Stock Market Trading Tip – Achieve 40 Percent + Returns

Let’s face it folks making money on the stock market is not easy. If you take a look at the normal companies covered and pushed by the mainstream stock brokers you soon realize you need a significant investment to make decent money.

There is another way! It is a little more risky Here is a stock market trading tip for you – try investing in Penny Stocks. I am currently tracking 3 Penny Stock recommendations sent to me last month and 2 out of 3 are achieving 40%+ returns!

Here are stock market trading tips and facts you should know about Penny Stocks before you consider making an investment.

1. The value per share of a Penny Stock company is generally defined as having a face value of under $1. The company will also have a market capitalization of under $500M.

2. Penny Stocks have a lower number of shareholders and people trading the stock. These means a couple of important things for the potential investor. Firstly, the stock is much more volatile meaning the price of the stock and move rapidly either up or down. Secondly, trading volume spikes erratically – there is no smooth trading pattern so selling and buying share may be more difficult.

3. The volatile nature of the Penny Stock price gives the investor the opportunity to make significant profit. However, you also need to bear in mind that a Penny Stock is considered a very speculative investment.

4. Penny Stocks attract investors because of the low face value of the share. This means you can buy a large number of shares for a relatively lower investment which is attractive due to the increased investment risk. You need to purchase a decent volume of shares to maximize your returns.

5. The amount of information on Penny Stocks is much more limited compared to mainstream stocks. Investors usually rely on a combination of Penny Stock newsletters and word of mouth recommendations. You can also use a site like Yahoo! Finance to view company information and historical share price information. Be extremely wary of penny stocks pushed by spam email. I must receive at least 5 recommendations via spam email every day – ignore them!

Penny Stocks are a smart stock market trading tip where you can start small and make a decent return. One of the issues is getting quality stock pick recommendations which I solve below.

Stock Market Content Provider – Be Careful Who You Listen To

So what is the best stock market content provider to help you keep track of your investments? If you are going to be an active trader on the market, then the right provider is absolutely crucial to making some big money.

Many sites today provide stock market content; it isn’t hard to locate these. However, what information is really right, and what should you avoid?

With all the seeming conflicting information out there about the market, it’s easy to get hopelessly entangled with all the information. Here are some tips to help you avoid that.

First of all, the first bit of knowledge you need about the stock market is that it’s up and downswings are mainly caused by too many uneducated investors on the market. Here’s an example: many investors will often buy a stock purely on speculation that it will soon rise.

Often times, the reasons for their decision really have very little to do with the companies income statement at all. Most investors will simply make their buy or sell decision based purely on how the economy as a whole is decision, and the companies stock price; not how well they are doing financially, which is obviously the bottom line.

The great depression in the 1930′s was largely the result of the actions of these uneducated investors. Usually, they act together when buying or selling a stock, and chaos ensures.

Whenever an expert makes a recommendation to buy, or the stock price begins to rise, everybody jumps aboard the bandwagon, causing the stock price to rise even if there are no real profits behind the swing. This same principle applies if everybody sells at once; often times, a great company can be bought at a bargain price because of this herd mentality.

In other words, a stock price is often determined short term by factors that really have nothing to do with it’s overall profits. Long term, the market will tend to value a stock according to its’ actual net worth.

Therefore, the bottom line is, it is very difficult to make money wit short term investing, such as technical analyses (the analyzing of a companies stock charts and patterns). However, if you invest in a company for the long term based on its’ overall profits, you can generally be assured of cashing in.

In fact, when you do invest or the long run, you can often times go months without even looking at your investment, because the day to day wild swings in the market won’t affect you like it does most investors. When you base your investments solely on the profitability and long term prospects of the company itself (not the stock price) you will get very wealthy from your investments. Therefore, be very careful from which stock market content provider you take advice from.

Stock Investment Tips – The Best Resources

New to stock trading? Want to learn how to invest in the stock market but you do not know where to find the best resources? Here are the most practical things that you can do to find the best stock investment tips.

Find the Best Broker

You need a broker if you want to invest in the stock market. Make sure that your broker provides investing education services. The best stock market broker will teach everything you need to know about the market.

Some of the top brokers today provide beginner training for new clients. These trainings include regular email tutorials, investor tips, online webinars, and daily market updates. Some brokers also provide exclusive access to online newsletters where the works of major market analysts are published. All these resources can provide significant help for you and will enable you to grasp the essentials of the stock market, investing, and stock trading.

Get an Online Crash Course

There are formal online crash courses available for new investors. You can take advantage of these formal courses to get solid stock investment tips and lessons from trading gurus. There are plenty of benefits that you can enjoy from formal courses.

Through these courses you will be able to learn how to read charts, how to analyze different market indicators, and how to pick profitable stocks. Providers of these courses will give you stock trading manuals and other resources. You can keep these educational resources for further studies and could also serve as your guide when you start investing money on the stock market.

Educate Yourself

If you do not want to spend money on formal stock trading courses and trainings, you can also self study to educate yourself. There are lots of stock investing websites that offer free pointers and tips for investors. Just make sure to choose highly reputable sites so you can get accurate information and valid market assessments.

If you will self study, the best educational resources for stock trading usually come from the websites of major financial institutions, investment banks, government portals, and blogs of known market analysts. These sites provide expert and reliable stock investment tips.