Trading penny stocks is the best way to multiply your earnings many times over.
Perhaps its most lucrative to invest in hot penny stocks notwithstanding the risks involved.
Anyone with very little investment can enter the stock market as prices of such shares do not exceed $5.
Indeed no other investment can offer you such quantum jump in returns than by dealing in the best of penny stock pick over the counter (OTC) this too in a very short span of time.
Tell me where would you find a blue chip stock priced at $50 each and which in just few days its value climbs to say $200, but in case of penny stocks its not surprising to find the value of a hot penny stock shoot up from $0.
50 to $2.
00.
in matter of days.
However as caveat I must caution you beforehand that the penny stock market although being full of potential is perhaps the most volatile and turbulent amongst all forms of market for investment.
Although exciting and full of expectation to make a big profit, trading in penny stocks is certainly not a child's play at all.
On the contrary the market demands that you always remain on your guard and do not throw caution into the air.
Its your money that you have injected and you cannot afford to see it flow into the drain because of some carelessness.
Do not jump and invest heavily in stocks of a single company alone however lucrative it may appear to be.
Its better to spread your risk by investing in four or six different penny stock companies, depending how much is your total investment in the market.
Say if you are investing $500 then you can invest $100 each for different stock type.
Always check and recheck to make yourself doubly sure that the company in whose stocks you are dealing with is reliable and has a good performance history much above the market average.
In case if stocks of some of the companies perform badly at least the loss won't be total.
One can never tell what might happen in case the market slides down heavily without indication, since the micro-cap stock markets are highly unpredictable and swings either way too fast at the wink of your eye.
To be on the safe side always select your entry and exit points carefully, as determining the position for stop loss is essential to arrest any loss in case the stock performs badly.
Whenever you want to invest in a company, try to investigate its soundness and how well its performance is in terms of actual business.
Investigate the potential of such a business in terms of demand in the near future? How well has its performance been till recently in the stock market? How well does it competes and compares with other companies in the same category? There are however excellent software and newsletters from highly reputed sources that would guide and help you in trading penny stocks safely online.