Interested in buying Canadian penny stocks? You’re not alone. The Canadian economy is faring well compared to other developing nations. Thus there is good opportunity to invest in promising small cap Canadian companies looking to exponentially increase shareholders’ value.

In general, a Canadian penny stock is a share that trades for less than $5. In Canada, penny shares trade on the Toronto Stock Exchange and the TSX Venture Exchange (TSXV). Not only does Canada breed great hockey players, it is also rich in natural resources such as energy, forestry and mining and boasts an educated workforce keen on building and advancing new technologies. Thus, the majority of penny stocks in Canada is issued by commodity and technology firms.

During both bull and bear markets, there are huge opportunities to achieve profits on the Canadian market if you are patient and do your research. Innately, penny stocks are highly risky investments. Acknowledge this. You can suffer significant financial losses quickly if you do not possess the knowledge to play the game. Therefore, it is important to learn as much as you can about investing in penny stocks before participating in the market.

Canadian penny share prices can be quite volatile because of their relationship with commodity prices in addition to company specific news. It is possible for share prices to double or triple during a single trading session. Be aware that with penny stocks, “pump and dump” schemes have claimed many victims. Learn about these schemes to minimize your risk of becoming a casualty. Therefore, taking the time to perform online research and following potential companies to identify the right trends will pay you handsomely. It is prudent to stay focused on company fundamentals, news or technical analysis to make investment choices that are more likely to reward you with sizable profit opportunities. Before you proceed to buy penny stocks, know what to look for.  Educating yourself on the basics of how to invest in the stock market will give you more confidence.

To buy Canadian penny stocks, you want to enlist the services of a stock broker whom deals with the Canadian securities and will be able to fulfill your buy and sell orders. An advantage of dealing with penny stock brokers is that they can make recommendations based on their research. However, performing your own due diligence is always recommended. If you want to bypass a stock broker and trade online yourself, simply open an account with an online brokerage that has access to the Toronto Stock Exchange and the TSXV. Note that share settlement is in Canadian dollars. Thus, if you do not have a Canadian dollar account, you will incur currency exchange costs when selling or buying penny stocks.