Trading penny stocks is one of the most lucrative forms of investment in the markets. The reason is because these stocks move fast! When a micro-cap stock gets going, it’s hard to slow down. This can also be fraught with unique risks, which people need to understand and be able to control. If you really want to get started in this lucrative business, you must carefully weigh the risks and rewards.

Penny stock trading requires you to be in tune with the latest stocks on the move. Not only can you invest in these stocks if they get hot, but you can also work on selling them short if they are heavily promoted and have no substance. In many ways, this strategy is often easier than buying the next Google or Microsoft, which only sell for one in a thousand shares or so!

Penny stock trading rewards those who do their own research. I’m not saying don’t use a newsletter or site for tips and tactics, but you should do research contrary to anything they tell you! Don’t trade a stock just because someone told you it was a good buy. This is a great way to fail in this market. Learn how to do your own research and know when people are full of crap so you can discredit their evidence.

You also want to work on your simulated trades. People don’t do enough mock trading! In penny stock trading, time is so of the essence that if you don’t practice, you can lose a lot of money. It can happen in the blink of an eye. Knowing how to properly time your trades will help you avoid commission losses that can create some problems. Work on this and learn exactly what you need to be successful in penny stocks.