You can turn $500 into thousands of dollars trading penny stocks. We've proved it to you on our instagram @pennychats. Quite often, over the past months we have found high volume penny stocks, threw a few hundred bucks in and came out with $300+ bucks profit, this is what you call a 100% return on investment (ROI).
The trick to doing this is finding a stock with good volume and studying the intra-day support levels and resistance, it's that simple. Most people think they need to pay hundreds for trading courses, but quite honestly, everything you need to know is on the Internet and it's free.
You will find people trying to teach you hundreds of strategies but once you learn basic trading terminology and how to read chart candles, you're off to a good start. There are hundreds of teachers out there, people selling training and education, but 95% of traders lose money. It is conclusive to guess 95% of traders have not learned or not all strategies apply to every-day trading.
Plain and simple advice is to search through Investopedia, learn all the basics of trading and chart reading and then do some paper trading. Paper trading will be nothing like reality trading because the emotions of losing and winning will be totally different, but the fundamentals can be learned.
It is best to start with a small amount of money. You will find most guru traders use large amounts of cash to profit gains quicker. For example, trading with $30,000 dollars and buying 5,000 shares of a stock trading at $6.00 dollars, the exit of the trade can be sooner than someone trading with $1,000.
At just .10 cents gain ($6.10) Trader A has just made $500 for a little under a 2% return, even a 10% return is $1,500 with $30,000.
Trader B with only $1,000 can only purchase 166 shares and the stock price would have to gain .60 cents ($6.60) just for Trader B to see $100 which is a .10% return.
It is clear to see how trading with a small amount of money affects a traders confidence and results in the market. Also when you are trading with less than $25,000 you are limited to 3 day-trades within a 5 day period. These restrictions and constraints will highly determine your success and profit margin in the stock market.
It is very easy to make thousands a day if you are working with $30,000 or more ,but if you are not, then you will have to get lucky or be very disciplined trading. This is not including the fact that you will need a bull market to see consistent 30% gains on average, or it will be a lotto to catch a 100% or more stock here and there. You may sight a stock trading under $10, move on average 10 - 20 percent a few times a week, in a normal/bearish market. However, in a bull market, one can see 50% at least twice a week.
To make money in the market with $500 is a matter of discipline and research. You can know all the strategies in the world, but if you are not in the right stock, at the right time, the strategy cannot be exercised, or if your in the wrong stock at the wrong time- look out below ( TIMBER !! ). Yes- big guys lose too, the more money someone has, the more they are prone to lose. Traders throwing $30,000 in a stock, also take $5,000+ losses. You don't want to be them.
Take your $500 and invest it in a stock of your choice, that you have researched and you believe in the service/product and the companies operations.
If you are a trader looking for quick money, as most are, you can find a volatile penny stock trading under $5 and ride the wave.
Most people turn to penny stocks because it requires less money and you can make a larger return for your small investment.
Throwing $1,000 into AAPL will not do you much in a small amount of time on a regular trading... Login To Read More