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Day Trading Penny Stocks Is It Really Worth The Risk

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					Title:
Day Trading Penny Stocks - Is It Really Worth The Risk?


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465


Summary:
Is day trading penny stocks really a wise move for your investment activity? Many people are wary of this
activity, and with good reason. While you certainly do hear the glamour stories of the many investors
who’ve made fortunes with penny stocks, you often times don’t hear about the thousands who’ve lost a ton
of money in the process.


Penny stocks are notorious for enabling you to make either huge gains or losses overnight. Many people
hear stories about somebody who made...



Keywords:
day trading penny stocks



Article Body:
Is day trading penny stocks really a wise move for your investment activity? Many people are wary of this
activity, and with good reason. While you certainly do hear the glamour stories of the many investors
who’ve made fortunes with penny stocks, you often times don’t hear about the thousands who’ve lost a ton
of money in the process.


Penny stocks are notorious for enabling you to make either huge gains or losses overnight. Many people
hear stories about somebody who made a million dollars in a couple days day trading penny stocks, and
become so enamored with that they don’t realize these same investors (gamblers, really) most often lose all
that money soon after.


Believe it or not, penny stocks are nothing more, nothing less than glorified gambling. Yes, there are some
investors who can make a lot of money with this avenue, but only if they are absolutely sure of what they
are doing. The reason for their volatility is simple: every one of these companies that are trading for les than
$1 per share got into the situation for a reason.


Usually, it was either bad management, poor economics, or a combination. Therefore, you’d better have a
good reason for thinking a turnaround is about to occur before laying your money down.


The main reason day trading penny stocks is so risky is that it doesn’t take much to affect your investment.
For instance, if you buy in at .25 cents, and the stock goes up to .50 cents, you’ve just doubled your
investment just by a .25 cent gain! Of course, the same risks apply for it going down.


While a .25 cent swing for most stocks would be hardly noticeable, for penny stocks they can be either mega
profitable or suicidal. Therefore, if you do plan on entering the exciting, non-stop action world of penny
stocks, you need to be absolutely sure you are an expert at looking at a company and spotting a turnaround
possibility.


Think about this: most of the world’s top investors have gotten to the point they are at by investing in good
stocks that have exhibited a long term of profitability. When you invest in penny stocks, you voluntarily take
yourself out of that realm and focus only on companies that have proven they can’t turn a profit. Yes,
sometimes miracles or turnarounds do occur, but not very often.


If you do plan on entering this world of day trading penny stocks, you need to become an expert at spotting
companies you are sure will turn things around, and jump in at the right time. No, making money with
penny stocks is certainly not impossible, but you must know what you’re doing, and monitor your
investments closely at all times.




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