Home Finance Is It Possible Make Money By Trading with Penny Stocks?

Is It Possible Make Money By Trading with Penny Stocks?


Penny trading is a common phenomenon in the modern environment. Traders track down the market trends in the quest to make decisions on the types of shares to invest in. Individuals choose to trade penny stocks due to their ease of acquisition. Penny Stocks refer to common shares that cost less than £1 and $5 in UK and USA. They are highly speculative due to their low prices. Penny stocks are characterised by high volatility and riskiness. This raises the question on whether one can make money with penny stocks given their risky attributes.

Regardless of their risky and volatility attributes, these stocks can grow in both the short and long term basis. They are appealing given their low costs and traders prefer them. For instance, with £1,000, an individual can acquire several penny stocks in small companies as compared to the blue-chip ones. In case the company expands, the investors are bound to make money with these stocks.

The trends of the UK penny determine the willingness of the available investors to embrace them. In the case where the company in question has a rising trend, the investors flood in them. However, in situations where the trend declines, they avoid such companies. Where the investors have limited information about trends in stock markets, they face the risk of losing money and this calls for extra vigilance when dealing with these types of investments.

To make high profits, the investors should do a thorough background check on stocks that they are interested in. Eventually, they will make the most viable decisions by selecting trading stocks during the investment period. This article explores different aspects regarding penny stocks to act as guidelines for the traders when they invest in them.

Is It Hard to Sell Penny Stocks?

There are two major types of penny stocks which are penny stocks UK and US. If you are a beginner in the penny trading, there is a need to explore guidelines on how to invest in penny stocks for beginners. The guidelines outline elements to help in identifying stocks with a high risk of losing or gaining when in the market.

If your stocks are in the top 10 penny stocks in the market, you can easily sell them as the buyers will be available. These stocks are highly volatile making it crucial to keep track of their movement to ensure that you sell. If you are a newbie in the market, you should open a demo account to learn how to sell these stocks in the online platforms.

For beginners, after the learning process, it is crucial to start with the lowly priced stocks to be familiarised with the process. You can consider penny stocks under 10 cents and acquire them. You can then monitor them to view their changes in the market they operate in. These lowly priced stocks will equip you with insights on how to get started in penny stocks to realise reliable returns. 

Who Got Rich Off Penny Stocks?

Some people have financially benefited from these stocks and they fall under penny stock success stories. For instance, Tim Grittani invested $1,500 and multiplied it to $1 million through the penny shares. He utilised small entities and spent his time on the virtual platforms to realise his dreams. He embraces the aspect of timing in the purchase and sell of his shares to realise his profits.

He learnt about the issues that mattered in the stock market including genuine and scam information. He mastered the loopholes in the trading environment and took advantage of them to grow his shares. His determination grew to the extent that he traded daily and this increased his chances of expanding the initial investment. Apart from his research on these stocks, Grittani was inspired by Tim Sykes who was also successful in Penny stocks.

Tim Sykes is a millionaire trader who embraces entrepreneurship. He shares his trading journey in his social media platforms and blog. He acknowledges that most people have negative attitudes with regards to penny stocks due to the numerous propaganda and scams associated with them. Sykes states that penny stocks incorporate spread betting during pump and dump situations are common in penny trading. The traders should understand these situations to gain profits out of them.

Unlike Grittani, Sykes traded for four years to realise success. He managed to turn $12,415 to $1.65 million in investments. Not every trader will realise such immense profits in this type of trading. Continuous commitment and flexibility in penny trading can make one realise some revenue. On some occasions, you may end up losing your money but Tim Sykes asserts that it is part of learning and trading. 

How Do You Buy Penny Stocks?

If you are an online trader, you may have realised that CFDs are complex instruments to deal with. Changes in share prices are common in this area. Once you have decided to buy penny stocks, ensure that you deal with firms authorised and regulated by the financial conduct authority to protect your investments. Such firms have a low likelihood to engage in scams like spreading propaganda to defraud unsuspecting investors. If you are in the UK, you can research the firms registered in England and Wales to trade with.

Also, when buying these stocks, you can get relevant information on different bulletin boards and weigh their validity. Buyers are subjected to scams which results in poor decisions on their purchases. Fast, uninformed, and nonviable decisions are the basis of losing money rapidly due to the ease of being misled by unscrupulous parties. Some of them come up with malicious reports that outline penny stocks to watch at a given period. They spread misleading information about the unprofitable shares which makes it crucial to conduct background research and investigation.

After a thorough investigation, you should come up with an exclusive penny stocks list to help in decision making. This will act as a guideline on the penny stocks to buy. The previous trends in the market help in forecasting the stock that trade in the current market. It is crucial to engage in analysis from reliable company sources and not relying on unsolicited advice and selfish stock marketers. Most of these pieces of advice have hidden agendas and they shouldn’t be blindly embraced.

Monitoring can be made easy by opening a brokerage service account. As you gain your experience you should target companies with the most successful penny stocks in history to reduce the risk of losing your investment. You should embrace tactics highlighted with regards to penny stocks for dummies. This will equip you with the skills to deal with and benefit from these stocks.

If you are stuck on the decision regarding the penny stocks to buy now, you should consider the bankrupt companies that are actively restructuring their operations. They have a higher potential of increasing their prices in future. You should take advantage of the situation and invest in them as they are bound to grow rapidly due to leverage. The companies’ ranking and reputation in the market will determine their success in the market. For instance, if these companies fall under the best penny stocks 2020 list, you can be assured of success in trading with them. Apart from commitment trading, these stocks require continuous learning and research.

Claire James