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Online Penny Stock Trading – The Top Rules Exposed

By Mike Rogers_

No one can reasonably debate that online penny stock trading isn’t always a great source of profit. Over time, a lot of people have made money with online penny stock trading, and so can you, but first, it is important to have a proper foundation for your future. For beginners, you’ve got to read on because this article discusses about some rules of online penny stock trading.

Rule 1: Ensure safety of your investments

The field of online investing also has its share of frauds and scams. As a matter of fact, the infamous “pump n dump” scheme exists here, particularly in the special field of penny stocks. Fret not; you can still safeguard yourself from being victimized by following the tips below:

The first online penny stock trading rule is to not mind any penny stocks information from email messages sent to you by people you don’t know. Scam artists like using email to scam people. In addition, you should not trust anyone saying that a certain penny stock will boom the next day. It is better to trust the updates and discussions from reputable stock forums. Do your job of doing your own research. Though there are available resources from professionals in this field, it is still your job to confirm the information you got from them. Don’t trust advertisements about penny stocks. Do you know that there are plenty of illegal companies conducting their fraudulent activities online? Unfortunately, though SEC exists, it is too busy to monitor all these things.

Second Rule: Online stock broker

An online stock broker is needed to participate in online penny stock trading. It is very important to do your first research before deciding to open an account with a reputable online stock broker. You should not sacrifice your investments on capital security fees. Don’t forget that your money is at stake here and while the low fees are really great, knowing your investment is accessible and safe all the time is far better.

Rule #3: Finding Penny Stock Software

While there are available software programs out there that can be used for online penny stock trading, the tools you can use such as those from your broker or free online penny stock trading tools, like Yahoo and Google, are typically enough.

Rule 4: The Online Penny Stock Trading

A lot of penny stocks trade on “pink sheets” or the pink paper those stockbrokers on the floor use for writing the penny stock orders on. These penny stocks are less regulated because they could not be traded with other stocks through big exchanges like NASDAQ or Dow Jones. Instead, penny stocks are bought and sold through smaller exchanges around the world. Those smaller exchanges need less information especially in terms of finances and paper works to make sure they are always on the go. Thus, to avoid this pitfall, it is a good idea to go for cheap stocks that still trade on major stock exchanges.

There you have it – the most important online penny stock trading rules to observe to succeed in this investment venture.

Did you find those tips on penny stock trading useful? You can learn a lot more about online penny stock trading by clicking here.

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Article Citation
MLA Style Citation:
Rogers_, Mike "Online Penny Stock Trading – The Top Rules Exposed." Online Penny Stock Trading – The Top Rules Exposed. 11 Jul. 2010. uberarticles.com. 30 Sep 2014 <http://uberarticles.com/finance/stocks-mutual-funds/online-penny-stock-trading-the-top-rules-exposed/>.

APA Style Citation:
Rogers_, M (2010, July 11). Online Penny Stock Trading – The Top Rules Exposed. Retrieved September 30, 2014, from http://uberarticles.com/finance/stocks-mutual-funds/online-penny-stock-trading-the-top-rules-exposed/

Chicago Style Citation:
Rogers_, Mike "Online Penny Stock Trading – The Top Rules Exposed" uberarticles.com. http://uberarticles.com/finance/stocks-mutual-funds/online-penny-stock-trading-the-top-rules-exposed/


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