Before you start to invest in microcap stocks it would be good to know a bit more about them.
Microcap stocks are companies with micro or very low capitalizations.
In other words, such stocks represent companies which in most cases have limited assets.
One of the main differences between microcap stocks and other stocks is the lack of publicly available information on the companies.
That is because larger public companies have to file reports with the SEC while the companies with low assets don't.
Therefore it can be pretty hard to find any information on microcap companies.
Investing in microcap stocks is riskier than investing in other stocks.
However, they can yield some pretty high returns and provide greater potential than any of the stocks in the larger markets.
When investing in large cap stocks you can be happy to gain 5-8% in a day and an average of 10% yearly growth where microcap stocks can easily gain 25% or more in a single day.
Just think about it, it's a lot easier for a stock to jump from 5 cents to 15 cents than it is for another stock to jump from 50 dollars to 150 dollars.
The opportunities in the microcap sector are enormous.
If you know how to pick winners then you won't have any problems in achieving the kind of returns shown above.
There are many reasons as to why microcap stocks can jump in value so quickly.
You can have hundreds of percent gains just from a positive announcement in the news for the company.
As you may guess there are many factors that go into play when choosing the right microcap stock to invest in.
One of the biggest factors is volume.
The volume represents the number of shares that are traded on any given day.
Volume shows you how interested other investors are in the stock.
High awareness in a particular stock causes that stock to skyrocket in value.
Your goal is to spot such stocks in time.
Now there is a system that I've been using for a while that you might be interested in.
It's called Penny Stock Prophet, you may have heard of it before.
It's created by a guy who made some major profits in the stock markets, and he is willing to share his weekly picks with you and a limited group of other people.