Edward Day - Penny Stocks Trading for Beginners: Build Passive Income While Investing From Home

Penny Stocks Trading for Beginners: 3-Hour Crash Course

Build Passive Income While Investing From Home

Edward Day

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Introduction

M arkets are never wrong opinions often are. - Jesse Livermore

How would you like to make a million dollars? Well, of course you would! One of the reasons you picked up this book is probably because you heard of the enormous potential penny stocks have when it comes to increasing the size of your wealth. This curiosity has led you to study more about this topic.

Financial markets have been one of the biggest creators of wealth in America over the past century. Over the years many ambitious people have been attracted to them in the hopes of making a large amount of money. However, the sad truth is that many of these people dont do well.

A study conducted by brokers reveals that over 90% of traders end up losing their entire trading capital within a year of opening their accounts (Rodriguez & Rodriguez, 2016). Why does trading have such a high failure rate? What is it about the markets that causes intelligent people to lose money like this?

More importantly, what do the 10% do that the other 90% don't? Do these 10 percenters have special knowledge? Well, yes and no. They have special knowledge in the sense that theyve figured out how to think about the markets in an intelligent manner. Otherwise, theyre no different from any one of us.

All theyve done is learn the right way to do things. You too can learn these methods and achieve the success that they have experienced. I must warn you, though. This is not a book that will teach you a get-rich-quick scheme. My personal belief is that such schemes only result in tears.

In this book, Im going to introduce you to a powerful asset class that exists in the market. Ill give you the tools needed to trade them well. Ill also show you how you can unearth them easily. Finally, Ill show you how you can go about analyzing them and place intelligent trades.

While Ill show you everything, its still up to you to go ahead and place trades. Youll need to do your homework and work hard to find these opportunities. You cant expect someone else to do all the work for you and you cannot expect this money to come to you easily.

When it comes to trading, the person that works the hardest wins the most. The markets dont care about your background or your education level. They do care about the amount of work youre willing to put in and it rewards those who have done their homework.

This is the task that lies ahead of you. So having said that, why should you choose to trade penny stocks? What makes them so special?

Rewards and Time Invested

L ets say you have two investment opportunities. They both require you to spend equal amounts of time on them. The difference is that one pays you a 10% return while the other pays you 200%. Which one would you choose?

The second opportunity is a no-brainer in this case! If you need to spend a lot of time working on an opportunity, it makes sense to get paid as much as possible! This is what differentiates penny stocks from other trading instruments such as regular stocks and Forex.

Lets say you decide to trade the stock of Amazon, which is priced north of $1,500. If this stock moves $20, thats a 1.3% move. This is significant. If you managed to capture that gain in a day, youd have had a decent trading session.

Now compare this another stock that is priced at $1. Lets say this stock moved by 50 cents. This is a far smaller move numerically but in percentage terms, its huge. Its actually a 50% move. Which move would you rather capture? A 50% move or a 1.3% one?