How do I get started in penny stocks?

Question

I want to get started trading some penny stocks. Are there any websites that let you do it w/o paying a monthly fee or anything?

Thanks for those great answers! Lots of stocks start low then sky rocket.

Answer 1

Scottrade will open an account with as little as $500.00. I would not begin investing in penny stocks until I had more mainstream investments first. Obviously penny stocks are not as regulated and they are not very liquid - plus most of the "pump and dump" scams happen with these stocks. It may appear cool to own 100,000 share of a stock trading at $0.05 but it could be better to own 100 shares at $50.00. Just my opinion.

If you can afford the complete loss of your initial investment..good luck.

Answer 2

Penny stocks are the worst investments for a first-time investor. They are highly risky. I've done research into hundreds of different penny stocks and most are overvalued. Even though it's selling for $0.04 a share its true value is actually $0.0015. Additional info: If I were you I would learn how the stock market works. Read some books on the subject. There are basically 2 types of investors. 1) Fundamental analysis- They look at the companies financials, who's their management, the future of the company, etc. They believe that a stock can be overvalued or undervalued. 2) Technical analysis- They believe the fundamentals of a company doesn't matter. They believe everything about a company is already priced in the stock price. Their belief is that a company with really good fundamentals can still fall 50% or even if a company that is losing money can actually make huge profits for an investor. If you look at Arena Pharmaceuticals, Inc. (ARNA), it's been losing money but in the past few months it went from $1.50 to about $12. The technical analysis that noticed that trend and bought even $2,000.00 worth of shares at around $2 per share would have made about $12,000.00 in just a few months. However, I stick to fundamental analysis and use the Discounted Cash Flow as a starting basis when researching stocks.

Answer 3

For a smaller investor probably a discount brokerage account. Google discount brokerage - there are several.
( I know you didn't ask this part - but I can also tell you how most people end trading penny stocks - they lose all of their pennies) It is high risk but can be fun. Just make sure you are "investing" money you can afford to lose.

Answer 4

Some of the best traders at http://www.top10traders.com have some great ideas on penny stock investments. You can see who the best traders are here:

http://top10traders.com/Top10Standings.aspx

You can see the latest trades here:

http://top10traders.com/StockInfo.aspx

This site is totally free. Hope this helps.

Answer 5

good luck with that. penny stocks have low values for a reason.

Answer 6

no such thing as a free lunch.

Answer 7

Zecco.