Three Penny Stock Investing Mistakes
Few penny stock traders think what happens to their orders after they click the order button. Every time you click the order button, you set in motion a complex series of event that are designed to fill your order quickly and efficiently. Now, your stock broker is acting as an intermediary. What this means is that trade execution can vary from one broker to another. Turn $200 into $100K in just 1 month with this FREE Penny Stock Trading Report that shows how to find killer stocks. Master killer stock selection and market timing strategies with these two FREE Stock Momentum Trading Reports-The Triton Convergence and the Paralysis of Analysis. Watch this weird 30 minutes Stock Trading Nitty Gritty video.Let’s discuss some of the penny stock trading blunders that you should avoid:
1. Don’t Try To Trade After Hours:
Stock trading that takes place after the official close of the stock market is known as the after hour trading. The problem with this after hour and pre-market trading is that the liquidity is thin during these hours. A small volume can make a lot of difference in the share price that you will get during these hours. After hour trading can give you important indication on the direction of the day trades but the price maybe way off. So, you need to avoid after hour and pre-market trading.
2. Don’t Use A Market Order On An Illiquid Penny Stock
You will find many penny stocks that have the potential to give explosive gains illiquid. What this means is that these stocks are not being traded in large numbers and the potential for a volatile price action is there. When you want to trade an illiquid stock, never use a Market Order. A market order gets filled at the market price that maybe far away from what you had anticipated. Always trade an illiquid penny stock with a Limit Order .
3. Don’t use FREE Data Sources
Avoid using free data sources like Yahoo Finance or MSN Money. They may be great to give you the stock quote at a fly but when it comes to serious trading always use the data feed provided by your broker .