Hot Penny Stocks - A Beginner's Guide to Making Profits

By C. Limpert

If you are planning to invest in hot penny stocks then you need to buy the shares which can give you a significant profit margin quickly. Penny trading is considered very risky for the investment but at the same time it can be a very profitable investment if you play your cards right.



Generally the companies who are very new to the market offer these types of shares for the investors. The prices are generally below $5 and the market cap for these companies are usually below $200 million. If you really know how to invest wisely then you can become a very profitable trader by trading the best penny stocks. Read further to discover how to select the most profitable picks and manage your chances of loss.

Ability to select good stocks: Hot penny shares are the ones which are rapidly rising in terms of prices in the market at any given time. These shares are highly volatile in nature. This simply means that the base price for these shares can quickly go either up or down depending upon the market trends. You need to know which are the best penny picks at that particular time and you need to be able to weed out the losers.

The way to profit with these hot penny stocks is to buy low in the beginning and sell high when the shares are on the rise. Here are some tips to help you find profitable penny stock picks:

If you want to play safe in the beginning then you can start with a simple demo account. Select a particular company shares which has profit potential. Play with it for at least 2-3 months and watch the price changes for that particular company stocks. By keeping continuous watch on a particular stock, you will realize whether it is a profitable share or not. Then you can begin your actual investment.

One more simple idea to make reasonable profits from penny trading is to sell 50% shares when their price is doubled and sell other 50% when the price drops by 25% of its recent high price. This way you can definitely save yourself from a potential loss.

Tracking these investments is not easy as these companies are not typically covered well in the news. To assist in your identification efforts, sign up to free newsletters that provide penny stock alerts to narrow down the population of hot penny stocks for you to follow.

Do you want to get hot penny stocks sent to you for FREE? CLICK HERE To Get Start Receiving Free Penny Stock Alerts!