The Ultimate Guide to Investing in Penny Stocks

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. 

There are different rules to penny stock trading and dramatically different approaches. While traditional stock trading methods will not work, you can learn how to successfully trade penny stocks and make a reasonable amount of profit in the process. 

Once upon a time, penny stocks traded for pennies on the dollar. Today, some die-hard investors still maintain they are stocks that trade for less than $1 per share. However, the U.S. Securities and Exchange Commission (SEC) has since revised the definition to include any stock priced under $5 per share. 

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. 

However, penny stock trading works best when you focus on a short-term investment that allows you to get in and out quickly. 

Ideally, penny stocks trading works best when you identify a positive market trend, purchase shares quickly, and then sell penny stocks before the value dumps again.