To find success trading penny stocks, you need to reframe your investment mentality and recognize that the penny stocks trade market is not like a traditional major stock exchange. Here are different rules to penny stock trading.
Trading penny stocks is very different from buying and selling on major exchanges. Most trading strategies on Wall Street are based on playing the long game or looking for small companies poised to take off.
Many penny stocks exist on OTC markets instead of the major stock exchanges. Both NASDAQ and NYSE have rigorous reporting requirements that protect stock traders.
The following are some of the most prominent risks: 1. Limited Liquidity 2. Companies Are Unknown 3. Fraud 4. Small Market Capitalization
Buying penny stocks is not for everyone, but savvy investors can make money from only penny stocks. Remember that the over-the-counter market requires constant attention and a keen eye for detail.