Penny Stocks for Dummies PDF Book Review

I have checked everywhere online, you are going to have to purchase a copy of penny stock for dummies by Peter Leeds from Amazon.com, because there are no free copies anywhere.  

Before you learn exactly how to buy penny stocks online, you first need to be able to define the term penny stock. A stock that sells at a very low price, such as below $5, is often called a penny stock. Some people consider all micro cap stocks to be penny stocks; a micro cap stock is any company with a market capitalization under $250 million. Some people define a penny stock as any stock traded through OTC quotation services like the Pink Sheets or the OTCBB (Over-the-Counter Bulletin Board).

On this hub, you will come to know how to make a list of penny stocks, why you need to be careful while investing in penny stocks, where you can find good penny stocks, how to buy penny stocks and what you need to do to create an account for penny stock trading.

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If you don't yet have much knowledge on penny stocks, making a list of penny stocks is the first thing you should do while learning the ropes. This way you can observe and track your list of penny stocks as you study why theyir values fluctuate. By exploring the Pink OTC Market (Pink Sheets) and the OTCBB, you will find tons of penny stocks.

But just creating a list of penny stocks doesn't make it clear which stocks are worth buying and which ones you should avoid. Despite the name, penny stocks aren't really the best idea for people who are new to stock trading; stock trading veterans have more connections and more experience in evaluating stocks with relatively little public information (which is often the case with penny stocks).

Be thorough and be cautious: you will find plenty of fraudulent activity rampant in the penny stock market, much of which is geared towards exploiting gullible novices.  Take the time to read what others have to say and consider the motivation behind their perspective.  Just as I found it helpful to sift through multiple P90X reviews before choosing the best fitness routine, I find it helpful to take in multiple perspectives on the potential of a penny stock.

As you develop your list, be wary of traps laid by savvy brokers trying lure you into buying their hyped stocks. Research and learn how to identify schemes like the Pump and Dump and the Chop Stock.

You should seek advice from veterans while making a list of good penny stocks. I always suggest working with full-service brokers until you understand the market better. Even if you find attractive penny stocks, do not make a huge list of penny stocks but rather make a list of three to five good stocks.

Many people who are interested in buying penny stocks online are often confused by them. These stocks are not listed in major stock exchanges mainly due to the fraudulent activities associated with them. However, you can find good penny stocks via brokers that make use of over the counter (OTC) systems. Be very skeptical and cautious when dealing with lists provided on penny stock forums, blogs and newsletters. Those areas are filled with people trying to exploit novices. Stick to established, reputable brokers and stocks listed on the Pink Sheets and OTCBB. A great place to find penny stocks is Nate Michaud's website, InvestorsUnderground.com

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Before you engage in penny stock trading, you need to have a strong grasp on the fundamentals of investing. Hence, it is very important to educate yourself about the basics before you start investing. On the internet, you can find plenty of free e-books and websites that offer valuable information about investing in penny stocks. I also suggest you consider a couple of well-reviewed hard copy books from Amazon. Once you have a strong foundation of knowledge, you can contact a broker to create an account for penny stock trading. Again, I suggest working with an established full-service broker until you really know your way around penny stocks. Fidelity is a highly reputable and established broker, for example.

When you have a degree of mastery in this area, then you can make use of a discount brokerage account to buy and sell more often with lower fees. But compared to discount brokerages, full-service brokers provide personal assistance and guidance on investment. Discount brokers can be found in large numbers on the internet. These brokers provide powerful online trading applications through services like E*Trade.

The process involved in buying a penny stock is not all that different from buying a regular stock. However, before you set up an order, you need to know where the stock you are planning to buy will trade. Unlike regular stocks, penny stocks are traded on different market exchanges. If you want to buy penny stocks, you can look for them on the OTC market. The Pink OTC Market and the Over-the-Counter Bulletin Board are places you can look for the main quotations of the OTC market. When you find a good stock, you can go ahead and ask your broker to execute the order.