There are thousands of companies which trade via OTCBB and pink sheets and finding the right ones can take a lot of time. Investors must know what to look for so they don’t buy stocks from companies which are nothing more than a front for a scam operation. How can you avoid falling into this trap? Set up an account with a trustworthy company who sends out regular penny stock alerts.

Penny stock alerts are designed to help investors choose the right stocks to purchase. Before stocks are recommended all companies have been carefully examined and vetted to ensure they are a legitimate and are making a profit.

Here are a few other ways you can make great penny stock picks:

Ignore The Hype: Don’t believe what you read in the news. Mainstream media outlets don’t study the markets. Reporters recommend stocks to buy with little or no understanding of how the stock market works. Pay more attention to the trading price actions which indicate whether the stock is a good by or not.

Study Market Trends: Learn to identify what makes a penny stock worth buying. This will be based on a company’s track record, financial trading history and how long they have been in operation. Enterprises which suddenly appear on the pink sheets with no history should be avoided. You are likely to be caught in a pump and dump scheme and lose a considerable amount of money.

Small losses are a normal part of trading on the penny stock market. Mistakes do occur and sometimes the stock doesn’t reach the prices investors were hoping for. Selling the stock before more losses are incurred will teach you a valuable lesson.

Join A Brokerage Site: These sites have a lot of safeguards in place for investors, which include: blacklist alerts, fraud alerts and current trends occurring in the marketplace. This feature saves investors money as they immediately know which companies to avoid.

Online brokerage sites also offer members a range of tools to keep track of investments. Probability calculators are ideal for new investors, who are concerned about purchasing stocks. Profits and losses are calculated based on market trends which allow individuals to see what will happen should a sudden market fluctuation occur. Tutorials, webinars and podcasts are other tools which help members become better traders.

Investors can learn from one another via forums and online chat rooms which are part of the online platform. New investors can read posts from long-term penny stock market players and gain valuable insight into how they choose stocks.  These individuals have a combination of finely honed skills, good instincts and great timing. Take note of what penny stocks they are buying and selling and follow their lead. It’s the fastest way to learn about how to buy great penny stock picks of your own.

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