On Line Stock Trading: Small Cap & Micro Stocks Go Up and Down - How Can You Profit

Success in small cap & micro cap stock trading like with any other business in life comes from being able to see the big picture and from paying attention to the small details.

Let's say for example that you are a business owner and you have a jewelry store on a given street just like the guy in the other corner does, but still the other guy is making 5 times more profits than you are only because he's doing something different. He knows something that you still don't and that's what makes him more profitable.

The funny thing about this kind of situation is that you could be just a small distance away from being as successful as he is.

We know that day trading small cap stocks with momentum is not the only way to make money in the stock market. But it can be the fastest way when you do it right.

We also understand that a lot of people shy away from short term momentum trading and think that only a few traders can profit from it. It's true. Only those short term traders with proven knowledge have the ability to profit consistently when stocks go up or down.

You don't necessarily have to trade small cap stocks with positive or negative momentum all the time. But you can learn how to take advantage of them when you encounter with the best opportunities and at the same time limit your risk.

Visit us today at Profit From Penny Stocks http://www.ProfitFromPennyStocks.com and learn more on how to pick small cap & micro cap stocks stocks that you can short or ride all the way up on momentum every week

Stocks can always go lower

Sinking Ships - When a stock has dropped a lot you may think that, "it can’t go any lower," or that it is "a good bargain." Especially with penny stocks, you need to avoid this type of thinking because many sinking ships don’t ever rebound, and they can go lower, and they aren’t good bargains just because they cost less than before. I've seen stocks simply disappear from view and never recover.
Always check the underlying fundementals - especially return on assets managed. If it's not stable or going up then walk away.
Kevin Bauer
http://www.stocktradingresources.net

Watch out for the Hot Tip

In almost every instance that I have lost money on penny stocks it has been because of a hot tip. They can be seductive - and if given by an apparent authority such as your broker, can be very difficult to turn down. There are actually professional promoters who make a very good living generating and nurturing rumors about some penny stock that’s guaranteed to go through the roof. The entire concept hinges on the rumor being spread from person to person, at the office, over the phone, or at social venues. The promotional ploys can be very costly for investors who get involved without special knowledge about the company or the actions of the promoter. In most cases if a stock really is going through the roof you won’t hear a word about it, because a select few individuals will be very intent on keeping the information to themselves. Run away from hot tips. genuine hot tips are taken up by those close to the source long before you get a chance to get involved.
Kevin Bauer
http://www.stocktradingresources.net

Beware the Salesman

Beware of the phone salesman attempting to peddle his investments over the phone. Care should be taken - they could easily be predators looking for the unwary or careless investor. They often use high-pressure sales tactics, and persuasive arguments. However, they are not doing you any favors, no matter how good they make an investment sound. They are often operating in their best interest to dump over-the-counter stock on you, and the money you pay in will go into their own pockets, or the pockets of their company. I was once told by an investment guru that if the investment was that good it wouldn't need salesmen. This same guru ended up in jail for fraud - having done that very same thing. But I am convinced that poor or risky ventures definetly do need salemen - so be careful. Always assume the worst.
Kevin Bauer
htp://www.pennystocktrading.net

Small cap Stocks often overlooked

Professional analysts aften overlook the smaller companies.

They either don't generate enough broking fees or they don't

offer a large enough stock volume to make up a decent size investment.

Remember that the big investment houses are looking to move

large volumes of investment capital - and the small cap stocks

are just too much work. This opens the door to the smaller inverstor

who may be quite happy with a more modest amount of cash invested.

Kevin Bauer
http://www.pennystocktrading.net

Penny Stocks and Risk

Making money from penny stocks carries a degree of risk.

It is essential that proper due diligence is taken in stock

selection to ensure a decent return on investment.

Too often this is overlooked because the purchase value

can be relatively small. Nevertheless - the objective is profit -

not loss. And the losses can quickly mount up.

Why should I use penny Shares to build wealth?

A strategic question. Why indeed?

1. A penny share would usually refer to a share available for less than $1.00. This makes the aquisition of shares manageable by even the most modest investment budget.

2. The London Business School’s research indicates that generally the smaller companies outperform their big brothers every year (except in the depth of a depression). This provides a measure of reassurance for the novice investor of modest means. Provided the share selection is made carefully, the investor seems more likely to see frequent upturns in the share value.

3. It stands to reason that the best of the smaller companies will shine the brightest. This tends to be because the smaller companies are generally more focused, react quicker to changing market conditions and often better organised and run more economically. Decisions are taken more quickly and results are usually measured more objectively. They don't usually have the enormous resource cushions that the big companies have - and sometimes use to hide deficient performance.

4. The big investment houses and mutual funds often overlook the small cap shares. They either don’t generate enough brokage or are not available in large enough quantities.

These factors offer attractive opportunities for the small investor. Provided he picks wisely.

Kevin Bauer is a keen investor in Penny Stocks and provides a article resource for other interested investors at http://www.pennystocktrading.net

What's a penny stock

More details later - but simply a stock or share that generally costs less than $1 to buy