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A beginner usually feels very attracted to the stock market while for example discovering a penny stock that’s being reported in CNBC or the news program and watching it rise steady fast and make new highs from $1 to $7 in just 2 months.

While learning about this successful news story he’s saying to himself “Oh boy if I was one of those lucky guys who bought that cheap stock back when it was priced at $10 I easily would have tripled my money by now… That means my 10 grand would transformed in to a whooping 70 K! hassle free … I would have been able to grab one of those big HUMMERs on the spot and probably pick up a nice Rolex by the way!”

The stock market news constantly reports of hot small cap stocks that are breaking out and making tremendous gains on the same day or doubling in price in just a few hours. Back in the bull market of the late 90’s you could easily see a good number of hot stocks sprouting out every week.

Those years surely made it look like every body could easily take LONG SHOTS and make a shiny pile of gold every day in the stock market. But today’s market is a different story. A totally different animal.

Some say that the stock market has gotten more realistic. Fantasy land is over and GAMBLING YOUR WAY TO RICHES is not an option anymore. You might get lucky a few times, but your constant loses can wipe you out sooner or later.

The fact that the bull market period has ended for now doesn’t mean that you can’t make a great deal of money in today’s market. A lot folks from many walks of life keep making excellent profits on a daily basis, pocketing hundreds & thousands of dollars by trading penny stocks online.

Success in penny stock trading starts by applying a wiser and REALISTIC methodology for choosing hot penny stocks as well as for getting in and out of them with profits in mind.

You need to look at the stock market more realistically. You got to learn that you can benefit when stocks go up and also when they FALL down.

You got to WORK SMARTER and get more selective about the hot stock trading opportunities that you choose. You need to embrace the nature of day trading and be fully prepared to take advantage of stocks that are poised for a BIG RISE on the same day.

The bottom line is you have to PREPARE YOUR SELF to be successful, just like you would do it in other areas of your life in order to achieve success.

In our investment work when we get involved in stock investing, we do hands on stock research. Here are 12 basic stock investing rules that you may follow for successful trading. The stock market is driven by earnings, and a good stock investing course will teach you to judge the emotional state of the stock market.

Basic concept behind stock investing before getting involved in the stock trading, you should be well versed with its concept as this will help you in achieving success every time you trade. Now with all these information presented to you, it is now your choice whether you will get involved in penny stock investing. With ETF investing, you get the best of stock investing (ease of trading) and the best of mutual fund investing (built-in diversification) all in one investment vehicle.

When taking a stock investing course you may learn a few things that your broker may not even be aware of. Unlike stock investing, you need strong credit to use other people’s money to finance investment property. As you might imagine, the ads under stocks generally (which includes broad search terms like ’stock investing’) are seen the most, because most searchers begin with generic inquiries.

So if you are new to investing in the stock market take some time and learn how to by taking a stock investing course. Stock investing is relatively volatile and full of uncertainty. The more forex stock investing trades you make with a high probability of success, the more successful you will be.

Stock investing takes a great deal of research however if you make good investing decisions, it can have a high rate of return. Stock investing is a popular tool that many use for creating wealth. It is not difficult at all to succeed in stock investing.

They don’t know anything about stock investing and they often lose a few thousand dollars very quickly. You have to weigh both the pros and the cons of small cap stock investing before you sink any of your hard earned money into anything. In the real world, the world of stock investing, you should always put money after your best ideas.

It is also the hardest part to master in stock investing. Penny stock investing is a junior level course at least. Fraudsters don’t think twice before developing stock investing, commodity or option trading courses to make a little extra money for themselves regardless of whether or not what they teach helps their students.

Also, online stock investing has opened the door wide for overseas stock trading, giving you more investment opportunities than ever. In this manner, stock investing is much like surfing: spotting when or when not to ride the waves. So, before putting any money into stocks, the first question you should ask is what do you want to achieve with stock investing.

The second richest man in the world, Warren Buffett, has made his millions from stock investing. Social networking has been intergraded into many stock investing courses. When you take a closer look, the alternative means of extra income via stock investing is just a spin-off of earning from a business.

Online stock investing has helped a lot in saving time and money by enjoying the thrill of trade at your convenience in the ambience of your home. What any ‘vexed’ shareholders are forgetting, and he is not, is that Rule 1 in stock investing is, don’t lose money. Penny stock investing can be profitable.

There’s a big difference between buying a stock for a quick trade, and making a true stock investment. With so many friends and neighbors focused on the quick profits of day trading, people have forgotten that making a stock investment makes them part-owners of real, live businesses.

If you view stock investments from this perspective, you need to be concerned about things beyond MACD, support and resistance, and other technical indicators. You have to be certain that the business is one you can entrust with your hard-earned money, for the long term.

Review the Company’s Income Statement Before Making a Stock Investment

Day traders almost never bother with financial data, but true investors should always review both the income statement and balance sheet of a company before making a stock investment.

Start by looking at the past three to five years of income sheet data. Is the company’s income growing? If so, is the growth accelerating or decelerating?

Always look at the company’s gross margins before making a stock investment. Gross profit is the company’s total sales minus its cost of goods sold. Gross profit as a percentage of sales is gross margin – is this number going up or down? Once you evaluate all of this information, you will be better prepared to make a stock investment.

If a company’s income statement is erratic, income growth is decelerating, and its gross margins are being cramped, it can still be a good stock investment.

This is because other investors have probably abandoned the company, pushing the price of the stock down. Generally, companies that have consistently accelerating growth and improving gross margins are pricier stock investments. You have to evaluate all of the data and determine what you think the stock is really worth.

Don’t Forget the Balance Sheet When Making Stock Investments

Reviewing the income statement is never enough when making a new stock investment. The balance sheet is always at least equally important, and in the case of companies with weak income statements, the balance sheet is even more important.

Consider the liquidation value of a company before making a stock investment. This is most important for companies under distress. What would happen in the worst case scenario and the company went bankrupt?

Look at the balance sheet and subtract intangible assets and total liabilities from total assets. What’s left are the items that could be sold if the company ceased operations. If the liquidation value per share is close to the trading value of the stock, then you have downside protection on your stock investment.

If you think the company has a chance to turn things around, then it could be a great buy.

Should You Only Look For Damaged Companies When Making a Stock Investment?

No! While the balance sheet is most important when considering a stock investment in companies under distress, the income statement is paramount when making a stock investment in growing firms. Growth stocks aren’t just for traders, they can be for investors too!

Consider Hansen Natural (HANS). This stock quadrupled from $7 a share in April of 2004, to $28 per share a year later. This would have been great for a trade, but traders would have really missed out if they sold for $28.

Over the next 15 months, the stock went all the way to $200 per share! Investors who took a look at the company’s financial statements and carefully considered its tremendous growth prospects, could have turned a $10,000 stock investment in 2004 into more than $285,000 today.

It pays to buy and hold when you do the homework and you’re confident that you’re right.