| Stock trading and penny stocks are two forms of | | | | Penny stocks have a heavy down-side risk. After all, |
| stock investment that get plenty of attention from | | | | these securities are not selling cheap just because |
| people looking for the road to riches. They are two | | | | nobody is paying attention to them. There's usually a |
| separate and different ways to invest in stocks, to | | | | problem somewhere. If you pay $1 and a stock falls |
| speculate. | | | | $.50, you've lost half your money no matter how |
| Stock trading is a game of timing, an active sport. | | | | much you had invested. And the truth of the matter |
| The trader makes ongoing trades trying to pick up | | | | is that once a company has a stock price in the |
| small profits on a consistent basis. This sport is | | | | cents vs. dollars, its chances of recovery are slim. |
| especially attractive during bull markets when stock | | | | Stock trading and penny stocks are words that are |
| prices are rising and volatile. The best stocks for | | | | rarely used in the same sentence. When you trade |
| stock trading are active issues that tend to move | | | | stocks you are not looking for the big hit. You are |
| with the market on a consistent basis. Another | | | | trying to get in and out with some sense of |
| favorite with traders are stocks that are in the news | | | | predictability. Penny stocks tend to have a life of |
| due to a special situation. | | | | their own, and can be very unpredictable. They can |
| Stock trading is like climbing a steep mountain slope. | | | | move up in a bear market when 90% of the market |
| You progress upward one step at a time, trying to | | | | is down. Or they can tumble when the market is up. |
| avoid a major slip. One significant drop or loss can | | | | One of the biggest mistakes you can make is to |
| wipe out much of your past progress. | | | | AVERAGE DOWN on a penny stock. As the stock |
| Penny stocks are a different way to invest in stocks | | | | price gets cheaper, you buy more and more shares |
| or speculate. This is a form of stock investment | | | | to lower your average cost. If the stock recovers |
| based more on selection rather than on timing. Here | | | | you make money. Odds are it will just crash and burn. |
| you are trying to find the best stocks that are selling | | | | Pick your poison. Both stock trading and penny |
| for a few bucks or less. If a $1 stock moves up 4 | | | | stocks are promoted by third parties with something |
| points to $5 you've gained 400%. If a $40 stock | | | | to gain. Brokerage firms always make money from |
| moves up 4 points you only gain 10%. | | | | active stock traders, and publishers of penny stock |
| Think of a stock investment in a penny stock as | | | | newsletters make money whether their subscribers |
| throwing the bomb in football. It's all or nothing. | | | | do or not. |