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Five Penny Stock Tips for Beginners

I don’t speak without experience when it comes to penny stocks. While others out there may very well have some experience, there are only a few of us that have been around penny stocks as long and as successfully as I have. I always share about the same thing for beginners that want to try to learn how to successfully trade penny stocks.  I have always found it comes to these five things:

Penny Stock Tip One: If you cannot make a profit on paper before you ever start with real money, you will never profit using real money.

Was that one clear enough? If you cannot make “pretend money” trading in a practice account, you are sure to fail when it comes to real money. The funny thing is that making money on the “pretend trading sites” actually does NOT even guarantee you will make money for real. That said, if you cannot make it even in a pretend environment you are sure to fail with real money.
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Penny Stock Tip Two: Use money you expect to lose.

If you expect to lose the money you put into your initial penny stock trading, you are protecting yourself from using money you need. Of course you should never invest money in anything you cannot lose. If you cannot lose it, do use it.
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Penny Stock Tip Three: Call the penny stock companies by phone. If they don’t answer, set them free and don’t buy them.

If you cannot get a company to answer, chances are they are either fake or so tiny they are not worth your effort. There are so many fake companies (or nearly fake) on the OTC markets. There are others that are just incompetent.  You have to weed them out.
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Penny Stock Tip Four:  Never fall in love with a penny stock. They are fools gold at best.

You cannot possibly know a company by a cool ticker. Don’t fall in love with a stock. Even if you actually got the CEO and he gave you that warm and fuzzy feeling you got on your first date with that cheerleader from high school. The CEO will never tell you terrible things. He may tell you nothing. If he tells you too much, watch out even more. Love and romance have no place in the market, unless your broker is a highly attractive woman with a great voice.
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Penny Stock Tip Five: Take the F’ing Profit if You EVER, EVER Have One!

I have heard this a thousand times: “I was up 50% just two days ago.  Now I lost all of my gain. I guess I should hold it for another week.”   If you have a decent profit, sell the damn thing. Get rid of it. Likely you can buy it cheap in just a couple of days!

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