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Three ways to take full advantage of penny stocks and profit

by , 08 October 2015

Finding great penny stocks isn't always easy, but it can be very rewarding. Investing in penny stocks is also risky. You may buy into some that flop.

But you can better your chances of investing in penny stocks profitably.

Read on to find out how…

Investing in penny stocks tip #1: Initially only invest half of what you want to

When you uncover penny stocks that you want to invest in, take your time. Instead of jumping in and buying, invest half of what you want to hold, the experts at Money Week explain.

By doing this, you’ll become much more aware of what’s going on with the company and pay much closer attention as your money is now at stake.

You can then see how the penny stock does. If the company performs as you initially thought it would, you can add to your position. If it doesn’t progress as you thought it would, you’ve not risked as much money as you were going to.

Investing in penny stocks tip #2: How to handle falling share prices

Penny stocks can be more volatile than larger companies. This means their share prices have a tendency to bounce around more.

If a penny stock you have in your portfolio starts to fall, don’t panic. Instead try to find out what’s causing the fall. You need to ensure the reasons you invested in the first place still hold.

If these change, it’s perhaps time to sell.

Investing in penny stocks tip #3: Wait for the right price

Just because you’ve uncovered a potentially great penny stock, don’t pay over the odds for it.

Work out a price you’re comfortable paying for it and wait for the share price to fall back to this level.

By paying more, you’re eating into any potential profits. It’s vital to be patient.

So there you have it. Three ways to take full advantage of penny stocks and profit.

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Three ways to take full advantage of penny stocks and profit
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