Yousif Alias
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Yousif Alias in Income With Stocks,

4 Steps to Start Profiting From Penny Stocks.

As with many aspects of life, working in the stock market is a big risk. Fortunately, there are giant rewards for people who are educated in this field. It does not take a genius to profit from penny stocks.

Investing (and trading) penny stocks yields huge rewards for people who are bold enough. Penny stock expert Timothy Sykes made over $4.2M during the last 4 years - by Trading nothing but penny stocks.

There is a lot of potential for generating that much money in your bank account. In fact, a lot of successful people have doubled, tripled their investments on just one stock.

So, yes, penny stocks are a legitimate reason to get excited. However, the reality for most experts and traders is quite different; most end up making $0.50-$0.75 a share.

However, keeping these trade figures within small margins is the methods that master traders use to stay in business for a long amount of time. (Remember Sykes? He's been in the business for 15 years.)

What Are Penny Stocks?

The Securities and Exchange Commission (SEC) states that penny stocks don't involve pennies at all; quite different, in fact. "Penny" stocks are any stocks that are below 5%. This misconception allows misguided people to purchase penny stocks as if they were lotto tickets. (Which is a very bad move.)

To avoid bad moves such as that, and many other pitfalls that other, less respectable (and knowledgeable) people have fallen into over the years... Please review the following guidelines for ensuring your penny stocks yield maximum results.

1. Know Your Goals

Be forewarned: penny stocks are not a long-term investment solution. On the contrary. Penny stocks taken as a short-term investment have shown to be the most profitable choice for a lot of professionals and industry experts.

What does this mean for you?

Take penny stocks for what they are - stepping stones. It is vital that you hop one one stone, and quickly move on to the next one in order to reap the biggest benefits of penny stock trading.

2. Sell Right Away

One of the main reasons people invest in penny stocks is the sudden inflation of "returns." Returns can yield as much as 20-30% of investment margins in low priced stocks/shares.

Note: When you see these high returns, it is imperative to your bank account that you sell immediately. Numbers like these are not guaranteed in every stock - and in fact, they happen so infrequently that you will think you just struck gold. (Which you did!)

3. Do Your Research

Look for company data. Keep in mind, there are various difficulties surrounding certain data that depends on the certain company... not to mention whichever market that certain stock is in.

Among the company data to look for involves searching for...

• Company's balance sheet
• Real estate
• Liquid investments
• Cash/income
• Equity
• Positive/negative cash flow
• Etc...

Never invest in stocks that don't provide their data resources.

4. Create an Investment Account

The next step is to register with a platform to make trades. This step is paramount for ensuring your penny-stock trading success. Simply Google "penny stock trading platforms" for a bundle of respected platforms.

Please remember to do your background research on any interesting prospects. Keep in mind: most platforms charge commission fees.

There's More...

Trading penny stocks has been a viable market for more than twenty years. This means there is a lot of information out there to read up on. Still, for people looking to "break in", there is a lot more valuable, profitable information on the internet; read at your own leisure.

As with anything, value your own time and make the right investments. Stay safe out there.