Many people buy stocks but how many of them know how to buy small cap stocks? How many investors can even get the information about these unlisted companies? The answer is not many and that is exactly why you can make yourself rich with relatively little money.
What you do need is knowledge from an expert.
1.
Only Use Discount Stock Brokers - Many investors over pay by paying up to $50/trade which is a complete rip off when there are many online brokers that charge less than $5/trade.
Sogotrade, Tradeking, and many other discount brokers charge less than $5 which is crucial.
The only fee you can control is what you pay to buy and sell stocks so you might as well get the cheapest.
You will not be using them for you small cap pics so only trade cost matters.
2.
Use Stop Loss Orders - If you only take one thing away from reading this make it understanding and using stop loss orders.
These are crucial for success trading small companies since without them you CANNOT make money.
Most of your small company picks will lose money so it is important to put a cap on those loses.
A good figure is no more than 15% loss.
A stop loss order is a preset sell order at your predetermined loss point, if you are willing to lose no more than 15% you would set your sell order at 15% below the price you bought the shares.
3.
Let Winners Ride - You may get 1 or 2 out of 10 companies that really move up in value.
This is how you make your big money letting the winners ride higher.
Many times a share will rise from say 10 cents all the way to several dollars in a few days.
When you feel uncomfortable with the huge increase, sell half and lock in your gains while letting the other half rise or fall, hopefully it will continue its accent.
With these three tips you can build a successful small cap trading empire and become wealthy.
The only missing steps now are to pick an expert in small cap stocks picks.