Trading penny stocks sounds perfect doesn’t it. Cheap stocks. Massive returns. Small capital spend...well it all sounds a bit too good to be true doesn’t it? At least all those selling you on the idea tends to paint only the bright side.
The truth is those hot penny stocks is that trading them is not easy. Yes, the potential is massive but if you don’t know what you are doing you can burn your fingers and wipe out your trading account much faster any other investment.
I would know.
I jumped into penny stock head first. Not really knowing what I was doing. All I could see was dollar signs. Huge returns and turning my measly $5,000 start-up capital into a million by Christmas. I guess if you are stuck in a day job you hate, the mere prospect of living the traders life is enough to get you excited.
Trading Penny Stocks – The “Perfect” Trading Opportunity?
Trading on the NYSE and NASDAQ sure has a huge advantage. Not only do you get very strict regulations protecting your investment, but for stocks to be listed there they have to be a good investment.
The problem with trading on the major exchanges is simply that it’s EXPENSIVE. If you don’t have at least $20,000 in your back pocket you probably won’t make it.
With penny stocks on the other hand, you can get started with pennies!
1. The stocks are dirt cheap. Anything between 10 cents and $2. This gives YOU buying power – even if you have only a couple of thousand dollars to trade.
2. Massive returns. A good gain for a blue chip stocks would be 20%. With penny stocks however, the gains can be as high as 1000% simply because of the nature of these stocks. They are speculative companies and when these companies get noticed, they explode.
With penny stocks your 10 cent stock can easily become a $10 stock that can net you some pretty good money without too much effort. My first real successful penny stock trade, the 18c stock shot up to $2.36 in less than 24 hours. Take it from me, that is an awesome feeling and I found it kind of addictive to be honest.
The Biggest Problem With Penny Stock Investing...
Losing ALL Your Investment Overnight
I wish someone told me about this before I blindly jumped into penny stocks. See, unlike the major exchanges, penny stocks are a lot less regulated and it’s not uncommon for penny stock companies to disappear overnight.
This means that your entire investment can disappear completely and you will never see that money again.
While bluechip stocks almost ALWAYS gain back their value, penny stocks can be very risky. When looking for penny stock picks you need to get smart and learn exactly how to spot that hot penny stock.
The only people who lose money trading penny stocks are the ones who don’t know how to pick the right ones. By following some very simple rules, you can eliminate at least 50% of the risk.
The Best Of Both Worlds – Massive Returns Without Massive Risk?
When it comes to investing the first thing you will learn is that risk and reward always goes hand in hand. As a general rule, the higher the risk the higher the reward.
Since penny stocks offer us great rewards, it’s obvious that there is great risk.
The secret to making a lot of money trading penny stocks then is to eliminate as much risk as possible, without losing out on the potential rewards.
In his Microcap Millionaires newsletter, penny stocks expert Matt Morris explains that finding those great penny stocks is all about knowing where to look. Most people trade penny stocks using their “logic” and that’s why they lose money.
Matt’s been known to make some of the most profitable penny stock picks and over the last 3 years he’s taught thousands of complete novice traders to become hugely successful trading penny stocks
Which Penny Stock Should I Trade?
Finding Those Hot Penny Stocks...
Anyone who's ever lost money trading penny stocks will tell you how tough it is to find those gems. Yet, some traders seem to find them all the time.
What do they know that I don't?
What I learned is that the real experts do some very counter intuitive things when they pick penny stocks. There definitely is a formula, but it's NOT a simple one and it's one that requires experience.
You need to know exactly what to look for otherwise you will never find it.
Duh!
Wake Up Call – You Don’t Need To Be An Expert To Trade Penny Stocks
I don’t know about you, but I do consider myself to be a reasonable intelligent person. When I started losing trade after trade I got extremely discouraged – almost embarrassed. I felt like a complete loser. Losing my life savings and watching my small trading account shrink even further was a real blow to my self esteem.
Only after swallowing my pride and joining Matt’s site did I discover the real “secret” to being successful at penny stock investing.
Here's the great secret (drum roll...):
You don’t have to be the expert to get the expertise you need.
See, some of the richest investors in the world can’t even make a trade to save their own lives.
What they do well though is to hitch a piggyback ride from those who DO KNOW.
For the longest time I was trying to figure it out on my own. It’s kind of ridiculous if you think about it now.
Why figure it out if someone else already did?
The Secret To Penny Stock Success – Learn From Those Who Know!
If you are going to go it alone trading penny stocks you will most probably learn the hard way. Just like I did. Trading is a team sport. You need to surround yourself with smart people that know what they are doing. In this game, learning the hard way is going to cost you money.
Since I started learning from experts like Matt, my trading life has transformed. Not only does he make excellent stock picks, but he tells you exactly when to buy and when to sell. His tele-seminars are priceless and seeing how a true expert picks them and why is something that most aspiring traders will probably never learn.
Matt’s Microcap Millionaires program is not free, but if you are serious penny stock trading then having someone to coach you and pick the best stocks for you is a no-brainer (click here to learn more about joining his program).
Matt’s style of teaching is probably not perfect for everyone, but the lesson is this:
Get all the help you can.
Don’t try and figure it out by yourself. Learn from real experts and don’t let your own pride and ego get in the way of you making money and having the traders lifestyle. In the end it's all worth it. Living the traders lifestyle is as liberating as it promised to be. Stop working hard for your money and let your money work hard for you instead.
Good luck!
