There is one main reason that people invest in penny stocks. That is for the potential to make huge money. Penny stocks can make very big moves and these very big moves can equate to a lot of money. The problem is that you need to find out about these penny stocks before they make these big moves. There is a method that can help most traders, whether just starting out or experienced find penny stocks that are on the verge of exploding.
First things first. Never get into a penny stock that has barely any volume traded and has a wide spread. These can be risky. A wide spread means the selling price is much higher than the bidding price. You may get stuck in stocks like this and could lose a substantial, if not all, of your investment.
Now the method.. one of the best ways to buy the best penny stocks out there is to get ideas from a person who has a track record for buying penny stocks before they skyrocket. There are online penny stock newsletters that offer premium services and premium picks for a nominal feel. These newsletters often have experienced analysts who can identify penny stocks that are poised to break out. They look at the fundamentals of penny stocks and can piece together clues that make them believe a penny stock is about to make a big move. They then pass on these tips to subscribers. This can save you a lot of time also.
You always want to buy a penny stock before it soars to make the maximum profits.