, AOL Time Warner, AT&T, Bristol Myers Squibb, Cisco Systems, Citigroup, EMC Corporation, Exxon Mobil, General Electric, Intel Corporation, IBM, JDS Uniphase, Juniper Networks Inc., Merck & Co, Microsoft, Oracle Corporation, Pfizer, Qualcomm, Sun Microsystems, and Wal-Mart Stores Inc.

Note: It is up to you whether you wish to trade stocks, indexes, or both. Our recommendation is that you find the market you like, and ultimately focus on this 100%. On the next page, we return back to our own favorite market of choice - the major indexes...

Sell Your Penny Stocks

by Zach Parker
While some of the gains you may see from the penny stock may not be as generous as the gains seen from an investment with a bigger company. No matter which penny stock company looks favorable to you; keep in mind that they are at high risk because their resources are limited. And for the right price, any penny stock may seem like a painless purchase; it just depends on what you make on the return of the investment. Consensus also dictates how to go about trading in the penny stock investment game when you don't have a lot of experience on your own.

Within a month you may or may not see some money coming in from your penny stocks; however keep in mind you are literally investing pennies. Do a little digging to find the right penny stocks for you, but remember to also find out when is the right time to buy as well. Some of the people who become interested in investing in penny stock feel that they do not really have anything to lose by investing. A few stocks are less correlated with the overall market; this makes it difficult for these stocks to put together an appealing portfolio.

After you have found a few small cap companies that interest you, you may begin investing in their penny stock offerings. After you have established where you can invest in penny stocks, your next task needs to be to decide which ones you would like to try. For the events to unfold as planned, make sure you buy the penny stocks at the appropriate time and do not hold onto them too long after the peak. Being a competent investor does not automatically make you great at investing in penny stocks without past experience in them too. The logical thing to do if you do not know a lot about investing in stock; is to gain all the knowledge you can before investing blindly.

No matter which penny stock company you choose to invest in; you should make sure you do some research on the company first. Being a sure-thing is generally a good sign of a fraudulent investment in penny stocks or any kind of stock market venture. Consensus also can make many penny stock investors choose the wrong option; either going with the crowd or trying to out-smart them. No matter which definition you apply to penny stocks; they will generally be offered by small cap companies who have to be considered high risk. And for the record, penny stock investing can be very lucrative, but it may take even more work to invest properly than the blue chip stocks.

Why You Should Invest In Penny Stocks

by Jim Pretin
Most people consider penny stocks to be a poor investment. I, on the other hand, think that investing in a penny stock before that company becomes profitable company is the best way to invest, because you can make a lot more money with penny stocks than would ever be possible with blue-chip stocks. I will now outline for you what you need to know about penny stocks and how to find the best one in which to invest.

Penny stocks are defined differently depending on who you talk to. Stockbrokers define them as any stock that trades below $5 per share. Regulatory agencies sometimes classify them as a stock with a price below $2. But, generally speaking, a penny stock is any low-priced security that trades on one of two exchanges; the Pink Sheets or the OTC Bulletin Board.

The Pink Sheets are an exchange where most startup companies first get listed. There are no listing requirements to be traded on this exchange. A company does not have to have any sales, nor does it have to reveal how many shares outstanding it has to qualify for the Pink Sheets.

The reason why a company tries to get listed on the Pink Sheets, even though their stock will not go up in price because they have no sales to speak of, is because it gives their company more substance and credibility; it is typically easier to attract additional capital, obtain financing, and execute contracts and agreements if a company is publicly traded, even if it is on the Pink Sheets.

Also, it is easier to get transferred from the Pink Sheets to one of the larger exchanges than it is to go from being a private company to hopping directly on to one of the major exchanges, such as the NASDAQ or NYSE. Companies listed on the Pink Sheets trade as ridiculously low as $0.00001 per share, all the way up to $500 per share and sometimes beyond. Foreign companies often have some of their shares sold in the United States by listing them on the Pink Sheets.

The OTC (Over-The-Counter) Bulletin Board is similar to the Pink Sheets. This exchange consists of relatively young companies either with no sales or a small amount of sales. Companies listed on it are sometimes fully reporting (meaning that they reveal how many shares they have outstanding and what their balance sheet looks like). Often, companies go from the Pink Sheets to the Bulletin Board once they are ready to become fully or semi-reporting.

Most publicly traded companies that are now listed on one of the major exchanges (NASADAQ, AMEX, NYSE), at one time or another, were penny stocks listed on the Pink Sheets or Bulletin Board. Rarely does a company go from being private directly to one of the 3 major exchanges. Google is a rare example of a company that was able to do that, because they were so successful so quickly. But, most companies have to pay their dues and edge their way up from the penny stock exchanges to the bigger ones.

So, investing in penny stocks can be an excellent investment because some of these young companies will one day be worth a fortune. The hard part is finding the right company to invest in, because for every successful startup company, there is also one that fails within the first year or two.

To find the right company, there are a few things you need to look for. Number one, you need to do some research and try to find out how many shares the company has in its float. The float is the number of shares that are currently being traded. Companies listed on the Pink Sheets usually do not officially report this number to the public, but with a little research, you can usually find out. It is usually contained in articles written about the company, or in TV or radio interviews with company officials that are sometimes archived on certain websites.

You can also look for the information on message boards or forums where stock traders chat with each other. Simply do a search on Google and read every article ever written about the company, and you will likely find out about their float. This is important because you do not want to invest in a company that already has something like 500 million shares in its float. Companies with this kind of share count are likely having problems moving forward, so they have issued more and more shares to raise money just to stay alive. You want to look for companies that have approximately 5 to 100 million shares in their float.

Other things that you should look for in a new company are barriers to entry, patents, and consumer demand. Here are the questions you need to ask yourself when analyzing the probability that a company will be successful:

1) Barriers to Entry: Are there are obstacles that will make it difficult for the company to sell its products or services?

2) Patents: Is the product that the company is going to sell patented? A patent will prevent other companies from producing the exact same product.

3) Consumer Demand: Will there be a demand for what the company is selling? Sometimes a company has a great new invention or an exciting technology, but if it is not something practical that consumers are going to want or need, then it does not matter how great it is.

Try to set aside some money for investing in penny stocks and start while you are still young. The earlier you get started, the more money you can make in the long run. Just make sure you do your homework before you invest and you should do extremely well.

Taking Penny Stock Risks

by Christopher Smith
The term penny stocks generally refers to any stocks that trade outside the major stock exchanges and is taken as 'deprecatory'. The major stock exchanges would include: NASDAQ, AMEX, or NYSE. The term Penny stock is also often used interchangeably with small caps and nano caps. The title of penny stock however should be determined by the share price rather than the listing service or market capitalization.

Penny stocks often have market caps lower than $500 million. This makes it highly speculative for those who trade low volumes 'over the counter'. Some believe that penny stocks are difficult to sell once purchased because of the difficulty in locating quotes on particular penny stocks. Investors in these stocks are expected to understand that the loss of their entire investment is a viable risk.

Despite the risks involved, penny stocks are attractive to new investors because of the low initial price and the possibility of quick payouts of up to 100 percent in some circumstances. Just as there is the potential of high profits, that potential comes with the risk of substantial losses.

Penny stocks are considered high-risk investments. As a result investors should be aware that these stocks have a limited amount of liquidity and fraud in addition to a lack of financial reporting.

Penny stocks have fewer shareholders. This makes them less liquid than stocks of larger companies. It also means that it will buy and sell less shares. The fact that less shares are traded generally results in unpredictable stock prices. This can either make the prices rise sharply or suddenly decline. The lack of liquidity within this market leaves it wide open to exploitations by market makers, management, and other parties.

These stocks can also be difficult to sell quickly as some days there simply are no buyers.

Another reason for this lack of liquidity is the minimal listing requirements for smaller market listings as compared to NASDAQ or NYSE. Companies that have fallen below requirements for the larger exchanges have the opportunity to get listed on the OTCBB or Pink Sheets.

If you are comparing Pink Sheets to the major exchanges you might want to take note of the fact that Pink Sheets have very few regulatory requirements for those being listed. In other words, there is little protection in place for shareholders by way of accounting standards, notifications of ownerships of shares, etc.

These things combined make penny stocks very attractive tools for fraud. This does not at all mean that all stocks listed on the OTCBB are untrustworthy, it simply means that you should keep your eyes open when making deals on this market

Penny Stocks Can Be Lucrative

by Jim Pretin
Most people consider penny stocks to be a poor investment. I, on the other hand, think that investing in a penny stock before that company becomes profitable company is the best way to invest, because you can make a lot more money with penny stocks than would ever be possible with blue-chip stocks. I will now outline for you what you need to know about penny stocks and how to find the best one in which to invest.

Penny stocks are defined differently depending on who you talk to. Stockbrokers define them as any stock that trades below $5 per share. Regulatory agencies sometimes classify them as a stock with a price below $2. But, generally speaking, a penny stock is any low-priced security that trades on one of two exchanges; the Pink Sheets or the OTC Bulletin Board.

The Pink Sheets are an exchange where most startup companies first get listed. There are no listing requirements to be traded on this exchange. A company does not have to have any sales, nor does it have to reveal how many shares outstanding it has to qualify for the Pink Sheets.

The reason why a company tries to get listed on the Pink Sheets, even though their stock will not go up in price because they have no sales to speak of, is because it gives their company more substance and credibility; it is typically easier to attract additional capital, obtain financing, and execute contracts and agreements if a company is publicly traded, even if it is on the Pink Sheets.

Also, it is easier to get transferred from the Pink Sheets to one of the larger exchanges than it is to go from being a private company to hopping directly on to one of the major exchanges, such as the NASDAQ or NYSE. Companies listed on the Pink Sheets trade as ridiculously low as $0.00001 per share, all the way up to $500 per share and sometimes beyond. Foreign companies often have some of their shares sold in the United States by listing them on the Pink Sheets.

The OTC (Over-The-Counter) Bulletin Board is similar to the Pink Sheets. This exchange consists of relatively young companies either with no sales or a small amount of sales. Companies listed on it are sometimes fully reporting (meaning that they reveal how many shares they have outstanding and what their balance sheet looks like). Often, companies go from the Pink Sheets to the Bulletin Board once they are ready to become fully or semi-reporting.

Most publicly traded companies that are now listed on one of the major exchanges (NASADAQ, AMEX, NYSE), at one time or another, were penny stocks listed on the Pink Sheets or Bulletin Board. Rarely does a company go from being private directly to one of the 3 major exchanges. Google is a rare example of a company that was able to do that, because they were so successful so quickly. But, most companies have to pay their dues and edge their way up from the penny stock exchanges to the bigger ones.

So, investing in penny stocks can be an excellent investment because some of these young companies will one day be worth a fortune. The hard part is finding the right company to invest in, because for every successful startup company, there is also one that fails within the first year or two.

To find the right company, there are a few things you need to look for. Number one, you need to do some research and try to find out how many shares the company has in its float. The float is the number of shares that are currently being traded. Companies listed on the Pink Sheets usually do not officially report this number to the public, but with a little research, you can usually find out. It is usually contained in articles written about the company, or in TV or radio interviews with company officials that are sometimes archived on certain websites.

You can also look for the information on message boards or forums where stock traders chat with each other. Simply do a search on Google and read every article ever written about the company, and you will likely find out about their float. This is important because you do not want to invest in a company that already has something like 500 million shares in its float. Companies with this kind of share count are likely having problems moving forward, so they have issued more and more shares to raise money just to stay alive. You want to look for companies that have approximately 5 to 100 million shares in their float.

Other things that you should look for in a new company are barriers to entry, patents, and consumer demand. Here are the questions you need to ask yourself when analyzing the probability that a company will be successful:

1) Barriers to Entry: Are there are obstacles that will make it difficult for the company to sell its products or services?

2) Patents: Is the product that the company is going to sell patented? A patent will prevent other companies from producing the exact same product.

3) Consumer Demand: Will there be a demand for what the company is selling? Sometimes a company has a great new invention or an exciting technology, but if it is not something practical that consumers are going to want or need, then it does not matter how great it is.

Try to set aside some money for investing in penny stocks and start while you are still young. The earlier you get started, the more money you can make in the long run. Just make sure you do your homework before you invest and you should do extremely well.

Penny Stocks and the Investments

by Martin Lukac
Recently, investors commence sharing in the penny stocks. This action occurred especially after investors began to realize that they had the ability to invest chump change in a selection of companies. In short, investors could invest a few pennies or dollars in small companies around the United States. Since Forex and the stock market exchange industry has higher risks many newcomers to the stock market will invest in penny stocks.

Penny stocks allow investors to put up five bucks and potentially win $25. If the investors lost their money, so what, it was only a few pennies or dollars.

For the most part, it is simple to invest in penny stocks. Investors must open broker accounts online to get started. These accounts are compared to bank accounts. Brokers will charge small fees, which is subtracted from the account each time a holder invests in the stocks. These fees will cover basic account duties that the broker tends to.

Brokers do not give advice. These people invest in stock markets themselves. To get advice the investors must pay nominal fees for stock newsletters. The freebies will mislead investors, so experienced investors will avoid these offers. Most of the freebies will also direct investors' right into scammer hands.

Paid newsletters are regulated by the law. You pay a few pennies to get the information. This is a great option if you intend to invest in penny stocks.

To find a broker visit the Internet. You will find quality services and other offers to help you learn about penny stocks. Read the paid newsletters so that you know what you are getting into. NEVER step in to stock market without being informed.

You will find plenty of stock articles online too. Use the articles as your guide to learn about stock markets. Be careful since some articles may mislead you just as the free newsletters will. Make sure you search for articles that include facts and evident links to verify statements, recommendations, et cetera.

When you are informed, you get the most of your stock experiences. If you are new to the stock market, start with the penny stocks first and then move to other types of stock marketing.

Forex stock market, (Foreign Stock Market Exchange) exchange and stock markets often request that you invest a large amount of cash to get started. Learn the ropes by starting out small and then moving to larger investments in stock markets after you feel confident that you know what you are doing.

Penny Stock Trading - Is Penny Stock Trading Right For You?

by John Triggerman
How do you decide when the time is right to invest in the stock market and how do you choose which stocks to invest in? Even if you are thinking of beginning with penny stock trading, these are two very important questions that need to be answered before investing any of your hard earned money. Each and every day people are getting rich off the stock market and penny stock trading, a dream almost everyone has. However, that doesn't necessarily mean it will happen to you.

At one time penny stocks were traded for less than a dollar per share. The Securities and Exchange Commission (SEC) has since modified the definition of what a penny stock is to include all the shares that trade below five dollars. Stocks that are traded for more than a dollar are being considered penny stocks because they are very much perceived the same way that the penny stocks under a dollar used to be; risky investments.

Penny stocks are growing companies with limited resources and money. It is for this reason that penny stock trading is looked at as a high risk investment that consists of low trading volumes and garners little to no attention from investors, since these stocks are rarely found on the Nasdaq and NYSE.

Before jumping with both feet into penny stock trading, you have to consider whether this is your time. Are you emotionally ready for the ups and downs the stock market brings? You can't get involved and only think you are going to make money. You have to look at it in terms of how much money you can afford to lose. If your answer to that is you cannot afford to lose any money, then penny stock trading at present time is not for you.

There are no guarantees any stock you buy will make you money, even if you focus solely on penny stocks. Do your research, subscribe to penny stock trading websites and arm yourself with knowledge, so that when it is the right time for you to start trading you will know exactly what to do and what you are getting involved in.

If you have decided that yes, now is the time to immerse yourself in penny stock trading, deciding which penny stocks to buy is the next step. There are a couple of penny stock subscription based websites available to you. A knowledgeable penny stock analyst will send on a regular basis, emails with the latest tips on which stock to buy at what price and at what price you should sell it. Like any type of investments, you won't see results overnight but with some patience, perseverance and a few good stock tips you may just find yourself like many others have in the past; laughing all the way to the bank.

Penny Stock Fortune, Are You Ready To Make Yours?

by John Triggerman
There is no set formula on how to make a fortune in the stock market. If there was, there wouldn't be a need for all the how-to-books and the multitude of websites full of information on how to make a penny stock fortune. Can it be done? Can you make a fortune off just penny stocks?

It is possible that buying and selling penny stocks can make you a fortune, if you know the proper way to do it. It takes a lot of experience, mixed with a bit of skill, but it does happen. The biggest mistake people make is not researching and getting a good grasp of what penny stock trading is before they start. Going this route will have you losing money instead of making that penny stock fortune. Nothing good ever happens when your careless.

One thing that entices people to try their hand at penny stocks is the high return on their investment. Just think about it. If you purchase a stock at $0.31, sit back, watch it rise and sell at $1.09; that is a 251% increase. There are, on record, stocks that have increased by over 400% in a very short amount of time. Think of the possibilities if you spread your allotted penny stock money among many stocks. With returns of 200% and upwards of 400%, your penny stock fortune may not be as far in the distant future as you think.

The reason you won't find many penny stocks on Wall Street is because Wall Street doesn't talk about or even think about companies that haven't already proven themselves with large gains. If you get your advice from Wall Street you may be looking at a return of 3-5% a year. If you're happy with that small of a return, great; but if you are looking for more, then why not try making your fortune through penny stocks.

When you are ready to begin working towards your penny stock fortune then it's time to search for those penny stock guru's; the guys who do nothing but study penny stocks and email their picks to their subscribers, people like you and me. You won't know if you can make a penny stock fortune unless you try, and it's ok to be cautious, it's actually a good thing. Don't throw all your eggs in one basket so to speak. Start small, and gradually grow your portfolio. You won't make your penny stock fortune overnight, but you can make it over time.

Penny Stock Investor Information: The Penny Stock Information Required To Become a Trader

by John Triggerman
Have you thought about what your future will bring, whether or not you will have a sufficient amount of money to retire on? With the decrease in pensions, people are looking to other markets to help secure their future, the stock market. If you want a high return in a short time, invest in penny stocks. There are many places online where you will find penny stock investor information. Securing your future through penny stocks is not an unreachable goal, knowledge is the key. So arm yourself with it; information investor penny stock.

Where do you look for the penny stock investor information you need before you get started? There are many informational websites with useful information on the pros and cons of penny stock investing. If you are unsure or don't understand what you are reading, talk to your broker. It is their job so they should have the information investors need regarding penny stocks.

It is hard to find information on the majority of penny stock companies. Which is why there are so many investors that look at penny stocks as a sure fire way of losing money. Perhaps they don't view penny stocks as some do, which is a great way for high returns, or maybe they haven't taken the time to find good informative penny stock investor information. That may be true in their experience, however; there are numerous accounts of people who have gotten rich off of penny stocks. Perhaps they found and subscribed to a great website that offered useful penny stock investor information.

Another reason why you should arm yourself with penny stock investor information before investing is because of fraud. There have been many cases when a company has released false information about their finances and encouraged others to invest. Once people start to invest the "fraudsters" start selling off their shares and the stock collapses. Enron is the perfect example of this exact thing. The employees who wanted to sell their stocks were talked out of it by people they trusted. The outcome was that the investors ended up losing everything. Don't let this happen to you. Penny stock investor information is the key.

Don't be afraid to research and ask questions then research some more. There are an abundance of websites with great penny stock investor information just waiting for you to read through.