Learning how to get into penny stocks can be a difficult task. There is a lot of conflicting information about what is the best way to trade penny stocks. And just learning how to trade penny stocks at all can seem a little complex. This guide will illustrate what you need to do to get yourself up and running.

One of the best ways to get into penny stocks is to paper trade before you actually start playing with real money. Paper trading is where you use virtual money to make your trades instead of real money. You can use paper trading to see if the methodology that you have selected is working. And if at the point you are happy with your system you can start trading for real.

One of the first things you will need to do when you start trading penny stocks is to open an online brokerage account. You have two main options when it comes to opening a brokerage account. You can either choose a discount broker or a full service broker. Both of these have advantages and disadvantages. A discount brokerage has the advantage of offering a lower level of commissions. This can add up to quite a bit of money if you are trading a lot. This is why most experienced traders choose a discount brokerage. Also these days a lot of discount brokerages offer trading tools and up to date information. Sometimes these will be free to their clients or sometimes you will have to pay to get access. A full service brokerage on the other hand tends to be more expensive in terms of commissions. However they will do more than simply broker your trades. They will also offer you advice. This can be invaluable when you are starting out. It will also stop you from making beginner mistakes. IF you feel comfortable with your trading however it is probably better to go with a discount broker.

The next thing you will need to decide is exactly how you are going to trade penny stocks. There are a variety of techniques available to you and it can be difficult to choose which one is most suitable for you when you are starting out. As such many people like to subscribe to a penny stock newsletter for guidance and advice. There are many good penny stock newsletters out there and it is simply a matter of choosing one which you feel best fits your trading style. See if they offer any free stock tips. You can then paper trade these as mentioned above and see how they perform. You can use this as a basis of whether you would like to use the penny stock newsletter or not.

Trading in penny stocks can be a highly profitable activity. It is one of the few areas of investment that actually favours the smaller investor. Due to the small size of the companies larger investors and hedge funds have difficulty trading the market. This can mean opportunity for you, as long as you are willing to do your homework.

Visit Penny Stock Investor to find the latest tips and strategies to maximise your Penny Stock Trading Profits

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Category: Finances
Keywords: penny stock investor, pennys stocks, how to get into penny stocks