Can someone explain the upside and downside of trading in Penny stocks? I understand it is smaller trades, how do you work it to your advantage?
What i have read I don't get. I don't understand the allure. It seems to be almost like gambling at a race track on horses. Sorry if I seem stupid, I really don't get it.
I just read a thread on this forum that kind of explains it, though it is brief but I do believe that you will get a point or two in.
I'm also curious to learn more about penny stocks. Is it a good way to dip your toes into investing without putting out a lot of money? It does seem to me a little like gambling, but maybe if it works, you can benefit from it. Besides the posts in this subforum (which I'll read more thoroughly), can you point me to any other resources to get started?
JR explained it to me rather well and Youtube is a huge help for an idiot like me. I watched a ton of videos explaining it and have my head wrapped around the concept quite a bit better now. I'm keeping out of the penny stocks for now.
Penny Stocks Explained Penny stocks are low cost equities that cost from <0.01- 5.00 as the price They are easy to manipulate because the ups and downs move much faster than more expensive stocks. lets say penny stock XYZ is trading at 1.00 per share then it jumps up .20 points and is now trading at 1.20 P/S. all the money you've put in that company is now is up 20%. Pros: easy to make quick money because it moves so quickly and is easy to do research and analyze if it will go up or down. Cons: They are extremely risky and you can lose half your money quickly because of how fast the stoic moves. If anyone is interested I can tell you how to research penny stocks for free.
My understanding is that they are very small companies with small stocks that may or may not go anywhere. The threads on penny stocks here in this forum do a good job of explaining.
This is a very thorough answer, and you are right, the risk is often not worth it especially if the fundamentals are not strong.
