The stock market has shown signs of it turning around with the vast implications of a recovering economy and the opportunity to invest in the market while it gains momentum according to the news.

Important things to know before joining the momentum in OTCBB stocks:

1.       Rule number 1, you can never know everything, but you can try.

“OTC stocks or over the counter stocks are sold by newly formed or small companies that are not yet developed enough to comply with the basic requirements of being listed in major trade markets or the stock exchange.” Nir Dotan. The best way to oppose this possible risk is meticulous research and personal study of the companies that have issued the stocks that you plan to acquire. Investigate the background of the company, scrutinize its financial track record and present investment ranking; this way you will have a good idea of their current status.

2.       Trading online saves you money, but you need an Advisor who knows the Markets

Because of advanced information technology and the capabilities of the internet, buying and selling OTC stocks online can be effortless. Using the internet as the main tool, it is possible for broker-dealers to let you interact with the market makers online. However, the advisors understand the effects of the market and company structure on turning down or up stocks and the stability and overall risk associated to it. Listen to advisors before making your own choices.

3.       Understand why markets turn

If you understand what causes markets to turn, then you understand what the news means to your investments and the market sentiment.

4.       Understand why companies shares turn

Read the news on the industry of your stock, read the new issuances, filings, press releases, and what others are saying online. Try to read credible sources, but pay particular attention to the negative comments source. Sometimes these positions are trying to cause a short position or trying to fill a short position, so make sure the sources are credible before you act. For example, if the company has a newsletter, join it, if they have twitter, join it, if they have facebook, join it. Pay attention, and read what is being said by the company and their employees. Know what they are saying and how that will affect the market.

Written By Mark Bragg

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