Trading in Penny stocks is convenient for the investors who are easy in speculating the stock market with high risks. The penny stock traders involve over-the-counter market via pink sheets & OTCBB (an electronic trading service).
Due to poor reporting standards & low liquidity, penny stocks are afflicted by the high risk factors. In order to trade penny stocks, here are some stock trading rules shared:
1-Being a newbie in SGX stock trading, if you are up in your trading & suddenly experience a downfall; then just selling out the stocks is the best stock picks to make the profit potential. In addition, you can repurchase the stock once it consolidates.
2-It’s recommended to be aware about the company where you have invested your capital. Knowing financial terminologies, up gradations, down gradations would assist you to predict stock price movements.
3-Placing a stop order is another stock signal to remain at safer side in trading. The most beneficial aspect is to repurchase the stocks at the time of uptrend.
4-Being a newbie in stock trading, avoid holding penny stocks for the long term is profitable stock trading picks to follow. Rather than holding a stock for long term, sell the stocks instantly within a short period of time. After getting good experience, it’s good to hold the penny stocks for long time.
5-Analyze the market value of the company you are investing in with its financial statements & avoid buying overvalued stocks.
Penny stocks are risky to trade, therefore it’s recommended to be mindful while trading in penny. If traded strategically by knowing your own potential, it’s profitable to trade in penny stocks.