Stock Market For Beginners » Step By Step Guide

Best Penny stocks – The stock picking tips to unearth the hidden gems

admin — Thu, 17 Sep 2009 12:14:13 +0000

The best penny stocks list is not something that does not come easy and simply because of the fact that penny stocks by nature are very very risky. They do not have the usual listing requirements as far as NYSE or NASDAQ is concerned and that is why the challenge for the screening of the penny stocks is there.

What are penny stocks?

The penny stocks as the name suggests are the stocks that have the price which is in pennies. Well let us not take pennies literally as these stocks at times may have the market price which is more than a dollar. The main thing to note here is that they are traded on the OTCBB (Over the Counter Bulletin Board) and Pink sheets.

These stocks are designated as those which have a price which is less than $5 and also these stocks generally do not have the necessary mandatory listing requirements as required by companies which have good stock prices.

Tips for picking up penny stocks

Risky markets

For people who are trading in the penny stocks segment make sure that you know the basic rules for the penny stock investing

These are risky investments and hence you need to tread very carefully and without proper research the challenge is always twofold. You may miss out a great opportunity as you may not have the best information and on the other hand this will hamper your research. The flip side is also true that you can make good money as there is no information and if you are able to dig out the information then you will have the stocks that can give you returns which will be simply stupendous.

So invest in penny stocks which have substantial volume and are a bit liquid. Make sure that you have penny stocks that have some information provided about them.

As far as possible stick to stocks which have price between .05 and 2 dollars. Yes that may seem high but using this criterion you may avoid the risky bets.

Track your stocks everyday

Each day is a new beginning and you may be able to help yourself out of tricking situations by active monitoring of your penny stocks. This penny stock market is volatile and it does not help that you are not aware of the daily happenings in the OTCBB. Any news can impact your portfolio badly.

Let us see the top penny stocks which were there on Sept 16. These were IPWG, EXPH, NUBL.

Then the great penny stocks that were there on Sept 15 were PMAH, RKLC, HTDS. Each day throws up very different stocks and each of. So, daily trading and monitoring is a must to make money in the stock market.

Promise of returns and risk along with

The penny stocks can provide good returns but the challenge of having no information is always there. The penny stocks in the biotechnology sector are among the most happening and how do you track those? Well check the news about new drug discoveries and FDA filings to know which company is active. This is the trick. The information will not be given to you on a platter. You need to find good sources for that. There are several online penny stock forums and penny stock newsletters that can give you hot and buzzing stocks.

I am not sure if you can trust them or not.

Experiment with some small amounts on the recommendations given out by these pump and dump newsletters and see what happens. Chances are that you may be able to refine your strategy of making money through these. The majority of the times it is the few individuals who send out the letters who will be able to make money. So tread that path with caution.

Analysis using stock screeners

admin — Tue, 25 Aug 2009 14:29:27 +0000

Finding the right stock to buy can be an arduous task for any investor. There are approximately 20,000 public traded companies in United States. You can even count them, then how can you analyze them and find the best ones out of these? This is where stock screeners come in. Analysis using stock screeners is one of the best ways to shortlist the potential companies of which the stocks can be bought.

What is stock screening?

Stock screening is a process of searching the companies which satisfy a given financial criteria. It can be used to do technical analysis of stocks. These criteria is different for each investor therefore it is impossible to set one set of rules to search the potential companies. Stock screeners use a search engine which will take the criteria provided by the investor, then it will search the database having all financial data for all listed companies. Then it will throw out a list of companies which match the given criteria. It is very useful for the investors since most of their research work is done and now they can concentrate on only a few companies to do further research.

The stock screener search engine can take any parameter from the financial terms. For example, you can give criteria like – a large cap company having P/E ratio less than 15 which is at its all high high currently. This is just an example and you can give any number of parameters.

The stock screeners can be used to shortlist companies based on any tangible variables like market capitalization, revenue, volatility and profit margins, as well as performance ratios such as the P/E ratio or debt-to-equity ratio. It cannot be used for non-tangible or debatable criteria like best services or best products.

Most Popular Stock Screeners

There are various stock screeners available over the internet. But there are 3 websites which are most popular in providing this service. These websites are Yahoo Finance, MSN Money and Morning Star. And the best part is that all these websites provide this service for free.

All these websites provide a basic stock screener as well as a advanced stock screener. Basic stock screener has some pre-determined set of parameters which can be used to shortlist the stocks. This screener is not customizable. Most of the time this screener is sufficient for the analysis of a beginner stock investor. The advanced stock screener is very customizable therefore it asks for more data to be fed from the user. It will basically ask for 3 things – the criterion (the variable), the value and the condition.

Analysis using stock screeners is very helpful when you know your criteria for choosing the company stock but you don’t have time to research all companies in that sector/market cap.

Steps to Invest in Stocks For Beginners

admin — Fri, 26 Dec 2008 03:05:46 +0000

As a stock market investing for beginners learning guide the most important thing that you need to know is that what initial steps you need to take invest in stocks as a beginner.

I will list the things here and will follow that up in my posts later on each topic and in fact some of the topics I may have covered in my earlier posts also and I will link to those if needed.

The list of steps as outlined here are

1) The first and foremost you need to understand how the stock market works

2) That translates into NASDAQ Definition

3) Also Dow Jones for beginners

4) Stock Symbols

5) Then you need to think about what kind of risk are willing to take and that usually means

6) Your Investing strategy – Long term versus day trading versus forex market

7) You need to understand the stock market terms and glossary

You should start reading the Wall Street Journal and other investing related magazines

9) Learn about full service brokers and discount brokers and you can learn about brokers for beginners here.

10) Learn about what are penny stocks

After you have learnt about all the above do not fret too much what you have not learnt and rather take it easy as that way you will be able to enjoy the stock market rather than it be a painful thing for you.

The next few steps as well advice is

1) Select a discount broker and put some money in the account.

2) Select a good stock to trade in and put a buy order and that means you should know about good stocks or rather large cap stocks as well as mid cap stocks as well as what are blue chip stocks

3) Also then you should know what is a limit order versus what is market order

4) Then click the buy button and sit and relax. The buy order will be executed.

The next few steps after the stock has been bought are

1) You will need to monitor the stock and that will usually mean either you go to www.cnbc.com or to any other financial market site.

2) You can also use a stock market ticker to make sure that you have the best of the information at your desktop and that way you need not log on to the website every time.

3) The stock if it goes down is an opportunity to buy more if you are a long term investor and is a call to stop your loss if you are not waiting for long term up trends to start. Herein lies the difference in strategy that you have employed.

4) Next comes the decision to sell if the stock is rising and is way ahead of the purchase price. You can either sell it to make good profits or you can buy more thinking it will appreciate all the more. At this point you need to decide what kind of profits do you want an exit the stock.

5) Assuming that you sold the stock the entire set of transactions buy as well as sell will reflect in the portfolio and that portfolio will also tell you how percentage gain you made or percentage loss as well as if you have more than one stock then it will tell about what is the overall gain or loss percentage.

Once you are familiar with the entire process then you will have to think about investing more money and also diversify your stock picking so that you have good defensive stocks which and also some stocks which will give you some good amazing profits over the short period. These stocks may be more risky than the others but that is why they say that stock market is not for the faint hearted.