New Penny Stocks - How To Keep On Top Of Them

Once you are aware of the basics of penny stocks, you can start with the fundamental and technical analysis part of the investment process. Such is the importance of intensive and extensive research on these new penny shares that your failure to undertake it will most likely lead to all your capital running down the drain. And you will not be the first victim either.

But basic research may not be sufficient for new penny stocks for many reasons. For one thing, the companies issuing these microcap shares are on shaky grounds where their viability, solvency and stability as an organization are concerned for the simple reason that these are new to the industry. These business organizations can go under as soon as you have invested your money in them.

For another thing, penny shares are inherently high-risk investments. Pump-and-dump schemes are common for these non-marketable securities, among other fraudulent scams and schemes, so extreme caution is essential.

With that being said, here are a few secrets to choosing the new penny stocks with the highest potential for profits. These useful tips should reinforce the results of your research.

Volume - Penny shares with the highest increases in volume deserve a second look. This is because other investors are already in on the profit potential of the stocks such that you will be foolish not to see what the fuss is all about. Take note that the emphasis is on seeing, not investing immediately on the nano stocks since the increase in volume may be the result of a pump and dump scheme.

You can use a mathematical system to identify the penny shares with the highest increases in volume even before the other investors have arrived on the scene. Be sure to invest as soon as the computations point to good potentials even before the herd comes along to take advantage of these new penny stocks.

Stockbroker - Your choice of stockbroker has a significant impact on how well your trades go. The right stockbroker can provide for the best techniques, technologies and tools to make the right decisions for penny stocks.

Better yet, you may have the benefit of a stockbroker alerting you to the profit potentials of certain new stocks on the block. This is the time when the commissions you pay to the stockbroker work to your advantage.

Hype - Often, the issuing companies of the penny stocks will hire public relations firms to create hype for the new issues. You can then be alert for the first releases of the marketing hype and then determine if there is substance to the hype. Watch the SEC filings for new companies and you may just find the Next Best Thing.

In the end, these new penny stocks must be approached with hope in your heart but with plenty more of skepticism in your mind. Keep in mind that emotions have no place in investing and trading in nano shares but if your gut instinct tells you something, we suggest taking into account its opinion in your final decision.