Are You Trading Penny Stocks Weekly?
Every time I look around I find more and more suggestions to trade.
Buy this penny stock NOW!
Sell this penny stock NOW!
Hurry before its too late!
If I had a penny for every time I heard someone scream at me to make a trade, Id be an even wealthier man!
What many penny stock investors dont understand is the huge difference between being a penny stock trader and a penny stock INVESTOR!
Trust me, theres a huge difference.
You see, many people with trading accounts think they need to be doing something. And the whole idea behind day trading jumped into the investor psyche.
All of a sudden, instead of looking for a good company with a cheap stock price, you now need to find that HOT penny stock that you can trade this week. Weekly trading of penny stocks is very popular and even day trading is becoming the norm.
There are so many problems with this I dont know where to start . But let me give it a shot.
Here are the big problems with trading your penny stocks weekly (or more frequently):
Costs will eat you up! I know its only a few bucks to trade, but consider this if you spend just $5 on a trade and trade twice a day thats $10 spent. Over a week, its $50. And over a 50 week trading year (you gotta take some time off right) you just spent $2,500!
If you only have $50,000 to invest or less, thats a huge hit to your profits.
Research gets tossed aside! When you need to trade and trade some more, let me ask you how much research are you really doing on the stocks youre buying. If you have to get in and get out and are following the hottest ideas you probably dont have much time for research on these companies.
Let me ask you, do you think Warren Buffett buys a company without doing his research?
Volatility is a double-edged sword! When youre in and out of penny stocks every week, the volatility in the markets will just eat you alive. A lot of the day to day movement has nothing to do with economic reality. Its the herd mentality rushing back and forth to the hottest idea of the day (or whatever CNBC is talking about).
To really profit, youve got to think outside the box and that means avoiding the herd.
Look, I could go on and on about how bad the short term trading mentality is, but I think you get the idea.
If you want to really make big money trading penny stocks, youve got to stop trading penny stocks weekly or daily and become a longer term investor.
Youve got to look at penny stocks as companies that will grow and prosper like a vegetable in the garden. You dont pluck a carrot from the ground 10 days after planting seeds you give it time to grow and mature and thats the real key behind making big, big money in penny stocks.
Next time Ill tell you about one of our past trades that skyrocketed and made some people RICH because they had the strength to hold on for the long term!
Profitably Yours,
Penny Stock Research
Category: Investing in Penny Stocks, Penny Stock Tips
