Investing in high priced shares is a tricky proposition especially if you are new to stock trading and share markets.
Even to professionals share investments present quite a challenge. For those of you trying to get into the share market, penny shares are your best bet. While I intend to discuss penny shares in general throughout this article, I would like to ensure that you understand what a bull market warrants for big priced shares. I also hope to elucidate why penny shares are always a safer yet lucrative option during a bull market.
If you are new to share market, the lingo might seem too fuzzy at times! Bull market is used to refer to a set of securities whose prices go up, all of a sudden. The driving forces of the market could be anything ranging from psychological factors to buying trends. Anyway, the point is during a bull market contrary to what most people think the ‘buy and hold’ policy is not the best alternative. Buying high priced shares and holding them could seem the logical option during a bull market. But after the boom subsides it could be really difficult to find your feet.
Penny shares are inexpensive shares. When you buy them during bull market you can play the market by selling them whenever the rate has increased. Penny shares are easily manipulated and are cheap as well. Their rates can increase enormously in a short period of time. They are easily driven by the market forces and you make a substantial amount of profit during a bull market by investing in risk free cheap shares!
But before you go on a ‘buy and sell’ spree with the penny shares, you must understand certain subtle techniques. The first advice for you will be to buy good volume shares. Other than the fact that they usually have a good spread, they are not easily pushed down or pushed up by market forces. Another selling tip would be to think twice before selling your shares just before a weekend. Weekends are the time when several issues happen passively that affect the market values of the shares. Mondays are usually associated with sudden increase in stock prices. Never lose out on a chance to make a handsome profit.
Another general piece of advice is left to be mentioned. You must know when to enter the market and when to exit. It is easy to get carried away with the fluctuations of the market. But before you enter the market strategize and formulate an entry and exit plan. You must be clear about why you want to enter the market. Technical variables are definite indicators of market forces. It is better to enter the market by watching out for the variables rather than on the advice of market gurus! Finally you must be sure about what you expect out of your stocks. Have a target in mind. Keep a close eye on the market and be sure to pull out when you know you have achieved what you want or when you think you are going to run a loss!
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