The stock market has opened to a new generation of investors through forums like Reddit and Reddit Penny Stocks. It has been diversifying marketplaces and attracting a flurry of investments. The market saw the influence of retail investors due to Reddit in 2021, and that was just the beginning.
Yes, they don’t get much mainstream attention, but they’re still there, helping investors make their next big move. Penny Stocks Reddit is a perfect fit for investors’ portfolios.
What are Penny Stocks
Penny stocks trade at $5 per share or less. They are cheap and unstable, too. As you don’t need big investments and you can make profits, that’s why investors like them to build trading accounts? In the “real” stock world, you need strategies to succeed in penny stocks.
Buying Guide for Reddit Penny Stocks
Reddit’s influence is real enough to significantly spark volume and share price as it pops up on a discussion board. Reddit Penny stocks don’t follow the fundamental trading analysis; you need to watch, watch, and watch. It demands motivation to learn how stocks behave. The more you learn about stock behaviour, the better you become, and you can build a trading account quickly. You need to learn a few things when seeking the best penny stocks.
What the Past Tells
Stocks follow athletes like track records that you can learn; ways could be different, but track records are similar. Before investing, you can seek out the history of stocks and track how they will behave. Study patterns and see which stocks can perform best.
Technical Analysis
Technical analysis means identifying specific trends and patterns in stocks’ behaviour. As Reddit penny stocks are volatile, technical analysis works better than fundamental analysis. So, how can you do technical analysis? There is no shortcut to doing so; you’ll have to study charts, trade, and keep watching the stock movement.
Keep up a Watchlist.
A Watchlist is incredibly useful for keeping track of frequent trades. You can track former runners and track them to get on the run in the future.
Create a trading plan.
A trading plan includes who you are as a trader, your trading style, category, risk tolerance, and other factors. It helps you to stay focused and avoid buying random Reddit penny stocks. Plan aids you in selling stocks if experiencing losses. Learn, plan, execute, and build.
5 Best Penny Stocks on Reddit
Keeping context in mind, here are the five best Reddit penny stocks to help you make an informed decision.
Denison Mines Corp. (NYSE: DNN)
Denison Mines Corp. (NYSE: DNN) is a Canadian uranium producer with stakes in many projects. Uranium stocks showed fluctuations in stock prices that attracted attention. So far this year, despite their volatile nature, stocks have generated huge returns. Particular interest in uranium has helped the company gain rapid growth. As long as uranium demand continues, Denison Mines will keep seeing growth.
FuelCell Energy Inc. (NASDAQ: FCEL)
Many investors are watching this 3.5%-gain penny stock. Why are stocks rising? Due to its low trading period and capitalization of renewable resources, stock prices are low, which makes it attractive. Therefore, FuelCell is popular among investors.
Pharmagreen Biotech (PHBI)
PHBI saw a 2022 breakout year in penny stocks. They provide starter plants to licensed cannabis cultivators. PHBI acquired Long Valley Farms in May 2022. In July, they announced their expansion to include more plants, including functional therapeutic fungi. Their milestone list is expanding with time.
Vitreous glass (VCIGF)
Redditors like this Canada-based penny stock as a good choice for ESG investors. Since 1995, the company has been recycling glass collected from Western Canada and turning it into fibreglass insulation manufacturing material. 2022 hasn’t been good for the company, but it’s gained incredible ground this year.
Clover Health Investments Corp. (NASDAQ: CLOV)
CLOV helps seniors find Medicare plans. This service is great as it could be difficult to find sometimes in the US. The company also helps with finding health insurance.
A software-developed program helps patients choose the plan that best serves them. Healthcare providers also get facilitated. Reports have been stagnant, but prospects are good.
Why you should do Penny Stock Trading?
Penny stocks are sketchy and volatile, and scams are too. Still, why should you consider trading penny stocks? Here are the positives of penny stocks:
Quick Growth: Cheap and quick growth make penny stocks a sweet pick. You can build an account faster than with costly “real” stocks. If you learn how stocks behave deeply, you can grow your trading account in a few weeks or even days.
Less or no “real” interference: Wall Street shows no interest in penny stocks; instead, they don’t like them. Hedge funds and big firms don’t dabble either. This makes penny stocks safer to avoid unloading and tanking prices by hedge fund managers, as can happen in large-cap stocks. Somehow, you still need to be careful to avoid scams.
Less Price Fluctuation: Sketchiness makes penny stocks less attractive for major traders, so prices show less variation. This gives the investor much more time to stay on the move.
Why Reddit penny stocks could be risky?
You can’t think of penny stocks as rainbows, as risks are always associated with trading them. Below are those risks:
The distress of Fraud: It won’t be wrong to call Penny Stocks the playground of scam artists. The Financial Industry Regulatory Authority (FINRA) and Securities and Exchange Commission (SEC) try to keep scams in check. Still, this fire on the sun’s surface is hard to succeed at.
Maximum Failure Rate: Penny stocks are cheap and show quick growth, yet most companies fail, and it happens fast. Only those who succeed learn the stock movement profoundly and act less greedily. The volatile nature and low liquidity make it harder to unload when experiencing losses.
Final Word
Reddit is a great place for finding new stocks. Most stocks are volatile and sketchy, but keeping your eyes on the trends can prove a lucrative investment. Reddit Penny Stocks are a good option to learn, plan, execute, and keep an eye on everything. You can grow your trading account if you act with discipline. Never follow the hype. In this way, you can make money out of penny stocks.
Visit our investment guide to make informed financial decisions and steer to your well deserved financial freedom.