Thinking of trading in Best Penny Stocks, those which are under $ 5, can at times be highly profitable but risky also. These stocks usually move based on speculations. But if you are a lucky one may be able to lay hands on a very stock which has a bright future. Such stocks may be good to trade which are over the counter and the pink sheet stocks. These stocks are usually traded on the major stock exchanges, these stocks mostly likely from the companies that are in losses and have very little growth potential. These stocks can be of newly launched companies which are still in the development process and once established these stocks can give good returns.
When you screen Hot Penny Stocks, you must always look for positive single day movers which have very large volume transactions. You can easily identify 15 to 20 such Penny Stocks and keep close watch on these stocks before investing. Look for the companies which have innovative products and less competition and the period of their launch of products. Keep a close watch on the trading volumes of such stocks. Analyze the trading of these stocks and variations in the price for one month to three months. If you find that the stock prices have continuously dipped, that means the stock is not good and the downtrend is expected to continue.
You must see the steady upward trends, if the upward trend is in continuity even if the upward trend is slow; even then the stock is worth investing. Once you find that you have reached your objective, sell the stocks and move to next. There are chances that such Hot stocks might dip after you invest, you will have to wait for the right moment and sell them. Another indicator is that if the prices close very close to low and next day it opens at a higher rate and closes higher. If you are able to choose the right one, you may end up with a profit of 30 to 40 percent in a single day. If you think the prices will go up hold the stock till next day.
The Best Penny Stocks and what penny stocks to watch. This is due to the different levels of inclinations and analysis regarding Penny Stocks. One also gets to know about the Hot Penny Stocks through a number of sites dedicated for the same purpose. People easily get carried away by the flashing numbers of best penny stocks of the day, without enough botheration about what might be the real picture. This is what one has to sift herself or himself. One has to be really sure of what one is doing; otherwise it will be a loss of great money.
Penny stocks to watch can really be exciting and profitable, always remember there is high risk involved, you must be prepared for the risk and the loss. Never put your entire investment in a single stock, get a proper analysis and research done before you invest your money. Learn a lot and have detailed trade history of the stock before you put money, you must have complete confidence that whatever you are doing will give you good returns.