| Finding good stocks to trade is arguably the most | | | | When the company "makes it" and start expanding |
| important part of trading online. With thousands of | | | | you can make a fortune. Unfortunately many of |
| stocks on hundreds of stock exchanges the world | | | | them don't and they can disappear overnight - leaving |
| over you really are spoiled for choice. In fact, the | | | | you with nothing. |
| biggest problem in choosing stocks is to sift through | | | | When trading penny stocks you need to be very |
| all the thousands of stocks and find the ones that | | | | diligent with your research. There are most certainly |
| can make you money. | | | | a lot of opportunity trading these low-cap stocks but |
| Not all stocks are created equally and there are so | | | | the high risk factor keeps a lot of people at bay. |
| many strategies for picking stocks that it can really | | | | More than anything, when you trade these low cap |
| be overwhelming if you are not very focused. One | | | | stocks you should never trade more than you can |
| simple fact is that generally speaking, the more risk | | | | afford to lose. The risk is at least twice as much as |
| there is in any particular trade, the bigger the | | | | with conventional stocks. |
| potential reward. | | | | Don't get swept away by promises of 2000% |
| If you go and buy shares in Apple or Microsoft the | | | | returns in a week or two. It rarely happens. Try and |
| risk is quite low. What are the chances of these two | | | | look for good companies and focus on potential |
| giant companies running away with your money? | | | | value. Every big company started small. Keep that in |
| The flip side is with high risk stocks. The potential | | | | mind and try and see what a company's future |
| gains immense and returns of 1000% are very | | | | potential might be. What kind of backing do they |
| possible with start-up companies, but (and this is a | | | | have? Is it a legit business? What does the press |
| big but) the risk is very high. With so-called penny | | | | have to say about them? Do your research, proceed |
| stocks its mostly start-up companies that are looking | | | | slowly and with caution and keep a very close eye |
| for venture capital to build their business. | | | | on these stocks. |