Never Buy an Already Running Penny Stock

So there you are, sitting down in a comfy lazy-boy chair, and all of a sudden you get an alert on your mobile device about a penny stock that you should buy. By the time you get around to researching it, you see that the stock has already started running. The penny stock is now up to 300% in gains already.  You think to yourself, wow; 300% in gains?  Should I go ahead and jump in?  It looks like huge news came out and it will probably continue running, right?  Wrong.  It is my opinion that if you are serious about buying penny stocks and want to absolutely minimize the amount of risk that you have before purchasing a penny stock, that you should absolutely never buy an already running penny stock.

Why is it that I say that?  Well, chances are that whoever sent you that alert on your mobile device, already has a pretty hefty number of shares that they are trying to offload on you.  The 300% in gains sounds really good, I know.  But chances are that the front loading penny stock traders that purchased this stock before you are the ones that are up 300% and will probably be looking to exit their position sometime soon.

The information that I have thus far covered, talks about some of the risks associated with buying an already running stock. What I will go over next, is taken directly from our “Ultimate Guide On Penny Stock Trading“. This Ultimate Guide just mentioned, provides solid information for both novice as well as intermediate penny stock traders. To check out this guide, please click here:  How To Invest In Penny Stocks For Beginners.

Never Buy an Already Running Penny Stock

If you come across a Penny Stock that is already running (you can easily tell if a penny stock is running by taking a look at it’s chart), I would recommend staying away from it. Even though this stock might look good for the next (as they say), leg up; there is a good chance that the momentum of this penny stock can turn around and if you would have bought in all of the excitement, that you could be turned into a bag holder (this is somebody that gets stuck in a penny stock because they bought on the end of the stock’s run). To be on the safe side, always buy low and never buy a penny stock that is already running.

Never Buy an Already Running Penny Stock - LearnedGold.ComBy not buying into an already running penny stock, you minimize the chances of losing money.  Just think of it this way.  Example..  Imagine that you find a penny stock (Lets call this penny stock BETA) with the perfect share structure and not a ton of volume for the last 6 months or so.  The chart for this BETA penny stock looks perfect, zero up and down trading over the last 6 months (straight line on the chart). This tells us that this penny stock most likely has good bid support (we see this due to the fact that the price of the penny stock is not dropping below a certain price/per share). This bid support helps keep some of the risk of losing money down a bit.  Coupled together with a few different things that we watch out for, having a good bid support, a decent chart and some other things, helps us keep the risk at a minimum.  If you go ahead and buy a running stock, chances are that there is a very small amount of bid support, and that this stock could lose its legs under it very quickly if things started going south.

I really hope that you have enjoyed the information presented to you here on this “Never Buy an Already Running Penny Stock” page.  If you would like more just like it, please go ahead and visit our Ultimate Guide on Penny Stocks.

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