It's no secret that we live in a cyclical economy. The economy goes up and down, usually in predicted cycles and sometimes in ways, beyond our expectations.

For those playing the stock market, there is a lot riding on it. Especially when you consider the fact that in the United States, the stock market determines the state of our economy.

The biggest obstacle of course is to overcome the downfalls in a recession or a falling economy. For those trading actively in the stock market, the key is to invest in lucrative stocks, but determining which stocks will do well and which ones will plummet is the obvious element to surviving. Just because there is a recession, it does not necessarily mean that all stocks will lose value and people will lose money. There are plenty of other stocks out there that are just ripe with growth potential, the problem is finding them.

Penny stocks are often dangerous to invest in during capricious times mainly due to the fact that information regarding penny stocks ride dangerously close to insider trading. By the time a growth trend is reported on a penny stock, those who have already anticipated the growth have cashed in on it and made the most of it before the stocks drop or plateau.

Bigger companies who have shares at substantially higher rates can also prove to be problematic. A high amount of capital is needed to invest in order to return a high profit.

Research is key and following a growth of a company religiously along with their industry is often part of playing the market right.

When a recession is strong or inevitable, people react and the day traders move so fast, it's difficult to keep up with the trends to see where the money flow is going. So fast in fact that within hours a tip that was initially good, could go bad. Even seasoned analysts and day traders have a hard time seeing long term goals in a volatile market.

Researching on your own can prove to be time consuming and very exhausting; but don't lose heart. Devotion, perseverance, knowledge and determination will prove to be your best ally when deciding where to invest your money.

Source by Ben Phoenix