Investing in penny stock is not a difficult task but finding a good penny stock that will fetch good returns on your investment needs time and knowledge. There are numerous good penny stocks available to choose from and a thousand new Singapore penny stocks are listed everyday so finding good penny stocks for investment can be an overwhelming process. So here is a complete guide that will help you in understanding how to pick and find good Singapore penny stocks to buy.
What is a Penny Stock?
A penny stock is considered as a non-traditional stock that is traded over major exchanges for less than $5 per share. You will find penny stock in the pink sheets as well as in electronic format i.e. at an over-the-counter-bulletin board. And you can trade them in a similar manner as you trade any other stock from your trading account.
How to find a good Singapore penny stocks to buy?
Once you have decided to invest your money in penny stocks Singapore then the next step is to find good Singapore penny stocks to buy so here are few tips that will help you find potential good penny stocks.
1 Research the Company
One of the best things to do before investing in penny stocks Singapore is to research the company. Researching the company will help you gain certain information to determine whether the penny stock is worth a buy or not. For example, if you are not able to find any information about the company online then this might be a warning.
No doubt, you will take the ultimate decision, but researching about the company shall prove beneficial. Giving a quick Google search like ‘best penny stocks Singapore 2018’ will quickly give you access to information of your potential penny stock company.
2. Underlying Business
While trading Singapore penny stocks one of the things that you need to look out is the underlying business of the company. The underlying business of a company will help you to understand whether the penny stocks are sustainable stocks or not. So if you want to deal in best penny stocks Singapore 2019 then look for companies that have a sustainable business.
3 Coping with the Volatility
One of the most interesting things associated with Singapore penny stocks is its volatility. Understanding the Singapore penny stock price volatility is an important benchmark while trading them. While dealing in penny stock look for penny stocks that are moving up or down.
Dealing with not moving penny stocks is not a good proposition as you cannot take the position as there are few buyers and sellers and the worst case scenario being you might face trouble in selling off your penny stocks. An indicator of a good penny stock is its every changing market position. A little action can potentially lead you ahead.
4 Importance of Value
For trading a good Singapore penny stock, volatility is not the only factor to look for but it is also important to look at the volume of Singapore penny stocks to buy. Ignoring the volume can be the common error that all new traders make that can cost you in losing your money. While choosing a good penny stocks focus on its liquidity.
As a trader, it is important to understand that if the penny stock is not offering much volume and movement then it might not be an enticing proposition. A good amount of movement gives you a more accurate understanding of a good penny stock. To sum it, while selling high volumes of good Singapore penny stock you would find a buyer easily and potentially if you want, you might be able to take a large position.
5 Catalyst Events
Catalyst events are the events or releases that affect the prices of penny stocks. Penny Stocks are heavily affected by such catalyst events. For example: if a company announces the launch of a new product then potentially this announcement could impact the value of the stock. So traders are expected to scout for such catalyst events and make the most by investing in such penny stocks.
6 Understanding the patterns
Gaining knowledge and understanding the Singapore penny stock chart patterns. These patterns are easy to read that help to spot the risk point and defines where you are going wrong and when it is the right time to get out.
For purchasing good penny stocks it is important to take a close look at the financial documents of the company. Penny stocks are offered by smaller companies so it is important to look at the company’s healthy financials as it will help in buying good penny stocks Singapore.
8 Financial condition
While deciding your preferred Singapore penny stocks keep a close eye on the debt of the company. Buying Singapore penny stock of a company that has a lot of debt is a bad proposition. Choosing a good penny stock means choosing a company that is not entrapped in debt.
9 Liquidity Ratio
While choosing the best Singapore penny stocks to find penny stocks that have favorable liquidity ratio. Investing in a penny stock that has a good liquidity ratio is a good buy.
10 Trading Time
The trading of best Singapore penny stocks depend on the time of day. Many penny stocks behave differently at the different time of the day i.e. they make good in the morning but might not behave same towards the end of the market end. Thus while choosing Singapore penny stocks to buy understand how the preferred penny stock is behaving at that particular time of the day and then make the buy.
Thus above pointers will help you in learning how to pick good penny stocks accurately. For understanding which Singapore penny stocks to buy start doing lots of research work. Over time with experience, you will understand how to pick and find good penny stock offering companies.
Usually, opt Singapore penny stocks of companies that offer- high volume of good penny stocks for trade, show volatility i.e. upward or downward movement in prices or speculate a catalyst event that will change the prices of penny stocks.