What New Penny Stock Traders Should Know in 2018

What New Penny Stock Traders Should Know in 2018

If you’ve made it your mission to expand how you invest, or to try your hand at penny stocks in 2018, it’s a good idea to start getting prepared now. Trading penny stocks can be rewarding, but of course, it’s full of plenty of challenges as well.

The following provides an overview of what you should know if you’re hoping to become a penny stock pro heading into the new year.

Try out these penny stock trading tips in 2018.

Don’t Buy the Hype

No matter what you hear, or who tells you otherwise, the vast majority of penny stock companies aren’t going to succeed, and that’s something that’s important to understand as you go into it. If penny stock companies were big name successful companies, they wouldn’t be traded as penny stocks.

The companies more often than not aren’t great, but at the same time that doesn’t mean that you can’t turn that into profitability. You just have to understand the reality from the start.

Keep Trades Small

There’s something else to understand when it comes to trading penny stocks, and that’s the fact that it is possible to have big profits with one trade, but not extremely likely. There’s a lot of chance and a lot of risks that come with penny stocks, so it’s essential that you are smart with how you play it.

It’s better to learn the fundamentals and know when it’s right to get in or out and do so with smaller trades than to risk and lose everything. A lot of the best penny stock traders look at it as a game, but if you put everything on the line, a loss goes well beyond being part of the game.

Be Familiar with Risk

It’s okay to invest in something that’s full of risk, and that’s often how you’re going to make the most money, but be familiar with the risk. Don’t necessarily back away from risk, but just know that there is going to be some level of discomfort involved with this kind of trading.

As long as you don’t commit too much to one trade, you’re likely going to be able to take the risk in stride as you learn about penny stocks.

You also want to make sure that you’re giving yourself the opportunity to get in or out as needed.

Keep a Journal

Finally, some of the best penny stock experts recommend keeping a journal so that you can write down what you’re doing, and you can record your profits and losses. This is a great way to learn more about penny stocks in general, but also how you are as a trader. You can look back and learn important lessons as you grow and work on building your profitability in the volatile world of penny stocks.

You can’t trade penny stocks based on whims or emotions. They have to be backed by information and insight, and the insight you can gain from journaling your own experiences.

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