Rabu, 16 September 2009

The Secret to Making Money With Penny Stocks

By Charles Carmichael

To begin making money with penny stocks, you need to understand that success in this highly volatile financial field requires the same thing any industry requires to succeed: hard work. If you're looking for quick riches, be prepared for disappointment.

You really can make money with penny stocks. With our modern laws and modern online capabilities, anyone can execute both the research and the actual trades from the comfort of their own home. There is a ton of information out there in the form of penny stock listings on the Pink OTC Market (Pink Sheets), the OTCBB (Over-the-Counter Bulletin Board), fantastic research tools on the sites of reputable online stock brokers (Fidelity, Charles Schwab, TDAmeritrade, ShareBuilder, E*Trade and others).

There are even applications that help you paper trade so you can practice trading without plunking down your cold hard cash and putting you neck on the line. Making money with penny stocks is all about research, practice and discipline.

The key is you have to fully utilize all these great services and tools to really do your due diligence. The moment you start feeling impatient or you start treating this like a get-rich-quick scheme, you begin down the road of failure and potentially even financial ruin. This is serious business; this is not a game.

In fact, penny stock trading is actually more risky and more expensive than regular stock trading. Most penny stocks (also referred to as micro cap stocks or nano cap stocks) are not traded on the major stock exchanges (like NASDAQ or the NYSE). Instead they're traded on the Pink Sheets and the OTCBB. While these quotation services are evolving and trying to curb fraud when they can, most stocks listed there are still not required to file with the SEC (Securities and Exchange Commission).

The SEC has been combating micro cap fraud for several decades, and with online trading their job has just become more difficult. Literally billions of dollars of penny stock fraud occurs every year, and most of that money comes from savvy, unethical brokers exploiting naive new investors looking into making money with penny stocks.

So in addition to learning how to leverage the tools and services I've described here, you need to research and steel yourself for fraud schemes like the pump and dump and the chop stock. Making money with penny stocks is as much about avoiding risk and fraud as it is finding those lucrative nano cap stocks.

To learn everything you need to know to truly succeed with penny stocks, visit my comprehensive no-hype and no-sales website: Making Money With Penny Stocks


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