[Penny Stock] Small cap stocks: A simple 7 stage strategy Article through Jonathan SavageFirstly just what Penny Stock? The Security Trade Commission (SEC) defines anything stock as something with price below $ 5. They are stocks that tend to be by there character more risky. They are thinly listed and may move down and up fast. These aren't your blue chip stocks that you simply invest in and dont take a look at a again with regard to another year. They are stocks to end up being traded! The upside obviously is that risk goes together with return. People have dropped fortunes along with penny stocks however they have also created fortunes, and sometimes in an exceedingly short space of your time. Firstly a few points to appear out, BEWARE associated with placing market purchases. These stocks through there very character are thinly exchanged. You want LIMIT purchase and sell orders. If you dont then you will be used. Now onto the fundamental strategy I will construct for yo
u these days. First you will require a Market Screener, there are lots of free ones available and I suggest Yahoo Finance Screener, it's comprehensive, its reputable and simple to use. Once you possess your screener you will have to screen for the kind of stocks we are searching for. 1. We are searching for penny stocks, they are stocks under dollar 5 so we would like a share equivalent or less for this amount. 2. Following set the screener with regard to market capitalization. Generally between fifty dollars to $ 300 million is recognized as a microcap share. We are searching for penny stocks although so we may set our screener in order to under $ 100 zillion. If you possess trouble finding stocks that satisfy the other criteria the forex market screener can be moved as much as mico cap place. 3. This strategy actively seeks stocks which really are a little unfavoured for that moment. We would like to get our stock inexpensive. So next arranged the screener for stocks which
have shown declines within the last year. We can do that because with the other screeners we are looking for indicators of value. 4. We would like stocks that tend to be showing positive income growth. Set the actual screener for postive income growth. 5. Next select stocks having a PEG of under one. PEG is slightly better than PE as this incorporates growth. A PEG of under one suggests it's slightly under appreciated. 6. Set sales volume to a lot more than $ 500000 each day, with penny stocks it is necessary that you have sufficient volume to industry it. If it's no trading quantity it doesnt issue how good the stock is7. Finally set product sales volume to no less than 1 million. Sales are less simple to manipulate than earningsAnd there you've got a simple 7 Point technique for investing in Small cap stocks. Please note this is just a starting place for investing in Small cap stocks. It is One method to select stocks. Also you will still have to know how to LEAVE the sha
re so when. As I possess mentioned early Small cap stocks are RISKY but there's also high REWARDS. There are lots of examples of those who have made fortunes in a young age within Penny Shares. A common example is Timothy Sykes that made $ two, 000, 000 whilst still in their dorm room. Then set up the hedge fund that crashed (Theres the actual risk) but hes managed to get back again An additional example is Wayne Connelly or the actual “ Penny Share Prophet” as he's known, He whilst still in university, came up having a strategy that might turn $ 1000 inton dollar 1, 000, 000 within 38 trades. His work his located in Quantative Behavioural Finance that is basically the impact that human psychology is wearing share pricing.
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