It's a common mistake. Many investors tend to use investing and trading interchangeably, but they are not the same thing. The goals of engaging in penny stock trading are very different than those of penny stock investing.
Let's break it down in a very simple manner.
Penny Stock Trading
A stock trader is someone who buys and sells stock for a very short period of time-could be five seconds or five days.
The goal of the stock trader isn't to plant money into some stock, water it and hope it will one day grow tenfold. The goal is to make some money and get out-to play the swings.
A penny stock trader is interested in the swings-the ups and downs. A penny stock with good volatility is best. It doesn't matter if a stock opened at $1 on Monday and closed at $1 on Friday as long as it bounced around in the middle.
Penny Stock Investing
Unlike the trader, the penny stock investor will buy a stock and hold onto it for a longer period of time-could be a few months or years even.
The goal of the stock investor is to buy a stock and watch it grow to something larger. For instance, if the purchased penny stock was $1 per share today and $1.50 per share in five months, the investor is happy.
The investor holds the stock constantly and therefore all that matters is the buying price and the eventual selling price and not what happening in-between the two.
By in large, those who buy penny stocks tend to be traders-buying stock at $1 today and selling for $1.15 tomorrow and re-buying at $1 the next day. Whether you're a penny stock trader or investor, penny stocks represent a fantastic opportunity for profit.
By Jason A. Martin
Free Stock Research – Your Bridge Into Investment
Navigating the complexities of the stock market can be downright intimidating for beginners and veterans alike. With a fluctuating financial environment and money on the line, the stock market can seem more than a bit confusing and overwhelming. But with free stock research you can begin your foray into trading with educated confidence.
Free stock research is typically offered online by professionals who are well versed in the complexities of trading. The services included in free stock research include the examination of a particular stock, the background of the company offering it, its recent performance, and the predicators of its future performance. A free stock research professional will be able to guide you through the process of trading and offer advice as to the buying and selling of a particular stock.
However, finding a reputable free stock research provider involves quite a bit of research on its own. Go online to find chat forums regarding the subject. You’ll be able to learn from the experiences of others who have been in your situation. Look for those free stock research providers who have excellent credentials and a solid track record.
Additionally, you may choose to visit a professional stock broker to find a provider of free stock research.
Either way you choose to find a free stock research provider, you’ll be happy you did so. The services provided through free stock research will afford you a level of confidence that you need to be successful in stock market trading. Do your research, educate yourself as much as possible, and before long you’ll be trading like a pro.
By Michelle Bery
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