Penny Stock Trading

I would say that there are two styles of penny stock trading: (1) follow the crowd, and (2) bargain hunting.

If you follow the crowd, you are looking for the hottest penny stocks, and the penny stock companies you look for are the ones on the move, where penny stock promoters are whipping up a buying campaign. Whatever penny stock system you use, you operate on the bigger fool theory -- you hope to buy high and sell higher.

If you are a penny stock insider, you are probably a bargain hunter. You want to make money trading penny stocks, not by following hot stock tips, but by looking for undervalued stocks. You probably use limit orders and when you trade penny stocks online.

To me, I find that buying something that is already up is a very risky proposition. You are hoping that someone else will take the stock higher, but you never know when the music will stop and leave you hanging. When the music does stop, and the stock peaks, you will find that the down move will be just as fast, if not more, than the down move.

On the other hand, if you are a bargain hunter, you may find that you are stuck with a cheap stock that says cheap forever with no volume to sell into.

How to tell if that hot penny stock pick will keep moving? How to tell if that bargain will turn into one of the best stocks to invest in? Stay tuned to this blog to find out.