subject: Penny Stocks: Online Buying And Selling [print this page] Although, you may know that trading with penny stocks can be very, very profitable, yet you do not know where to start from. So, here I give you a quick 5-step guide to help you trade these stocks online. It is not as difficult as it seems and anybody can do it.
For getting setup for online stocks trading, one must follow the 5 basic steps and they are as follows:
1. Creation of Stock broker account:
The first thing you need to do is to find a broker, of these stocks, meeting your requirements and setup an account with him. I would highly recommend you to go with a well known stocker, if you are just starting, and trade with penny stocks that are in $1-$5 range.
2. Stock Broker Account Funding
Youll need to fund it, once your account is created through an application. Usually, there are various ways for doing this. You could either send a check or use bank wires for payment. You should always send a small amount, if you are not sure of the stock broker, because you can always add more, later on.
3. Selecting the right kind of Penny Stocks
After getting the account setup and funded, you are now technically ready to trade. Because the companies arent usually as known, in case of these stocks, it is more difficult. In case as this I would pick out an industry or function and start looking for these stocks. In addition to all these, you can monitor stock news, press releases and picks at various these stocks sites and forums.
4. Making Penny Stock Research
Its now time to research potential trades after once you have some of these stocks you like. I would recommend putting the stocks you want to follow in the tracking mechanism because, usually, your account will have the ability to track stocks.
5. Trading with Penny Stocks
Its time to execute a trade after you hold a stock you like. If you put in a market order then you will be paying whatever the ASK price may be. You must always use limit orders. You can let the stock go by putting the price you want the stock at.
You will own shares of the stock after your trade is executed and its now time to monitor the stock often. As a rule of thumb, you should keep an exit price in your mind before buying any stock, so that you can earn a sale the moment the stock hits your price.
