Penny stocks could be good picks for those who are looking to invest in a low price stock with best returns. However, before you plan to make investment into penny stocks, you need to have adequate background information related to the market history of the stock they are planning to purchase. You should also gather information related to companies financial performance and quality of the top management. Along with which other useful information is required such as company’s future investment and business plan.

However, those Penny Stocks which are traded only on the pick sheets and over the counter bulleting board (OTCBB) are difficult to track because available details are usually sketchy. Moreover, OTCBBs are not bound by any law to provide key related to their operation and performance. Instead, investors can find important and useful information through alternate sources such as newsletters which are regularly published by penny stock brokers, penny stock network and the various websites which monitor trading of penny stocks. Several of these websites carry a sizable listing of recommended picks on a daily basis.

Brokers who specialize in penny stock trading also maintain their own databases on historical market trends, especially in those stocks which are actively traded. They also keep a close watch on unveiling of significant market and business investment plans. The newsletters offered by these penny stock websites carry analysis of the possible market trends in penny stocks along with other details like special focus on select stocks. Buy and sell recommendations supported by hints at possible triggers are also published in such newsletters. Therefore you must subscribe to such newsletter for best gains in penny stock trading.

Along with this, a growing body of information on web-based networks and blogs can give useful insights into penny market trends. This source of information can be used by investors to check and verify information gathered from other sources. Information provided by these sources will help you to some extent to avoid any likely financial traps that scammers may have laid for gullible investors of penny stocks. For investors it should be their top priority to avoid such traps and it should be their high priority.

Hot Penny Stocks are those shares that trade from .001 of a penny to $5.00. They are traded in decimals and are much more risky than other investments. However, these hot penny stocks can have tremendous reward potential. Some stocks have gone from 25 cents to $20.00.

You just need to keep your eyes and ears open to know what’s going on in penny stock markets. Accordingly, you can adjust your penny stock trading strategy.

I have been through many different styles of full time penny stock daytrading. I have finally found one that produces gains on a daily basis. All my old trading styles produced about 50% – 60% winners, but my losses is what held me back from making a consistant weekly gain.

My new style has to do with OTCCHARTS and NEWS.

1. In the morning, open your "news and filings" section in OTCCHARTS. Click on news. (The filings don't seem to produce many runners)

2. Disreguard all the stocks that are picks by Subway, Hotstocks to watch, or Market Alerts.

3. Put all the stocks that have NEWS into your OTCCHARTS personal watchlist.

4. Click on trades in your personal watchlist. This will bring the stocks with the most trades to the top

5. When the bell sounds, watch the stocks at the top of your watchlist with the most trades. Today, there were only 3 that really had a lot of trading volume right off the bat. Those three were ABXA, NHLC, and XKEM.

6. After about 2 or 3 minutes you will have your plays for the morning. There is only one thing to check before getting into a trade. You have to look at the BID and ASK to see if they are moving north. For example:

ABXA opened at 5.70 X 5.75. Within 2 minutes it went to 5.75 X 5.80. THATS A PLAY

NHLC opened at 12.25 X 12.50. Within 1 minute it was at 12.50 X 12.75. THATS A PLAY

XKEM opened at .045 X .047. Within 2 minutes it went to .045 X .046. THIS IS NOT A PLAY

7. Entry strategy. Do not try to get in these at the ASK price. It won't work most of the time because they are running to fast. I decided to get into ABXA about 2 minutes into today. BID and ASK were at 5.80 and 5.85. I put my order in for 6.00 to make sure it fills. It filled at 5.90. I have missed many runs trying to put my buy in at the ASK price and then chasing it up 20%.

8. Exit strategy. It's up to you. Some have 1 run, some have 2 runs, a lot have three runs like todays ABXA and NHLC. Sell when you feel comfortable. Don't get greedy everytime waiting for that third run.

Article Written by Dave of Stockhideout.com Best Penny Stocks

Penny stocks are inexpensive, lesser priced, highly speculated stocks that can be found sold at $0.99 or less per share. In minutes, these penny stocks can rise or fall 100s of percentage points, occasionally as much as 400%. Thus these stocks are highly speculative. For the penny stock investor, it can be extremely profitable…the risk is significantly less if you know what you are doing.

Finding out which Penny Stocks to trade:

1. Time and Experience

In order to maximize our profits we are making use of a number of trades using small low risk sums that snowball into the big money. Often, Penny stock traders put in the time, months and years to get a feel of the market and develop a penny stock profit gut instinct. After analysing trends, data, making money on some and others, can he develop an understanding on how to trade penny stocks, and even them he can still on his picks.

2. Penny Stock Analysis Systems

There are many "penny stock trading systems" available. These systems help you identify trends and profitable opportunities as they happen. The main problem is systems takes a lot of time and effort in order to study historical trends..

Two computer programmers have created a piece of software which do the following:

-Scans stocks looking for companies which are forming bullish trading patterns

-Companies who stocks show signs of increase

-Records historical information constantly

-Learns more and more over time

-Outputs recommendations of stocks it thinks should be bought and sold

These recommendations are only made when the software is confident in the outcome, based on the huge amount of data it has analyzed.

In the volatile penny stock trades market, not every prediction and recommendation by the software will be correct. In other words…the software cannot predict every possible outcome. The software does account for the trade recommendations which do not work out and is reported to create gains of 105.28% per week.