How Do You Pick And Trade Penny Stocks?
• Understand why penny stocks are considered a dangerous investment. Penny stocks are among the most volatile and most manipulated form of investment in the stock market. The companies usually have no track record of solid financial performance.[3] In addition, the stocks are often manipulated by scam artists.[3][4] • Get at least one year’s experience with mid- and large-cap stocks first. You should become adept at reading a balance sheet, income statement, and cash flow statement during this time.[1] • Learn more about the specific aspects of penny stocks that make them both potentially lucrative and dangerous to your portfolio. Understand the mechanics behind money flow, market capitalization, and share structure. Also understand the purpose of a public company and the commonality of scams, dilution, and loss of investment value associated with penny stocks.[5] • Know which stocks to reject off the bat:[1] • stocks that aren’t traded on one of the major U.S. exchanges (aka bulletin
