It seems both counter intuitive and just plain odd to discuss one of the nations oldest and largest corporations on a site about buying penny stocks, but I guess it is just than kind of economic era.

The Detroit Free Press has this about the value of GM’s stock:

Another concern for GM is that investors will begin to consider GM shares a penny stock if the price stays below $5 per share for too long. Although several experts doubt that would occur with such a well-known company, GM shares have been below $5 consistently since November.

While this is the simplistic designation for a penny stock, it is still something to consider. This is a penny stock that could be traded with tremendous potential in the coming months.

Shares fell to $1.09 Tuesday morning but rebounded slightly, ending the day down 20%, at $1.15.

The drop to $1.09 was the lowest GM shares have been since April 28, 1933, according to the Center for Research in Security Prices at the University of Chicago.

Experts have said that GM’s stock is overpriced, considering that the automaker’s debt-restructuring plan will leave current shareholders with just a 1% stake in the reconstituted company.

“We see an increased likelihood that the shares will decline as the company’s viability-plan deadline approaches,” Efraim Levy, an analyst with Standard & Poor’s Equity Research, said in a note.

GM’s debt-restructuring plan calls for GM to issue about 60 billion new shares in exchange for debt. Then, GM will immediately do a 100-for-1 reverse stock split, in which shareholders would get one new share of GM for every 100 they currently own.

Now this isn’t a suggestion you run out and buy GM right now anything. But you might keep a shrew eye on it. This is the rare economic era where trading penny stocks online can become a big game for even the most serious of investors.

Can people really make a significant income leveraging penny stock trading, even to become millionaires?

Yes, a few individuals earn immense sums in penny stock fortunes — average individuals who trade in their own time almost as if it were just a hobby rather than a real job. It does happen.

It is quite probable, nevertheless, that although they began with penny stocks they sooner or later rose to other possibly more fruitful stocks employing greater amounts of money after they felt they developed more experience and secured more capital with which to invest.

Penny Stock Fortunes – Understanding Risk vs. Reward

Naturally the inquiry then becomes, how do you begin earning profit promptly with penny stocks while incurring the least amount of risk?

Before we resolve that query, let us quickly specify precisely what we intend with the term penny stocks. There are varied definitions, some less exact than others, but generally the phrase denotes low-cost, speculative stocks that typically trade at lower than $5 per share. They are quite volatile and may drop or rise several hundred percentage points in just minutes. While this can make them risky, of course, it can also make them highly profitable… if you really know what you’re doing.

So now you’re probably wondering how can you efficiently calculate what buying penny stocks and when to trade (entry and exit points) in order to best maximize your profits. Please remember, only after you’ve successfully executed several trades involving tiny, low risk amounts should you even dream about executing the sorts of trades you’ll need to earn the big bucks.

Rewards Require Penny Stock Research

Usually traders must put in the hours to become savvy pros. Only after trading stocks numerous times as well as dissecting the trends and outcomes over a long time period may a trader feel he or she truly comprehends trading penny stocks… and yet even then he may nonetheless turn a loss on several consecutive trades.

Yet there are, of course, many alleged shortcuts around. There are numerous schemes available, methods to facilitate your ability to illuminate trends as well as profitable opportunities while they occur… however, be forewarned as most of these so-called systems are saddled with controversial problems. One primary problem is merely that any system still relies on analyzing the historical tendencies, and this still requires much time and effort. Any tool implying otherwise may be scamming you.

A new development in stock trading — and particularly in penny stock trading — is the use of sophisticated day trading software applications which perform scans of stocks to identify those which are forming bullish trading patterns, indicating that the values will soon rise. This kind of software system registers historical data constantly and learns more over time. Quality applications only provide recommendations when the software is statistically convinced in the result, based on the immense volume of data it has analyzed.

Always Do the Stock Math

However, in the volatile market of penny stock trading, not every decision anyone or any application makes will be accurate, so even the best and most expensive software will not properly predict every penny stock possibility.

As always you must exercise your due diligence and keep your investments diverse. Penny stock fortunes are certainly a possibility, but I urge you not to succumb to the lure of the naive get-rich-quick mindset. Ironically, avoiding this mindset is the key to success and ultimately your key to penny stock fortunes.

Here’s a secret for everyone attempting to find the best penny stocks on the Internet: Such a list does not exist!

If you find anyone claiming to provide a list of the best penny stocks for free, they’re full of it. Stop hitting the search engines or message boards trying to find the ultimate list of penny stocks. Real penny stock lists are incredibly valuable and you will not find them for free online.

Best Penny Stocks – The Reality

It takes an immense amount of effort to unearth the hottest stocks before they spark and rise. It also requires resources and time that most people do not have the luxury to spare. Furthermore, it takes the kind of industry knowledge & wisdom which can only be developed & honed with years of experience doing real work in the field.

The potential isn’t hype. There truly is a ton of money to be made in these volatile investments, but you will only attain success by knowing what to buy and when.

I would argue that the most important thing you can do to pick the best penny stocks is to work on getting leads from professionals, then look into and research those companies yourself.

This could be exhausting. In fact, it may very well be impossible to do alone. This is why on the front page of Buying Penny Stocks I describe why a subscription to a professional penny stock newsletter is an absolute must.

If you try to go it alone with penny stocks because you think the best penny stock newsletters are a scam or something, prepare yourself for disappointment… and possibly serious financial consequences.

Find Good Penny Stocks With Due Diligence

So I will once again reiterate the main steps to success with penny stocks:

1. Truly study before you dive into it, and don’t just read websites and forums. Buy a good book.
2. Research and select a good professional penny stock newsletter. If you’ve got the funds, it might behoove you to join two, then just stay with the one that you like better. I can’t stress it enough: you must join some kind of newsletter to have any success finding the best penny stocks.
3. Do not just blindly go with the picks offered by any newsletter. No newsletter and no single entity or human being will always pick winners. Penny stock newsletters provide a required foundation and a necessary advanced step on the public, but you must always do your own due diligence.

Penny Stock Software

As I’ve stated before, for those of you who are a little more technically savvy, some day trading software can help immensely as well. Please be forewarned, however, that most day trading software — even really effective, top-of-the-line day trading software — does not feature the same sort of polish and fancy interfaces you’ve come to expect with Windows or Mac applications. They tend to be rudimentary and utilitarian.

I’ll discuss this more on my page dedicated to day trading software, but to obtain the best penny stocks from most of these applications requires a bit of technical savvy and patience. It just isn’t the same as operating a web browser.

So I hope this rude awakening on the reality of seeking the best penny stocks helps you to proceed with greater caution and wisdom. Thanks again for visiting Buying Penny Stocks and I hope you’re visit was worth your while.

Most consider penny stock trading to be the exchange of stocks at a price between $1 and $5 per share. You’ll also see penny stocks labeled as micro cap stocks, microcap stocks, nano stocks or even just small cap stocks.

Penny stock trading occurs within the OTCBB (Over-the-Counter Bulletin Board) or on the Pink Sheets. So you’ll also find these stocks labeled as OTC stocks (OTC stands for over-the-counter) and you’ll sometimes see the OTCBB and Pinks Sheets referred to as the penny stock market. Penny stocks tend to represent smaller companies, newer companies or struggling companies. They either haven’t proven themselves enough to list on NASDAQ or the grand New York Stock Exchange (NYSE) or in some cases they’ve been penalized by those exchanges and removed.

Penny Stocks Aren’t Cheap

There is a common misnomer regarding penny stock trading. Because of the term “penny”, people seem to think these stocks are somehow less risky than “regular” stocks. This, I’m afraid to inform you, is not the case at all. In fact, penny stock trading is probably more risky then standard trading because they’re so volatile and have little information available. Let me explain the disadvantages to trading penny stocks so you understand what you’re getting into with these profitable but volatile little devils.

Penny stocks lack liquidity. Most penny stocks trade strictly for the profit of the trade rather than for the sake of investment. This means penny stock investors rarely have an interest in the long-term future of the stock. This minimizes share prices and thus minimizes available liquidity.

Penny Stock Risks

Additionally, trading penny stocks involves trading companies with minimum financial data available. Major exchanges such as NASDAQ and NYSE feature strict guidelines to financial reporting, but Pink Sheets and the OTCBB do not. So you’ll often be heading into the dark with penny stocks. This doesn’t mean you can’t find this information on your own, but it will be more difficult and less regulated.

In a related topic, you’ll often find it difficult to ascertain a penny stock company’s background. It is vital that you do your due diligence when it comes to companies traded as penny stocks. Micro cap stock companies often have little to no history or they may even have a questionable history which they don’t necessarily want you to know. Don’t be impatient; you must know the company background when you engage in penny stock trading.

Penny stock traders often just “play” with penny stocks, trading regardless of a company’s potential. However, to secure your investment you really should investigate the nature of the company and its direction before risking your money in penny stock trading.

Practice investing Stock With Paper Trading

I suggest investors, veterans and newbies alike, familiarize themselves with penny stock behavior through paper trading online before diving into penny stocks with real financial risk. Then when you start, rely on a reputable and established penny stock broker rather than some hyped service with little record. Be wary of services offering penny stock tips and trades all-in-one.

I do not mean to dissuade you from making yourself some money through penny stock trading; you certainly can make penny stocks profitable. But I find many people researching penny stocks seem to be looking for a means to get rich quick, and without the proper tools and resources, they’ll actually find themselves on the fast track to getting poor quick.

Take it seriously and be responsible and yes, you can make some real good money buying penny stocks.

More than anything, try to develop an understanding of the similarities which exist among multiple successful small companies. Look for the health and potential of the actual company and don’t fall for crooks temporarily inflating penny stock values with pump and dump schemes. In short, do your penny stock research.

You can enjoy great success with online penny stock trading if you’re responsible and exercise due diligence.

Day trading software can serve several different purposes. This page will describe the three main areas of day trading software then over time I may make specific suggestions in each area. The three main areas are the following: stock trading software simply used to execute trades, software used to chart the history of stocks, and software used to anticipate the future behavior of stocks.

I do suggest doing your research before investing in any particular package. You’ll find a ton of competition among day trading software developers. And while I can’t recommend one just yet, quality free day trading software is becoming more practical with the growth of the open source software development community.

Buying penny stocks can be a competitive and volatile practice requiring great research and precision. The idea behind day trading software is to take as much of the busy work out of penny stock trading as possible so you can concentrate on the insights that lead to hot penny stock picks.

Whether you use it for basic operations or to get a step on the competition, it is important that you not underestimate the importance of these tools. With the evolution of the day trading penny stock profession, you can rest assured your competition will be leveraging this software, so if you’re not, you’re simply putting yourself at a disadvantage among the day trading systems.

Stock Trading Software

Stock trading software is the basic software you will need to search for trades, obtain core information, execute your trades as well as manage your accounts. You’ll find some applications provide a complete package to handle all of your trading tasks. But many others come as separate components, each component specialized to fulfill a specific investment purpose.

In general, the component stock day trading software tends to be more powerful and advanced, although it is often less polished for the everyday computer user. Complete application packages tend to be less flexible, but they do provide a degree of convenience and efficiency that can save you time.

Stock Charting Applications

Day traders use charting software to carefully observe their markets. Charting software is the day trading software day traders usually utilize the most. Charting software displays current and past market information in a graphical view designed to enable quick decisions. When you see people refer to day trader software they usually mean charting software. You’ll also see this software used for swing trading.

When you select penny stock charting software, you will evaluate just as you might evaluate any software package. You consider ease of use, flexibility, and features. You will find that some charting software provides only the basics, such as charts and a few core indicators, while others provide more sophisticated features such as replaying charts. Even more advanced stock charting software will provide a programming interface for designing and implementing custom indicators.

Stock Predicting Software

The third type of day trading software involves a new breed of applications build to predict the hot penny stock picks. This is an area that can be a little sketchy. While there are applications that weigh a wide variety of variables to anticipate penny stock behavior, you should never strictly rely on any single application’s hot stock picks to make your decisions and invest your money. They should only be part of your overall comprehensive stock trading systems.

They do, however, take the leg work out of working through some of the data and numbers you must responsibly crunch before making every pick. Just don’t be fooled into thinking that buying a single penny stock picking application will make you rich overnight. They can and will help you succeed, but nothing replaces thorough investment due diligence.

Despite my warnings, I do believe they’re necessary if you want to compete in today’s market. Like it or not, you need to two things to compete: You need some kind of day trade software which provides potential picks and you need a membership with a reputable penny stock newsletter providing weekly penny stock recommendations.

Some will say that these are just made available to make money from you, but the fact of the matter is that all your top competitors will be penny stock trading with a penny stock newsletter and penny stock predicting application at their disposal. If you try to do it the old fashioned way, you’re willfully giving your competitors a head start every time.

Some of you may have reaches this page looking for my recommendations. While I have software that I prefer, I’m not ready to recommend or promote any single package as the best day trading software. There are just too many different options out there. It would be irresponsible of me to pretend I’ve fairly evaluate enough of them to tell you the day trading software I use is the best or that any one way will guarantee you your penny stock fortunes.

I am working on a responsible way of providing some recommendations, but I want to do this carefully. In the mean time, I hope this article on day trading software provides you with a solid foundation the subject and keeps you from plowing forward in too bold a fashion.

Thank you for visiting Buying Penny Stocks and I hope you return soon as I plan on extensively growing and refining my site over the coming months.

Before you can learn how to buy penny stocks online, you need to understand what a penny stock is exactly, and you need to appreciate the great risk involved in dealing with off-exchange stocks. If you choose to buy penny stock online, do so with caution and care.

What Are Penny Stocks?

To compute the market capitalization of a stock — also known as the market cap — you need to multiply the penny stock cost of the company with the number of shares which are outstanding. By executing this computation you will be able to ascertain what the full dollar measure of all shares within the company are at some specified instant in time.

Penny stocks are not listed on a securities market like some other stocks. Yet they’re listed in the over-the-counter — or OTC — market. For the dealing of most stock a broker may act upon the investors behalf and arrange a transaction direct between the investor and a 3rd party. The agent then picks up a commission for helping the buy.

For an average individual new to buying penny stocks, they need to utilize an online penny stock broker to initiate online penny stock trading. A broker — or agent — can be conceived as the contact between you and the market. An individual informs the broker he wishes a certain volume of shares of a stock, and then it’s the broker’s task to execute the order.

Penny Stock Brokers

You may employ a ‘full service’ broker to guide you with your deals and help you select the best penny stock for any given moment, or a discount broker like E*trade. A discount broker allows you to enter your own trades by an online user interface. This preserves much money on commissions you’d otherwise have paid for each executed order. People often utilize discount brokers for trading penny stocks.

A generous proportion of all penny dealings are charged by non-discount agents as principle transactions. This means that the agent is not compensated any commission but instead earns its profit on the spread, and by purchasing and trading penny stocks at opportune moments. There’s no exclusive cost at which penny stocks are purchased and traded, but instead there are a number of diverse costs.

The deviation between the bid and ask cost is identified as the spread. The spread of most penny stocks is generally about 20 to 35 percent but may frequently become 50 to 100 percent. There are also always 2 bid and 2 ask costs; these are identified as the inside and outside bid and ask. Remember that it’s the outside bid and ask that is of most concern generally. Penny stocks are also subject to mark up pricing. This is where an agent has harbored the stock in his account and has consequently accepted some of the hazard affiliated with market value fluctuation.

To trade penny stocks, most times you’ll want to work with a discount broker like E*Trade or TDAmeritrade. All brokers have their strengths and weaknesses. People who have taught me the ropes seem to feel that TDAmeritrade is the most established discount broker for dealing with penny stocks. However, another discount broker you might consider is ShareBuilder. ShareBuilder provides strong features for growing portfolios involving low commissions.

Here are some variables I suggest you consider when choosing an online discount broker:

• Comprehenisve and accessible features and benefits.
• The minimum amount required to open an account.
• Fees for going inactive, which is likely as you’re beginning and studying.
• Most importantly, commission fees (and always be certain to read the fine print).

A few agents will accept lower primary commissions, but comprise the difference in supplemental fees for online penny stock trading in low-price stocks, or by not including premium features at lower levels of trading activity. Make sure you consider all variables of the discount broker before you commit to enlisting their services.

Weight the Penny Stock Risks

While penny stocks online can be challenging — and remember that there really are quite a few problems associated with trading penny stocks online to go with the millions of dollars of lost — several companies still deal in them for they can assist clambering new companies just trying to get started. Remember that in stock trading in general, the best way of finding a good investment is by consulting with a trustworthy agent or broker with whom you’ve established a relationship.

When it comes to trading penny stocks online, we suggest discount online brokers because the penny stock market is wrought with individuals trying to take advantage of novice traders. Eliminating a questionable middle man empowers you to make sound judgements without someone else trying to make a buck off you.

If you intend to engage in buying penny stocks, then of course, you need to know where to buy penny stocks, specifically, which online penny stock brokers provide the most appropriate service for your penny stock management. A penny stock broker is an invaluable resource when you embark on this endeavor so pay heed.

When dealing with penny stocks, you probably want to consider a discount stock broker for your penny stock broker. However, I’m mixing in a couple full service brokers so you can compare them against your needs. Select one of the following online stock brokers to learn more:

ChoiceTrade
Charles Schwab
Sharebuilder
LowTrades
optionsXpress
E*TRADE
TD Ameritrade
Vanguard
Interactive Brokers

ChoiceTrade

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ChoiceTrade features a relatively simple commission structure: 5 bucks for all services! They charge $5.00 for each buy and sell order (whether a market or limit order). For those of us engaged in penny stock trading, it is only $5.00 for Pink Sheet and OTCBB stocks.

There is no minimum required balance to open a ChoiceTrade account, except if you desire to trade on margin or start a day trading account.

For traders who aren’t active on a daily basis, ChoiceTrade could provide the cheap stock service they require, with no inactivity or quarterly fee if you aren’t trading tens of thousands of shares each month.

ChoiceTrade

Charles Schwab

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While Charles Schwab trailblazed for the world discount brokering, it still isn’t the least expensive of such services. Scwab charges $19.95 for both market and limit orders as well as an additional $0.015 for shares traded over 1000. Furthermore, Charles Schwab will charge you a quarterly service fee of $45.00.

Small-cap and penny stocks cost $19.95 for buy and sell orders, but if you buy over 5000 shares, you’re charged an additional. $0.003 per share.

Note that Schwab is a little more than a discount online stock broker, providing more in the way of tools and services for the serious investor.

Opening an account with Charles Schwab requires a minimum of $2500.

Charles Schwab

Sharebuilder

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Sharebuilder, a newer online discount broker with some distinct traits. Sharebuilder CEO Jeff Seely desired to empower everyone to participate in online investing. Sharebuilder’s philosophy can be broken down to three core principles: Discipline, Diversification, and Dollar Cost Averaging.

Since ShareBuilder was bought by the giant world bank ING, Sharebuilder has sweetened its services with real-time buying penny stocks at $9.95.

The distinguishing service for Sharebuilder, however, is their Automatic Investment Plan, which allows customers to schedule dollar amount trades for each Tuesday and pay a commission of $4.00 or less. With no minimum fund limitations and no inactivity fees, opening a ShareBuilder account is a good idea whether you choose to use them as your primary online stock broker or not. You can make the most of their low fees for your long term investments.

Sharebuilder

LowTrades

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Another very basic discount broker with low commisions is LowTrades. They offer very limited services for charting and researching, but they charge only $4.95 per trade. Outside of margin or day trading accounts, there is no minimum balance required.

However, they do charge inactivity fees for each half of the year. If you choose LowTrades, just make sure you execute at least one trade per six month period to avoid those inactivity fees.

LowTrades

optionsXpress

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optionsXpress has been getting a lot of positive attention lately and is one of the more trendy online stock brokers. They charge $14.95 for limit or market orders of 1000 shares or less and if you trade enough, their fee for each order drops to $9.95 for 1000 shares. You’ll find no minimum balance to open an account with optionsXpress, unless you plan to trade on margin. Margin accounts require a deposit of $2000.

To buy and sell penny stocks or Over-the-Counter (OTC) shares, the fee structure is the same. You pay $14.95 for the first 1000 shares. The maximum you will be charged is 4 percent of the entire trade (this is for very large orders).

optionsXpress

E*TRADE

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E*TRADE has one of the more established and well-known brand names in the online stock brokerage business. It is a cheap broker which benefits active traders not requiring support from customer service. E*TRADE will charge you $12.99 for both limit and market orders — with fees becoming even lower for large and active accounts — including penny stocks on the OTCBB or Pink Sheets. E*TRADE requires $1000 to open an account and E*TRADE assesses a $40.00 quarterly inactivity fee.

E*TRADE

TD Ameritrade

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TDAmeritrade could be the best known of online stock brokers. TD Waterhouse and Ameritrade merged to make a single full service company, and the merger lead to significant improvements for penny stock traders. Post-merger they charge a flat fee of $9.99 for all limit and market orders regardless of the order size or stock price, and yes, this includes OTCBB and Pink Sheet penny stocks.

TD Ameritrade charges no activity or maintenance fees. In most cases there is a $2000 minimum funding level to open an account, but you may find lower funds advertised in occasional promotional offers.

Vanguard

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Like Charles Schwab, Vanguard provides a more robust overall service. Thus they are not among the cheapest services listed here.

Vanguard will charge you $25 to execute any limit or market order. It assesses a $30 annual service fee for every client. They require a minimum opening balance of $3000. Buying penny stocks becomes a little more complicated, with a flat $20 base commission PLUS two percent of the total principal of your order.

Before coldly evaluating by their cost, however, remember they provide much more robust service for research, charting as well as more comprehensive customer service.

Vanguard

Interactive Brokers

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Interactive Brokers charge $1.00 to trade 100 or fewer shares. When you trade more than 100 shares, the commission is $0.005 per share. So when you trade 1000 shares, it costs you $5.00.

While there is a minimum account balance of $2,000 to open an account with Interactive Brokers, this minimum balance jumps to $25,000 for day traders.

Correction and Clarification on this last point: An astute reader notes the following: “It is actually the SEC (Securities and Exchange Commission) that requires that amount to allow “pattern day trading” in a cash or margin account. All of the other brokers will also require it.”

Be sure to utilize your account (either for trades or research), because they will charge you an additional $10 a month if you’re inactive for that month.

Despite these extra charges, many people still like Interactive Brokers for buying penny stocks and OTCBB stocks. They charge only 0.2 percent of the total price of a penny stock trade. So when you buy 2000 shares of a 50 cent stock, the commission would be $2.00.

Interactive Brokers

I hope this provides you with a rough reference to online penny stock brokers to get you started in finding your penny stock broker. I’ve used all these services and they all performed fine; you basically have to decide how much research and operational assistance you’ll need along with how often you’ll be trading, then weigh your required profile of services against the costs of each to match your needs. For some, a discount stock broker will be all that is needed. But others may want to try a full service brokerage before trading on their own.

Welcome to Buying Penny Stocks, where I’ll discuss and teach everything I know about the best penny stocks and the best day trading software. You’ll learn about buying stocks online while avoiding the pitfalls prowling the penny stock market.

After innovative changes in legislation, the evolution of the World Wide Web and advances in stock trading technology, buying penny stocks online is now far more accessible for casual day traders. You no longer need to wear a starched dress shirt or fight your way through an expensive college. You can begin profiting through buying penny stocks right away from the comfort of your own home.

This phenomenon gives the financial power back to the individual. A single individual at home on his personal computer can now leverage day trading software to research and determine the best penny stocks online for him or her self.

I will orient Buying Penny Stocks towards beginner and intermediate online penny stock traders. But many of the techniques and resources I provide might have you trading with savvy veterans in little time.

Buying Penny Stocks is Risky

Note that penny stock trading can be a risky business. When you start, I encourage you to begin by thinking in terms of limiting your risk rather than turning a quick profit. Your profit shall develop with practice and patience. But buying penny stocks requires discipline, consistency and above all else an emotional control. Do not act on a whim; rather, act with purpose while enacting an overall strategy.

Despite the label penny stock and the low barrier to entry, people specifically trade penny stocks online for the potential high returns. A penny stock is a stock that trades under $5.00 per share and has a market cap under $500M.

Savvy traders often trade on multiple returns with penny shares trading under $0.20 to fish for the best potential. For example, if you purchase at $0.15 (you’ll see this called the “entry point”) and sell at $0.60 (the “target”), you create the potential of making 4 times your return.

Think about it: obvious this sort of profit is far more likely with stocks in this low and volatile range.

The key to successful penny stock investing is to get in then get out ahead of the crowd given the general lack of liquidity of penny stocks.

Successful Stock Trading Requires Research and Work

Trading penny stocks to make money requires buying penny stocks online with promising outlooks. This means identifying companies which feature growing profits and sales, an assertive executive team, and a defined & explicit plan for expansion. Penny stock share growth is usually attributed to strong business fundamentals.

So how do you keep up with all this information? Well, despite what some people selling hope online might lead you to believe you need to do your research and you need to spend a little money up front to properly prepare yourself.

You need to perform three basic steps. If you REALLY want to succeed, I’ll add a bonus step.

1. You must purchase and study some kind of reputable and authoritative book on day trading, preferably one that emphasizes penny stocks. Do NOT dive into penny stocks without studying beforehand and without a quality guide at your hand.
2. You must join a penny stock newsletter. This requires paying some kind of subscription in most cases. Anyone who claims you can trade in penny stocks without a quality newsletter is lying through their teeth. As I stated earlier, you need to get in and out before the crowd in order to succeed with penny stocks. You also need to do a lot of research on companies before investing. A quality penny stock newsletter provides you with these advantages. In almost all cases, the best penny stock picks are saturated by members of professional newsletters before they hit the public radar.
3. You need to perform your own due diligence. No matter how high quality or accurate the penny stock newsletter, you need to study stock trading on your own and you need to research and evaluate picks suggested by the newsletter. Quality newsletters provide a great foundation and greatly increase your likelihood of success, but nobody — I mean nobody — will pick winners 100 percent of the time. You need to increase your odds by doing your own research on top of the picks offered you by any given newsletter.

So what’s the bonus step? Am I about to sell you something? No.

But I do suggest you research some day trading software. This will automate many of the small steps you need to take when evaluating a penny stock online. You can at least quickly verify some specific data on the stock recommendation provided by your newsletter. Strong software can also help you do some of your own fast, deep evaluation.

So Which Penny Stock Newsletter?

So at this point you may be wondering… so what penny stock newsletter should I choose to give me the best penny stocks? What book should I buy to study penny stock buying before I dive into it? What day trading software should purchase and install to help me out?

All in due time. My site will provide a page reviewing each of these key areas of choices. I will certainly make my recommendations in each area, but I suggest you take my recommendations as part of your overall evaluation. It’s a good habit to develop when dealing with buying penny stocks.

I have more content upcoming, so please check back with Buying Penny Stocks in the near future. Thank you for visiting and please do return again soon.

I found this interesting article relating to the economic crisis and the mortgage meltdown. Put in on your tin foil hat as some of you may see this as a bit of a conspiracy theory, but I found it at least thought-provoking.

Please note that Buying Penny Stocks isn’t promoting or supporting any single viewpoint on this matter. I just find it to be a compelling and informative discussion of the mortgage crisis. You’ll definitely find some articles on this site (a New Zealand news site) which I find silly and objectionable.

Here’s a glimpse:

Combined with the digitization of the mortgage credit scoring, origination and servicing process, the implications for privacy and personal freedom are simply stupefying. And the best part is that this can be described as the government “helping.”

I have described the fundamental US strategy on numerous occasions over the years. It was my misfortune to try to propose an alternative strategy. When that made me a target of a legal and economic “hit,” I attempted to warn people of the dangers. Those who heeded those warnings avoided direct harm from the burst in the housing bubble, including the drop in Freddie and Fannie shares to penny stocks. While living with the horror and grief of realizing that most would not heed those warnings, I concluded that we were experiencing a financial coup d’etat.

And another interesting sequence much further in the piece:

The financial press this morning reports that Daniel Mudd, the retiring CEO of Fannie Mae, is leaving with a severance package of approximately $9.2 million. Richard Syron, the retiring CEO of Freddie Mac, is leaving with a severance package of approximately $14.9 million.

It would appear that the federal government intends to honor these contracts.

In these situations, observing when the federal government honors its contracts and when it does not often provides a clue to the deeper story.

For example, my company, Hamilton Securities Group, had a contract that the federal government canceled for convenience in 1997. At that time, the federal government owed us $2.1 million. Rather than honor their debts, they claimed the common law right to assert an “offset.”

Read the whole compelling story here: Fannie and Freddie Become Penny Stocks

It seems even skeptics are starting to peer a little more closely at the potential of penny stocks in the current economic climate.

Before we go further I always like to urge caution; buying penny stocks is almost always a volatile practice and it is made even more so with the overall volatility of the current market.

Be sure you’re using polished, professional day trading software and thoroughly exercising your due diligence.

Now read on as even the major players at the Motley Fool are starting to peer a penny stocks with curious eyes. Tim Beyers wrote at the Fool couple days ago:

The promise of outrageous returns is why some of the world’s best stock pickers are, at times, penny stock investors. Peter Lynch has and still does enjoy the stock market’s super-cheap seats. The Royce Low-Priced Stock fund crushes the market by betting on stocks trading near or below $10 a share, such as Sigma Designs (Nasdaq: SIGM).

Even the All-Stars in our 120,000-plus Motley Fool CAPS community take to penny stocks. More than a few have been richly rewarded.

So why not invest in penny stocks? I suppose because the SEC has warned us about them. But what if we take the agency’s definition literally, and limit our choices to stocks trading between $1.50 and $5 a share? And what if we further limit our choices to four- and five-star stocks whose market cap falls between $250 million and $2 billion? Surely our new CAPS screener would return some winners, right?

Interested? Read more: The Next Million-Dollar Penny Stock

It’s an exciting time for the courageous yet cautious among you seeking the best penny stocks.