1. Never put all of your eggs in one basket. Even the best stock in the world can be risky. Spread your investments around in several stocks and refrain from using a large portion of your account on a single stock.
2. Always have settled funds in your investment account! The worst feeling in the world is seeing a perfect stock buying opportunity and having no funds to make the purchase. A simple guideline is to never have more than three-fourths of your total investment account balance tied up in stocks at a time.
3. Make trades of at least $500. Any less would defeat the purpose of investing, as commission costs would eat up any profits. For instance, if an investment of only $100 was made and your online investment company charges $10 per trade, you would have to make at least a 20% gain to break even. On the other hand if a trade of $1,000 was made you only need a 2% gain to break even.
4. At the bare minimum we recommend a start-up investment account balance of at least $1,600. This way you can hold up to 3 $500 stock positions at a time and the extra $100 would cover broker commissions. However, an optimal minimum account start up value is $3,200 so as to abide by the guideline of holding less than three-fourths of your investment account balance in stocks at a time as highlighted above in tip #2. Note that the only style of trading recommended would be trades that last more than a few days. Intra-day trading would require additional funding to avoid day-trading restrictions on trading.
This is only the tip of the iceberg. The above tips are only basic guidelines and there is much more detail involved in our trading strategies. Trading penny stocks and getting positive gains from them requires a bit of experience. Luckily we are here to provide information to help you gain this knowledge quickly. Keep an eye out and visit this blog often for strategies in making real money in penny stocks.
