How to buy stocks for beginners? Who trades penny stocks?

Today we will take a look at the how to buy stocks for beginners matter. Details below. In most cases, speculators are picking up and buying penny stocks due to high volatility, meaning that prices are highly volatile. It is not uncommon for fluctuations, which are at 2-digit percentages and above. Speculators can thus earn profits that are more than 1,000 percent. For example, one share costs 0.001 euros and is sold for 0.010 euros.

But then the 1,000 percent increase is not based on the outstanding performance of a new management or a new business model, but on the demand of the paper in appropriate amount by speculators. The dangerous thing is that even small investors are blinded by such papers and their options. You see the tables with penny stocks on the Internet, which show exorbitant growth rates in positive territory. And the cheapest prices in turn lead to the purchase of large quantities. This provides for additional demand and thus for price increases.

How to buy stocks for beginners?- Information

The other tables with the price losses, there are also, they include a mirror image of the losses to the profits. Due to the low trading volume on the stock exchange, it is mostly the small investors who can not sell everything fast enough and can be happy if they come out of the business with plus or minus zero. Most of the speculation with penny stocks ends in losses.

How to buy stocks for beginners? Where do we find penny stocks?

There was a time when we found penny stocks at the market. In July 2001, for example, there were more than 10 percent of shares in the penny stock range, ie fluctuating around the value of 1 euro. Stricter delisting rules (delisting: stock market exit, stock market retreat) ensure that today in the regulated market of the penny stock market family as far as possible no more penny stocks are to be found. In the unregulated free market Pennystocks are common.

The reason is the lower cost of a listing in the open market. In addition, the publication of an issue prospectus or even balance sheets in this market segment are not required by law. So it happens that there are a lot of Pennystocks frolicking and waiting for greedy buyers. And if deceived investors invoke the investor protection enshrined in the European Securities Trading Act, then they must come to the conclusion that the ESTA only has limited validity for Pennystocks listed in the Open Market.

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