To put it simply, penny stock trading strategies are the methods you use to manage and grow your money invested in penny stocks. Penny stock trading includes all the same aspects of financial planning, investment management (and growth) and, most importantly, wealth protection. Financial planning is the first step in implementing penny stock trading strategies.
Make a list of all your income sources. This includes the income from your job or business, any rental income, dividend and interest incomes, and any steady stream of income from any other sources. From the total income, a portion will obviously be required for your fixed monthly expenses and obligations, such as rent or mortgage, living expenses, loan installments, bills etc. The remaining portion, or the invest-able surplus, is what you will use to develop your penny stock trading strategies and build your wealth.
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By this point, you should also take the time to write down your financial goals or the reason(s) for designing a penny stock trading, wealth building strategy. These goals could range from your retirement to buying a new car, from your children’s education to buying a boat, from buying a new house to taking a European holiday on the French Riviera. The penny stock trading strategies you employ will ultimately determine the returns you will eventually get.
Penny Stock Trading – Achieve Your Financial Goals
There are many options available for making your penny stock trades, and which one(s) you choose will depend upon how much risk you are willing to assume (your risk appetite). Penny stock investment avenues range from the OTC exchange where the risk is high, to the Nasdaq, NYSE and NYSE Amex exchanges where the risk is somewhat lower.
Generally, the higher the risk, the higher the expected return. It is advisable when designing your penny stock trading strategy to invest in a mix of high risk and low risk securities on various exchanges. This minimizes your risk exposure to a single stock and reduces your chances of losing all of your money.
While speculating the stock market may occasionally fetch enormous returns, it is always recommended to invest in penny stocks that you have received some form of information on that you have had the opportunity to research on your own. AimHighProfits offers such an alert notification newsletter which is always sent out either the evening before or a few hours before the market opens. This leads to higher returns as well as a dependable service to give you penny stock trading ideas regularly.
Other penny stock alert options may send you an alert at the opening bell which gives you no chance to research the stock and exposes you to an enormous amount of risk simply trading the opening momentum which, coincidentally, is always heavy and positive.
Wealth Protection – Securing Your Profits
Apart from following penny stock trading strategies, it is extremely important to ensure that profits are not just on paper. Wealth protection when penny stock trading involves, among other things, selling a stock before it peaks to secure your profits. Certain penny stock traders will limit their profit to 10% and their losses to 5% based on an investment of $10,000. Others will limit their profit to 20% and their losses to 10% based on an investment of $1,000. A combination of the two can be developed or even a platform sales technique where each time a penny stock reaches a certain level, you sell off a portion of your investment securing profit as it increases but still providing an opportunity to see more profits.
Penny stock trading with your retirement savings plans and/or pension plan is not the safest use of funds for these types of investments. There are no guaranteed returns in penny stock trading. Therefore, the funds in a retirement savings or pension plan are best left for safer types of investments which offer a guaranteed rate of return at the end of the term of the investment.
Balancing your penny stock trading strategies between capital appreciation and asset protection is the smartest choice to becoming a millionaire trading penny stocks.Share