Knowledge is power to grow in the world of penny stocks, a world where you can make big money from small. Sitting on the sofa and thinking of making big will not work. You will have to make a beginning from somewhere to make it big, and that somewhere would be to educate yourself on what is small cap and penny stocks and how you can become a successful small cap investor.
To become a small cap investor is not easy. You need guts to bear the losses if in case they happen, be positive in all situations, put in lot of time to know how everything works and believe in yourself that you can be a profiting small cap investor. When you have all this only then it will be possible for you to get what you want from your penny stocks after all success is never certain here.
Exactly what are penny stocks? Penny stocks are shares which are traded under much lower value may be below $1, $5 or $10 and are traded on OTCBB market. Small cap investor can also trade them through the pink sheet electronic quotation service. Thus they are perceived as beginner’s area where risk is lower and failure would not be disastrous unless you have put in limited funds.
Let us take an example to get a better idea of penny stocks. For example if you have $20 in spare and want to invest in big cap stocks then you will able to buy only one share but if you invest the same money in small cap then it is possible for you to have 100 shares at $0.20 cents. That is a huge difference isn’t it?
As a small cap investor you should know that small cap and penny stocks experience frequent changes as much as 400% in one single day. This growth rate is very lucrative but very dangerous at the same time because it has the tendency to fall at the same rate. small cap and penny stocks can be hugely beneficial only if you can anticipate the risks in advance and make the right decision at the right time. public relations consultants can use different tools to help them make the right choice.
Benefits of small cap and penny stocks are sue to lure in public relations consultants. First you need very less investment to start earning, second you can see growth in upwards of 200% in one single day that is you have the potential to earn big in a small period of time and the loss is minimum if in case you lose. In times of tight financial situations they come as an easy option out to help you add some extra income to the family.
Now that you are sure you want to be a small cap investor here are a few tips become one :
1) Open a brokerage account with a reputed broker and add some fund to it. Small cap investors are able to use it as a regular bank account.
2) Use your stop losses option to the maximum to ensure you make smaller losses.
3) Remember buying back is always an option.
4) Believe in hard work and research because it is only through these that you will be able to find the best penny stocks option.
5) Ask for level 2 quotes and real time data.
Author: John Catherin
