Believe it or not you can learn enough about Penny Stocks and Virtually eliminate stock trading risk and dramatically boost investment gains.

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What are the best penny stocks to buy now? The sad truth is that over 90% of all penny stocks go
to zero. Think about it, stocks never start at pennies per share, they can only get that low if
something has already gone dramatically wrong. Some people talk about how certain major stocks
all used to be penny stocks but most likely this is false.
The truth is they were worth a miniscule fraction of the price that they are currently valued at, but
that doesn't mean they were penny stocks. Stocks do something called a stock split, the stock
price is cut in half, and the amount of shares available double. In addition the people who own
shares are given the chance to own twice as much. What appears to have once been a stock
worth pennies may not have been. The best stocks to buy now, aren't necessarily worth pennies,
but they will have that appearance once they have gone up significantly.
You have to really understand statistics if you want to invest in penny stocks and you have to
apply it. If a stock either doubles or goes to zero, and you get it to double 10% of the time, that's
not math that's in your favor. However, if the stock went up 10 times the amount and went from 10
cents to $1 or more, then you have the system working. 9 times you will lose 10 cents, but on the
10th time you gain 90 cents or more. So that is the break-even point at a minimum. Unfortunately,
this can still be a losing proposition if you can't handle money management.
In order to maintain your ability to buy stock, you will need to be able to continue to invest. If you
buy 10 stocks and you lose, you will be unable to buy any more if you invest 10% of your bankroll.
You will be putting the odds against you. Now that's why you need to never invest more than 2%
of the your money available for trading. That's enough to handle going quite a few times without a
win and still having enough invested to dig yourself out. Buying penny stocks more so than any
other is about money management. There are no sure things. The fact is most cheap stock
investors are hoping to get rich off a lotto ticket. It's not really smart to buy stocks just based on
their share price. It can be a reasonable strategy if you really know what you're doing. However,
there's so many stocks available, it's better to focus on buying stocks. You should be looking for
the best stocks to buy now, not the best penny stocks to buy now.
If the stocks happen to be penny stocks, then you can still buy them, but understand that over
90% of traders go broke at least once and over 95% of these buyers lose it all. So the best penny
stocks to buy now, are those that also happen to be the best stocks to buy now. If it's not the best
stock, it has minimal chance to go up. That's why there's no room for me to give actual penny
stock recommendations because most stocks for cents on the dollar don't pan out. I'd be fighting
the odds, and you have to understand that first before you think you know the best penny stocks to
buy now. It's possible to know the best penny stocks to buy now and still lose it all. The reason is,
everything has a chance to go to zero, just as everything has some chance to go from its current
price to double or triple.

2. Stocks under a dollar have the highest probability of going to zero. Stocks never debut for under a
dollar on the Nasdaq or New York Stock Exchange. The best penny stocks to buy now aren't sure
things, they're just "less uncertain" then all of the others. Maybe the best penny stocks only go to
zero 70% of the time. Sure if you lose your investment 7 out of 10 times and make 10 times your
money, it's a good investment, but only if you have correct money management. Most people have
$1000 to invest, and they invest $300, and lose it all, and then they only have $600, they invest
$200 and lose it, they have $400, they invest $100 and they lose it and now $300, they invest $50
and then they lose and with $250 they invest $20 and the stock goes from $.10 to $1 ad they sell
but now they only have $450 which is less than what they started with. So you can see how it's
possible to have what looks like a winning trade on paper,
They won on the 5th investment and had they kept all the investment size about the same, they
would have ended up having tons more money than they started with. In fact, if they invested $50
5 times, they'd be down to $750 then they invest $50 more and they'd be up 500 to $1200 and it's
a 20% gain. Most people go broke not because they select bad stocks. They may be convinced
that the free stock picks was simply bad advice, but in reality it may have been excellent advice
that just didn't work out. The cold hard truth is that you can't really make money with cent stocks
without good money management whether you like it or not. That leaves almost no room to really
get rich off these super cheap stocks, but you certainly can manage to find some room for profit.
There's a reason why you never hear stories of Warren Buffett or Monish Pabrai investing in 99-
cent stocks or cheaper. First the market cap is so small they would probably buy half the company
with the change in their pockets compared to the average Joe. Second, they never got rich off
buying penny stocks because most of them don't work.
I'm sorry, the best penny stocks to buy now just don't exist in the way you think they do! That does
not mean that it's a worthless endeavor to buy penny stocks, it just means that those stocks
deserve contemplation. first ask yourself "would I buy this right now before all other stocks?" "Is
this best penny stock to buy among all best stocks to buy?" "Am I trading these stocks worth
pennies with a trading system?" "Do I have correct money management?" There are several other
factors to consider. In general you should be very careful when buying penny stocks and
understand that there are other factors that determine whether or not a stock is cheap. Just
because it is worth cents on the dollar, does not necessarily mean it is the best penny stock to buy
now and that it is the most undervalued stock out of all of them on the market.
The author teaches educational information that you might need to know to buy penny stocks. You
can use his site to find information to learn whether or not you really can find the best penny
stocks, or if they should be avoided.
Article Source:
http://EzineArticles.com/?expert=Ron_Welcomes

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