How to Set Goals When Trading Penny Stocks
Penny stocks are a great, potentially lucrative way to start making money. But how do beginners create realistic, achievable goals? Let’s start with understanding penny stocks. To understand what to aspire to, you need to first understand how you’re going to get there.
Discover How to Set Goals
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Goals can be anything from paying off debt to making a million dollars. The key is setting a goal with realistic steps that will keep you focused on that goal. Start by asking yourself whether you are you ready to use penny stock trading to achieve your goals. If you are going to be committed to learning how to trade penny stocks and are willing to learn, then you may be ready to set some goals.
Learn How to Invest
Penny stock trading is not your traditional investment because this form of trading does not involve the same risk as other investment types. Penny stocks are stocks that cost less than $5 and usually involve small companies that have a price below $1. Nonetheless, trading in penny stocks still can carry some risks. As a result, you want to be sure you understand how to invest in penny stocks.
Investing in penny stocks involves a risk of volatility. You have to be prepared to see a 50 percent decrease or a 100 percent increase overnight. You also have to be willing to sell quickly to get 20 to 30 percent returns in only a few days.
Make a Plan
Setting goals will get you nowhere unless you have a well-developed plan of how to achieve them, such as, “I’m going to pay off my car by putting away $200 from my profits each week for 10 weeks.” Think of your plan as a road map to where you want to go.
Don’t Forget About the Past
You can’t set a realistic goal without looking back. Setting a goal of making $100,000 this year wouldn’t be realistic if you made only $20,000 last year. Compare what worked for you and what didn’t work for you last year. Set a percentage goal instead of a number. For example, you could say, “Each quarter, I am going to increase my profit 10 to 20 percent over last year.” If in the first quarter you increase your profit by 30 percent, you now have a more realistic goal to set for next quarter.
Break It Down
Large goals seem unrealistic if you are only looking at the big picture. Break down the big picture into smaller sections. If you want to make $100,000 in a year, break down the figure more than once. In other words, $100,000 per year means $25,000 per quarter, $8,333.34 per month, and $1,923.08 per week. You can find ways to reach the smaller goals which will eventually achieve your large goal.
As long as you are setting goals with a realistic means of achievement, no goal is too big to achieve. Penny stocks bring opportunity for success. Being smart about trading is step one. Being smart about your goals is step two. If you follow your road map, then you can achieve your trading ambitions.