Many people want to buy penny stock to get a quick increase in profit from there investing. The good news is that this is a very possible way to make extra money from your investments. The bad news is that, if you wish to buy penny stock, you have to be very careful in your investments as they may have to opposite effect. I am going to explain to you some of the ways I find great investment opportunities in penny stocks and why they work so well.
First of all, let me give you this warning. If you plan to buy penny stock, then you must be able to stay calm. Penny stocks can be very volatile and it can be nerve racking from time to time watching your investments shift. This is normal and if you follow the guidelines I am about to give you, then you should have no problem making very profitable investments very often.
My main method of investing is called trend trading. It is very simple yet very powerful. Basically what you do is find a stock that you might b interested in. You then bring up a 2 year or more history of its stock price. You look for any patterns that appear in the history. Not all stocks will have them, but sometimes you can find a very obvious pattern that you can use.
Now that you have a pattern, you can use it to buy penny stock at the perfect time. For example, say you find a stock that rises gradually for about two months, then drops back down to its low price only to start it rise again. This is a great trend because now you know to invest in this company after the drop. You are in a very safe investment because it will likely continue to follow the trend.
With this strategy alone, you can really generate some great profits and start to increase your investment size to make even more money.