Prof. Tyler yamazaki

Chapter 2
Getting Into the Trade
Now that you know a bit more about working with Penny Stocks, it is time
to work on putting some money into the Stocks that you would like to use
and making sure that you get the right Stocks that will help you to make the
money that you would like from this type of investment. This chapter is
going to help you learn how to get started with Penny Stocks so that you
can see the profits that you want in no time.
 
Opening Your Account
The very first step for you to do when starting on Penny Stocks is to open a
trading account. As an investor, you need to consider how easy it is for the
account setup, the customer service with the account, and any fees that are
associated with opening and running the account. There are times when a
broker will choose a fixed rate for a smaller amount of shares but this rate
can increase when you trade on more shares; depending on the type of
trading that you do, this could make a big difference in the profit that you
make.
The good thing about working on a commission per share idea is that it
works well for investors who want to get into Penny Stocks but who don’t
have a lot of extra money for it. As an investor, you will need to shop
around in order to find the best brokers and the best trading accounts in
order to maximize your profits so take the time to look around and talk to a
few different brokers to determine which one is the best for you to get into.
 
Picking Your Penny Stocks
When you are ready to find a Penny Stock and make a decision, you will
need to choose from either the Over-the-Counter Bulletin Board or from the
Pink Sheets. You will find a list of Stocks that are available for you to

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purchase and you can do your research and pick the right ones. Some
brokers will provide you some screening tools so that you are better in
terms of picking the Stocks in line with your risk tolerance level and your
investing strategy.
Since Penny Stocks are a very volatile investment, it is possible to make a
lot of money from your investment, but it is also entirely possible to lose a
lot of money in the process as well.
There aren’t a lot of people who invest in Penny Stocks, some of the market
players include money managers, index funds, and various mutual funds,
which is one of the reasons why Penny Stock market is so volatile. Since
there aren’t that many investors that go with this option, you may
experience liquidity problems at times. You may not be able to sell some of
the Stocks that you own because there just aren’t enough buyers available
who would take your Stock at all, much less at the price that you would
like. You may have to take a big loss and sell them at a much lower price
you would like. But there is also a possibility that these Stocks will go the
other way and you are able to sell them at a much higher value than you
purchased them. But it is the job of the investor to decide which way this is
going to go before making a purchase of a Penny Stock.