Have you ever gotten a penny stock tip that was so fantastic that it was so hard to turn it down? Surely, you'd would want to grab a hold of that. But before you do, make sure to think it over carefully. After all, not everything in this world that glitters is gold.
It's not an unknown fact that fraud cases are rampant, especially in stock trading. Many shareholder and investors have already been victimized by unscrupulous brokers who use dirty tricks to get money. Although there are legal sanctions against fraud, many people still get away with it, perhaps due to the lack of proper enforcement. If you're an investor, you should know how to spot these tricks so that you don't end up becoming a helpless victim.
For one, you must never be bought by seemingly perfect offers. If its all benefits and no catch, then it is a sign that you should reject it immediately. Schemes like Pump and Dump hold people at the neck by presenting to them an offer that they cant refuse. Scammers publish very positive and exaggerated news that draw people in and cause them to buy penny stocks on impulse.
You shouldn't fall for the negative rumors either, for they can be scams, too. This is usually the converse of pump dump. Instead of positive news, negative news regarding particular stocks would be spread. When prices drop, the scammers would purchase the stocks. They would then market the stocks once the news dissipates and prices increase. If you fall for this scam, you lose out in the end, too.
There are a lot of scams that are carefully crafted to evade the law. These scams are very distinct from one another, and are made with the intent to overshadow the income of their predecessors. Even they are as diverse as they come, these scams still have a few traits in common.
But even if the delivery method varies, one thing common with scams is that they have unbelievably great offers that makes it so difficult to say no. They're made as such so that you would not think twice about grabbing the opportunity. As for penny stocks, if you're around friends who trade these things, it's so easy to get carried away because they're so cheap and you probably know a few who have made a windfall just trading it.
Another thing is that these brokerages are always in a rush to get you to buy. Stop thinking and buy now! You may never have the same opportunity again. Keep in mind that stocks are motivated largely by rumors. And since penny stocks are so cheap, you may be tempted to buy a whole lot of them because you think you can make a quick buck. If you're not an expert and you're motivated only because someone said that it was going to go through the roof, you may be in for a very sorry surprise.
As much as possible, protect yourself and learn how to analyze stock patterns yourself. It is not enough to rely on what other people have told you. In fact, if they've bought it already, they may have a lot riding on it as well. Make sure you do proper research. Trading penny stocks can burn you like anything. Just ask the people who lost all their money in the recent market crash.
It's not an unknown fact that fraud cases are rampant, especially in stock trading. Many shareholder and investors have already been victimized by unscrupulous brokers who use dirty tricks to get money. Although there are legal sanctions against fraud, many people still get away with it, perhaps due to the lack of proper enforcement. If you're an investor, you should know how to spot these tricks so that you don't end up becoming a helpless victim.
For one, you must never be bought by seemingly perfect offers. If its all benefits and no catch, then it is a sign that you should reject it immediately. Schemes like Pump and Dump hold people at the neck by presenting to them an offer that they cant refuse. Scammers publish very positive and exaggerated news that draw people in and cause them to buy penny stocks on impulse.
You shouldn't fall for the negative rumors either, for they can be scams, too. This is usually the converse of pump dump. Instead of positive news, negative news regarding particular stocks would be spread. When prices drop, the scammers would purchase the stocks. They would then market the stocks once the news dissipates and prices increase. If you fall for this scam, you lose out in the end, too.
There are a lot of scams that are carefully crafted to evade the law. These scams are very distinct from one another, and are made with the intent to overshadow the income of their predecessors. Even they are as diverse as they come, these scams still have a few traits in common.
But even if the delivery method varies, one thing common with scams is that they have unbelievably great offers that makes it so difficult to say no. They're made as such so that you would not think twice about grabbing the opportunity. As for penny stocks, if you're around friends who trade these things, it's so easy to get carried away because they're so cheap and you probably know a few who have made a windfall just trading it.
Another thing is that these brokerages are always in a rush to get you to buy. Stop thinking and buy now! You may never have the same opportunity again. Keep in mind that stocks are motivated largely by rumors. And since penny stocks are so cheap, you may be tempted to buy a whole lot of them because you think you can make a quick buck. If you're not an expert and you're motivated only because someone said that it was going to go through the roof, you may be in for a very sorry surprise.
As much as possible, protect yourself and learn how to analyze stock patterns yourself. It is not enough to rely on what other people have told you. In fact, if they've bought it already, they may have a lot riding on it as well. Make sure you do proper research. Trading penny stocks can burn you like anything. Just ask the people who lost all their money in the recent market crash.
About the Author:
The author of this treatise has detected the creator of a PSSO named Josh Yudell. I believe Josh Yudell to be widely considered an expert in the fields of investor relations, SEC compliance, corporate finance and capital structure.
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