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Understanding stock percentages %

By PennyChats


Why 100% is not neccessary all the time.

On the big boards 10% may be impressive but for penny stocks most don't see that as enough. Being that most people only throw one-hundred dollars to five-hundred dollars in a penny stock, a 10% gain can profit $50 with $500 in; but after commissions it would seem as a waste of a trade. A fifty-dollar profit is decent and for most people it is a day's work but it's almost certain most are not looking to only make that much in penny stocks. 

When a true penny stock (.0010-.90) runs hundreds of percentages, not all the time does that mean everyone makes that much. Penny stocks normally gap up (open up the next day higher than previous days close) on large runs and whoever held the night before are selling on the gap up. When you see a penny stock up 300% check the volume and see how much cash is in it, some stocks move 300% on very little shares and not everyone is making money. Large percentages normally lure new traders in with hopes of it running even higher. 

The more money you put in a stock, the less percentage gain you have to wait for. If you are trading with one-thousand dollars a ten-percent return is $100 and some are very satisfied with this. Stock percentages are important to know in addtion to your trading strategy. Experienced traders aim for a set percentage amount for risk:reward ratio. To learn the percentage gain/loss you want to multiply your cash amount by your percentage preference to determine what you may expect out of your trade. Plan your trade. For example, a stock is trading at $3.00 and you want to know how much you will make on a 30% gain with $500. First you will place a decimal in front of your percentage (.30) and then multiply it by 500, you will have $150. Next you will determine how many cents it will take this stock to move 30%, so you multiply .30 by $3.00 you will have .90 cents. 

Here is where the point of this article becomes very important. If your goal is to make 30%,... Login To Read More

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