How To Buy Penny Stocks

You need to know how to buy penny stocks. Don’t worry, we’ve all been there. I’m going to assume you know what a penny stock is, but if you don’t, take a quick look at our homepage for a description.

Penny stocks can be traded on various stock exchanges, including the National Association of Securities Dealers (NASDAQ), AMEX (part of NYSE), New York Stock Exchange (NYSE), Over the Counter (OTC) and Pink Sheets. All of these exchanges have different rules for listings. Your better penny stocks will be listed on NASDAQ, AMEX or the NYSE. After that, the OTC BB.

When you get into the Pink Sheets, it’s really the Wild West because “pinks” don’t conform to stricter Securities and Exchange Commission (SEC) rules like other companies listed on other stock exchanges. We recommend you stay away from penny stocks listed on the Pink Sheets. There are plenty of opportunities elsewhere.

How To Buy Penny Stocks

Actually, buying penny stocks is exactly the same as buying any other type of stock. So if you already know how to do that, you know how to buy penny stocks. If not, don’t worry. I’ll proceed with showing you how to buy penny stocks properly.

Here’s the general checklist for buying penny stocks online.

1. Get capital for penny stocks trading and investing. We recommend you have at least $500. Yes, you can start with less, but it’s slow going.

2. Find a good online penny stocks broker. We don’t recommend looking for a full-service brokerage for penny stock trading. You’ll get hammered with fees. You want a discount brokerage. More specifically, you want a good broker for penny stocks. That link has more information about who to look at choosing.

3. Setup an account with your online penny stocks broker. Some penny stock brokers have minimum deposits and some don’t. Capital aside, just choose the best broker for your penny stocks trading plan.

4. Begin researching to find hot penny stock picks. Always do proper penny stocks research before jumping into bed with anything. Don’t just jump into something because you saw someone saying the best penny stocks to buy are X, Y and Z. Investing in penny stocks is highly rewarding, but caution is needed.

5. Execute penny stock trades once you understand how to buy penny stocks.

That’s the general overview. Now let’s look at a few more specifics about how to actually buy penny stocks.

How To Buy Penny Stocks Example

Okay, you’re all set with your online broker and money is in the account. It’s now time to buy a penny stock.

Each stock has its own symbol. For example, the symbol for Google is GOOG. You need this symbol to buy penny stocks. Your broker’s trading interface will make this very easy, so don’t worry if it sounds confusing.

Once you have the company in mind, the next decision is how many shares of the penny stock you want to buy. For our example, I’m buying 100 shares of a fictional company.

Here’s a key penny stocks trading tip for you. Never do a market order. When you buy and sell penny stocks, you want to do what’s called a limit order.

How To Buy Penny Stocks: Orders

Market order: You’re saying I’d like to buy or sell my penny stock and I’ll take whatever price you want to give me.

Limit order: You’re saying I’m buying or selling my penny stock for $X or better, no less.

As you can see, a limit order gives you more predictibility and command over your trades.

You can also select “All or None.” When you choose that option, you’re saying that unless you can buy or sell all of your desired shares, you don’t want to do the transaction.

Next, you can choose the penny stock order’s duration. For example, you could enter the order for just today at market close or just keep it opened until it’s filled.

Penny stocks always have two prices: bid and ask. The bid price is what people are buying the stock at currently. And the ask price is what people are willing to pay currently. The difference between the two is called “the spread.” Stocks with bad spreads can kill a penny stocks trader in a hurry.

Let’s say you see stock for PSCOMP, Inc (fictional company) with a bid price of $1 and an ask price of $1.10. This means that if you buy the stock right now, you’d pay $1.10 per share. And the spread is 10 cents, so if you instantly sold it back, you’d lose 10 cents per share since people are only willing to pay $1 per share. In order for you to break even (not taking broker fees into account), the stock’s bid price must go up 10 cents to $1.10 (so a 10% increase). See why the bid/ask spread is important?

When you’re just starting out with penny stocks investing and trading, start small to get your feet wet. You’ll make mistakes. It’s part of learning how to buy penny stocks. Just keep at it, read and research.

Now you know how to buy penny stocks.

Gold Penny Stocks

When a nation’s currency is in turmoil, people look to invest in gold and gold penny stocks make an interesting choice. If you’ve been even partly alive you’ve seen all the gold news and know the gold price has been on a meteoric rise these past years. But what are the gold penny stocks to buy?

I’ve invested in gold and years ago as part of my gold investment plan I jumped into a gold exchange traded fund that has since exploded. Whether it’s gold stocks, funds or gold coins, you need to be thinking about investing in gold. I expect to see more gold top penny stocks.  Read more

China Penny Stocks

Is it time to invest in China? If you think so, then China penny stocks exist. However, before we all try to jump in on the China stocks bandwagon, let’s look at the country and what we need to be aware of before we start trading these penny stocks. Be sure to read up on making better penny stock picks too.

As part of our ongoing series to bring you the hot penny stocks choices and overview viable trading and investing ideas, we’re beginning to bring you information about China, including china stock picks, good Chinese penny stocks to watch and investing overviews about the Chinese stock market.
Read more

Online Penny Stock Brokers

The financial industry can be tough to navigate and sorting through the waves of online penny stock brokers is just on part of the puzzle. I know one guaranteed way to lose money in the stock market—pick the wrong broker. Flashy ads and steak sizzle aside, they are not even close to being all equal. And when you’re trading penny stocks, your online stock broker selection is all the more critical. Read more

What is Penny Stock Volatility?

Those newer to any type of stock investing and trading usually have a core list of lingo that stumps them. And penny stocks trading is no different. Today’s question has to do with penny stock volatility. After answering the question, I’ll also present you with some other key stock terms to know. Read more

Penny Stocks Research Tips

I’m always amazed at the stories I hear of traders dumping money into a stock without any penny stocks research at all. That’s a quick ticket to the poor house, especially if you’re risking capital you can’t afford to lose (see: Online Penny Stock Trading ).

Funny, these traders will sift through Google.com looking for reviews for a $10 product or for the latest hot penny stocks from some site, but will gladly dump thousands into a stock on a whim. Don’t be that trader. Penny stocks research is vital to your success. Treat your investments like you do your life.

I’m not saying you need to have the home number for the CEO before you make a play, but you do need to be prepared if you want to find the best penny stocks. Start with good sites. Create bookmark folder and fill it up with a handful of sites. I’ve given you some great financial sites, which can be used for more than penny stocks research, in a moment. Read more

Which Penny Stocks to Buy: 4 Winning Indicators

If you’re like many stock investors, deciding which penny stocks to buy consumes a large portion of your time and may even prevent you from investing at all. I think many simply walk away from investing in general because they can’t make a decision.

With this in mind, I want to present you with 4 winning indicators for penny stocks that I look for before doing any penny stock trading. This isn’t some guaranteed winning stock pick checklist by any stretch. Instead, it’s a way of filtering out all the junk and stocks that really aren’t viable options. You’ll still be left with decisions to make, but those investment decisions should be far easier.

Let’s jump right into it. Read more

How Do I Buy Penny Stocks?

For many, buying and trading penny stocks seems complicated, but the basics are very simple once they are laid out. Let’s jump right into today’s penny stock investing question.

Q: How Do I Buy Penny Stocks

A:

Buying penny stocks begins with one critical first step. You need capital to invest. Never trade with capital you can’t afford to lose. There are no guarantees in life, especially in the penny stock market.

Once you have capital in hand, you’ll need to setup an account with a stock broker. There are many out there to choose from. The best broker for your penny stocks account will depend on your capital, your trading strategy and your needs. Here’s a penny stocks broker review we did that you might want to check out.

After your account is setup, you can begin buying and selling penny stocks. We recommend looking for penny stocks that are listed on NASDAQ or the OTC. For more helpful tips, read Buying Penny Stocks Online. Penny stocks work like any other stock for the most part. You decide how many shares you want and pay the asking price plus a commission. For example, let’s say Company XYZ is has an ask price of $1.02. Your broker charges $7 per trade and you want 100 shares. You’d pay $109 ($102 for the 100 shares and $7 for the commission).

Picking the right penny stocks can be tricky. Here’s a great penny stocks picks article that lists four successful tips for picking those winners.

If “How do I buy penny stocks” is still unanswered in your mind, I invite you to read the many articles on Penny Stocks Capitalist, so you gain a solid understanding of the stock market from a penny stocks perspective. Good luck!

3 Habits of Successful Penny Stock Traders

I’m a big believer in foundation. If you’re a good penny stocks trader at the core, you’ll have more good trades and few junk ones. You don’t need decades of financial training or some insider knowledge to succeed in any type of financial investing.

Heck, I made money buying and selling raw land without knowing all the ins and outs. What I did have was a solid core.

I’ll keep this short and sweet. There are 3 habits of successful penny stock traders I want to share with you. In fact, these habits really apply in principle to any financial investing. Read more