Good Penny Stocks Investment Strategy For Fast Profits With Low Risk Investments

Finding good penny stocks to invest in isn’t as easy as some would have you believe.

Yes, there is the opportunity to make huge profits but you must also be aware that you could very easily lose your shirt if not careful.

You need to tread carefully and have a plan of action not only in knowing how to uncover good penny stocks but also a solid trading method that will minimize risks to your capital.

Most investors avoid penny stocks because they are high risk investments and tend to fluctuate quite dramatically in price but it’s not uncommon for good penny stocks to quickly move up in value and make gains of between 50% to 300% in just one day.

But It’s always better to be sensible and play it safe, penny stocks can move down just as quickly as they move up and if you don’t have a credible exit plan you could easily lose half of your investment if not more.

For example, if you buy stock at $0.10 and 24 hours later sell the stock at $0.13 you will have made a 30% return on your investment. On the otherhand, if the value of the stock was to fall by 3 cents (to $0.07) you would be at a 30% loss – If your investment was $5,000 that would equate to a $1,500 loss.

It’s absolutely vital that you keep your stops close and should you get stopped out, don’t get emotional and don’t over-analyze just move onto another good opportunity.

If your exit strategy was to sell the stock once it had reached $0.13 (a 30% gain) but you discover that overnight the value had jumped to $0.14, you have two choices, (a) take the 40% gain and move onto the next opportunity, or (b) even better, place your stop at $0.13 thus locking in your 30% profit whilst not restricting the upside potential.

By always incrementing your ‘stop’ on good penny stocks that make moderate gains you can safely follow the stock as it rises and secure bigger profits.

90% of the battle is identifying those good penny stocks in the first place that are just ready to break out. Studying charts, analyzing trading patterns, resistance and volume levels is only part of the story. Knowing how to predict trading patterns requires a certain skill and an understanding how to identify the ‘PSL’ Psychological Support Level of any given stock – PSL is the key to finding under-valued stock.

For most budding investors who want fast results the simpler solution is to sign up to a newsletter via a mailing list. There’s no shortage of penny stock newsletters and some of these can be quite profitable in the long term.

However, the internet is littered with shady operators who regularly ‘Pump and Dump’ penny stocks, they target gullible ususpecting investors via their ‘exclusive tips’ newsletters, and whilst these subscribers are buying up ‘dodgy’ stock they are selling at a huge profit.

Knowing who you can trust and where to find good quality information can take time and a lot of research. Do they have a track record of providing good penny stocks advice to their subscribers. More importantly, what do their subscribers have to say?

If you are budding penny stock investor looking for fast profits with low risk investmnts then you might be interested in what James Connelly has to say. He’s developed a unique formula that can identify good penny stocks before they breakout and start to move – For more information click here