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What is the otc market how to trade to make good profits


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  • 1. What Is The OTC Market? How To Trade To Make Good Profits?
  • 2. There are always lots of opportunities to make quick and big bucks in the today's equity market, OTC (Over The Counter) is a very good example. To trade in the OTC Market can be lucrative if you do it correctly, but like any investing it carries risks if you do not discipline yourself strictly.
  • 3. If you want to be outstanding in the OTC Market, before going to this most profitable, or on the other hand, the most risky game, learn and master the skills. Then you will be putting yourself apart from the crowd of impulsive traders with no plan and no direction.
  • 4. I am sharing you my experiences of penny stocks trading, and hope this will save you your valuable time and hard earned money.
  • 5. I will make it easy to give you a better understanding of the trading.
  • 6. First of all , how does the OTC stock market work? Before answering this question, what are penny stocks? Penny stocks are stocks trading under a value of $5 each share. These are usually small caps companies in the market and generally are those small start-up companies, which are newly listed reverse merger companies. Or can be those struggling companies currently trading for pennies. And the OTC markets work very much different from the NYSE or the NASDAQ. Most companies which are traded on this market are usually much smaller companies and much more volatile. A stock which has a value of $0.005 each can easily rocket to $0.01, which is a 50% increment, whereas you are very difficult to find a stock goes from $100 to $200 overnight.
  • 7. We already know that the payoffs can be very huge to trade in the OTC market, but what moves penny stocks to such a tremendous gain? With the fundamental and technical you have learned, and along with scouring for news releases, you can always decide where to park your money. On the contrary, penny stocks rarely follow the conventional pricing formulas of the large cap companies. To this reason, we cannot rely on the same strategies to find companies with good value or growth prospects. Since these companies are not on the radar of the mainstream or research analyst for the big investment firms, therefore, they have problem to attract investors to buy their stocks even they may have attractive prospects for the future .
  • 8. So how do we discover the real diamond from the coals? In fact, investing in penny stocks is all about momentum. And the greatest builder of momentum on the penny stock market is Company Promotion and Advertising Campaigns. Companies spend millions of dollars on IR/Media firms for advertising campaigns in the form of newsletters and Internet banners to increase investors’ awareness. Whenever investors read these ads, and like what they have read, and invest, then we will see a rise in volume and price volatility. When the volume increases, forums and traders scans start to buzz about the ticker and momentum will continue to build until finally there are no more buyer left and the stock may drop or just lose it steam for a while. And now it will depend on whether the company really does have good future prospects, and it is now on the radar of more long-term investors. But my good advice is if you are on these new campaigns, you just quickly get in, make the money and get out of it.
  • 9. Like any type of trading, there are always mistakes you must avoid, and to trade in the OTC market, you must avoid 5 mistakes, they are :
  • 10. Never trade with the money you cannot afford to lose. As you are already told, penny stocks are very volatile and can have major price swings into either positive or negative in a blink of eye. Not one trade is guarantee, so never trade with money you cannot afford to lose. Furthermore, it is not wise to put your whole bet on one trade as stock trading is a numbers game, and we want to be around to fight another day no matter what the outcome of any trade.
  • 11. Don't do trading without a well-organized plan. Like doing anything, we need a good plan to avoid or minimum the mistake. So plan before you enter a trade. Because once you are in a position, your emotions of trading can be controlled and cloud your good judgments. So have your clear profit taking price as well as a stop-loss price. Identify your reason to take this trade, and if the reason is no more there, get out of the trade.
  • 12. Always remember to put a stop-loss. Never trade without a stop-loss. Once you are in the position, you MUST put a stop-loss to protest your capital. This is especially true to play penny stocks. You can limit the amount of lose on one trade. It is also very individual where you want put your stop. Since the price is so small, for example, if you are filled at $0.01, then your stop can be at $0.009. If you are using 50% of your account on this trade, your stop can be at $0.008.
  • 13. Not to be overconfidence. A very big mistake most traders make is they are always overconfidence. Traders may sometimes have a few winning trades in a row, then they think they have worked out the markets and forget about their discipline and their plan. They may start to trade blindly. A golden rule to every trader, please be strictly discipline and not to get greedy. Look at your long-term benefits.
  • 14. Book your profit. You must always be ready to take profits when they are there. You may not like to cut your profits short, but penny stocks can always turn anytime, so don't be GREEDY. They are always some ways to accomplish this, and you can do as follow. - Set a trailing stop that moves higher as your stock gains in price. -Or take partial profits at various prices. -Or having a certain price target where you will get out of the trade.
  • 15. There are some more things you have to pay attention when trading in the OTC market: - Your self-discipline is at most important when you trade high risk penny stocks. - Trade with a reputable online broker whose charged low commissions.
    • Set up your trading strategies, a buy safe entry, and once enter put your stop-loss.
  • 16. Discover The Profit-Pulling Wall Street Trading Secrets They Don't Want You To Know About... ==> Grab Your FREE “Developing A Trading System” Report Now! ==>