When to vend Penny Stocks

Penny Stocks is traded by many investors for a secondary income. Investors prefer these stocks for making passive income as they do not need you to be continually watching over them. But the main problem that many investors face in these stocks is they don’t know the right time to sell.

The costs of penny stocks rise very rapidly but they also fall rapidly too. Hence make all of your stocks buying and selling on sound research of the market and the companies’ recent record. While buying you consider what is the company’s profitability rate, whether they are pretty nearly, or have just declared profits, losses or new patents, discoveries and products.

For making profit in the penny stocks market, you must know the right time to sell your stocks as getting it wrong can be deadly. Usually many people put their best efforts for research to know what stocks to buy. But they do not pay attention to researching to sell stocks. Rather, they let their emotions hold the fort and sell at the incorrect time. Investors selling at the “wrong time” can be divided into two categories such as, The Runners and The Sitters.
The Runners are fond of making profit too early. When they see their penny stocks increase a little, they sell it because they don’t want to take much risk. These people start to earn a 25% Return on Investment and finish up taking profit at 1%. Frequently, as soon as they sell a penny stock, the stocks will rise even further and they’ll be questioning why they sold before time.

The other type of traders’ trade penny stocks with their emotion. They do not want to let get it wrong a losing position because “it could bounce back any day now. Hence they hold stocks for a long time in the hope it will rise in future. When they want to sell their Penny Stocks - there is almost nothing left.

If you want to be a winner, you should separate your emotions from your investment decision and will also research when buying and also when selling. They will buy and they do not fear to sell.