A mistake far too many investors make is thinking they can get away with not researching penny stocks because they are so cheap. What you need to understand is that they are extremely risky because of the low price. They are unproven investments or have gone through difficult business or financial periods thus lowering the price. For this reason, here are a few steps to help you properly analyze penny stock chart patterns.
Your first step should be to determine the subject of the penny stock chart. There are different subjects you can choose from such as following a chart that tracks the price or the moving average of the penny stock. Make sure you know exactly what the chart is measuring.
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Outstanding shares are the number of shares that have already been issued on the open market. Outstanding shares include shares that can be freely traded by public and restricted stock. Restricted stock is shares that can not be traded freely, like stocks that have been given to an insider or used in an acquisition. The [...]
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The market cap of a company is the price of a share multiplied by the total number of shares outstanding. If a company has 100,000,000 shares outstanding and a share price of .01 then the market cap would be $1 million.
As a penny stocks investor you usually buy companies with very low market caps. And [...]
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The P/E ratio is a measure of the price paid for a share relative to the profit per share. A higher P/E ratio means that investors are paying more for each unit of income. The price per share (numerator) is the market price of one stock. The earnings per share (denominator) is the net income [...]
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Penny Stocks are traded over the counter (OTC) through quotation services such as the OTC Bulletin Board or the Pink Sheets. OTC or known as OTCBB (Over The Counter Market Bulletin Board), is a regulated quotation service that displays real time quotes in over the counter equity securities. An OTC security is any stock that [...]
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