But where to go to find the latest hot stock to make money. Well there are many different websites that offer to send stock alerts to your e-mail. These websites are nothing but a bunch of penny stock chasers. These websites (not all of them) are known to use what is referred to as a “pump-n-dump. A practice that has been used for many decades, but that is for another post.

I’ve use some of these sites to do research on the accuracy of their picks. I’ve found that in most cases, stock stock in question will go up in value by more than 10% to 50%. The problem is that the price per share won’t stay there for long. The early investors who got in on the stock before the herd start selling their shares which in turn bring the price per share down trapping the average investor in the stock or having them take a loss.

If you’re able to be home or in the office watching the stock streamer all day, you can capitalize on the situation. If you’re not able to do that, I suggest you stay away from trading in these stocks.

If you’re looking to make money on the next big growth stock, you need to find the company that will bring the next best product to the market that the industry is looking for. Right now there are plenty of alternative energy companies out there that are just about to explode. Start doing research into many of these companies to see if they have what it takes to go to the next level. Once you do, build a position in the company’s stock. The buy-and-hold strategy will pay off in the long haul if your research is correct.

In my opinion, if you’re new to the stock market and don’t have a total grasp of it all (or at least most of it), I say stay away from trading or investing on penny stocks. You can make a lot of money, but you can lose just as much if not more of your capital.

When I start looking into a small-cap company, especially one whose stock price is less than a $1.00, the research that I need to do is much more involved because the lack of analysts and other resources I would use to get my information. a few times I’ve called the company to talk with the the CEO (Chief Executive Officer) or the CFO (Chief Financial Officer) to get a feel of the management and their confidence in the direction of the company. You would be surprised how much they’re willing to talk to potential investors. Go visit their website to get their latest financial report. You’ll also need to look at their competitors within their industry as well as their potential market share.

If you’re wondering about how to buy penny stocks where you can get rich overnight, be advise that those stories you hear are mostly from these “pump-and-dump” website or brokers. Yes you can make good money if you’re quick enough to buy and sell stock (in most cases) within the same day. I’ve seen too many times from beginners investing in penny stocks see the gains, but wait too long before the Profit-takers have already sold out their position. If you are someone who can not be around the computer all day while the stock market is opened, then you shouldn’t be thinking in this type of stock trading strategy.

Another thing you have to keep in mind is not to put too much capital into a penny stock that you are not prepared to lose. So often investors will lose 75% or more of their investment in a penny stock. As with any investment strategy, you should never put all of your capital into any one sector or stock. All stocks rise and fall in value and when it comes to penny stocks, their price swings are drastic.

If you’re asking about how to buy penny stocks as in, Where do you find a penny stock broker? There are many different online penny stock brokers that you can use. These days it’s a lot easier to trade online than ever before. TD Ameritrade, Zecco, and Scottrade are just a few you can use, but make sure you read their list of fees they charge for stocks that trade for under $1.00. There are some that will have extra fees to when trading penny stocks. I wrote a earlier post about the difference between some of your choices.

It’s no longer like it was back in the days when you had to deal with a small brokerage firm to be able to trade penny stocks and accept whatever fee they were going to charge you. Even in the beginning of the online stock brokers, you weren’t able to trade but a few stocks valued under $1.00 and to trade sub-penny stocks (< $0.01) was out of the question. Today most of the popular online brokers like, TD Ameritrade, Scottrade, Zecco and E-Trade will take orders for penny stocks.

So the question is, which one? In my opinion, I prefer to use TD Ameritrade. They were recommended to me by a friend and I’m glad I did. I have also dealt with E-Trade as well, but the tools and the customer service I receive from TD Ameritrade surpasses E-trade, so now I only use them. Their fees per trade ($9.95) are more on the higher end than their competitors, but since I do so many trades per year, when I mentioned that I was thinking of going somewhere else, they lowered the fee for all of my accounts to just $7.00 per trade no matter how many shares I purchase.

Scotttrade is just as good as TD Ameritrade with their tools, but from a few traders I talk to say their customer service leaves something to be desired. Their transaction fee is less than TD Ameritrade at just $7.00 per trade. but for trading penny stocks they charge an extra fee. They refer to it as a Low Price Stock Fee. Scottrade will charge ½% for stocks under $1.

For those of you who have your own Stock market software, you might not need to use one of the mentioned websites. So in that case you need to look at Zecco. This online stock broker only charges $4.50 per trade, no matter the size. They also have the least amount (actually none) of fees. Zecco doesn’t have a minimum balance requirement either. Great for investors who are starting out with a small portfolio. Zecco also offers 10 free trades per month providing you do a certain amount of trades per month.

There are so many that I really can’t list them all here in this one post. Look for yourself and you will see more choices than you were really looking for. Everyone is different and so are their lives, so you are the only one that can make this decision for you. Most of these penny stock brokers applications will only take you ten minutes to fill out and transferring money is easy too.

But you need to use wisdom and some reliable advices from experienced traders to make money out of it. And if you are solely investing because of huge dividends, you might not succeed in your online trading career. You cannot just buy stocks a day before it goes ex-dividend then the next day, sell them and receive your dividend. The shifts of stock market are unpredictable. The stock prices might go down by the amount as the dividend. For example, a certain company has a share price of 100p and its dividend payout is 5 %, when it finally goes ex-dividend, it will be reduced to 95p. So no matter how high the offered dividend is, you need to consider a lot of factors in making good profits. And going in and out of stocks just before they go ex-dividend will not work for you if you aren’t that wise.

The secret? You have to find a company that is currently oversold and is about to pay a full year dividend in the next months with stock screening software. A lot of traders often buy those that are due to make good dividends few weeks or months before the stock goes ex-dividend. And if the share is oversold, be assured that you are in a very promising position since the stock price will sure to go up.

Obtaining reliable investment information on the penny stock market is extremely difficult because of the scarcity of dependable corporate data in the treacherous world of the OTC and pink sheets. By the time a professional stockbroker were able to pass along important news about a penny stock, it would probably be too late to capitalize on it. Generally speaking, if the broker is strongly promoting a specific penny stock issue, he stands to benefit financially under the table, one way or another. The responsibilities of a stock broker do not mesh with the qualities of a good financial advisor. The broker is compensated for the amount of dollar volume he generates via stock sales. He is interested in generating high commission sales, not providing quality financial planning advice. He is naturally going to be interested in generating the quick buck via high commission sales, not working towards establishing a long term client relationship. On top of that, you end up paying triple the charges for receiving poor investment advice.

Stay clear of these charlatans and hook up with a reputable online penny stock broker. Generally speaking, you will not be communicating with anyone from the brokerage, unless there is an administrative question regarding an order. You will not be pestered by any salesmen looking to make a quick buck, leaving you free to perform independent investment analysis and place orders at your own discretion. You will be able to focus on the data that actually causes stock movements, such as the real time price of the issues and the commonly used pertinent mathematical ratios.

If discussing your finances with a professional is important to your peace of mind, then seek out a financial planner who charges a fixed fee for his services, and who does not have a vested interest in the actual stock transactions. The wave of the future for penny stock investing is strictly through the internet.

There are several great advantages to starting out with penny stocks. For starters, as mentioned earlier, it is the perfect starting ground for new traders as they have the freedom to purchase these cheaper stocks to get a feel for the stock market. By going this route new traders can confidently test the waters and see what it is like being a trader without risks of losing thousands of dollars on a bad investment, unless of course they purchased thousands of penny stocks at once. On that note, it brings up another good advantage to penny stocks as it is easy to buy maybe hundreds of them if you have the money and are willing to risk it in that way.

Just as there are advantages to penny stocks, as in most anything, there are disadvantages as well. Since the stocks are so low cost it could be awhile before seeing a significant increase in value when just buying a few. When dealing with them one tends to need to have a lot of patience to play the waiting game which can be stressful worrying if you hit the jackpot, so to say, or if you lost everything on them. Another disadvantage can not be stressed enough as it has been mentioned several times throughout the article but there is always a chance of losing everything you invested in them so be careful! In the end it is best o do a lot of research into something like stock trading as it can be complicated at times but can also be well worth it. Just be careful where you get your information and be very wary of spam e-mails sending you free stock tips as often times they are part of a scam.

Just remember to study and learn a little bit about penny stocks to buy before rushing into it as a little bit of knowledge can help keep you safe in the stormy seas of investment trading.

But penny stocks have a different kind of potential, that most newbies in the stock trading industry seem to overlook. Firstly one considers the price per share in the stock market.Since penny stocks are exactly what its name indicates, the price per share ranges from a few cents to maybe a dollar or two.

So when we look at the price and the range with which these climb up and down in the Intra-Day Market ( Buy and sell the stock in the same day), you need to be aware that you can lose or gain a lot in one day.It’s fluctuations like these that keep many new investors from trading penny stocks.

Now if you look at the details of of a stock you can buy with $100. A Blue Chip company with $100 per share would give you one share at that price, but a penny stock with a $0.10 per share will give you = 10,000 share at that price. Blue chip stocks will rise and fall within a few pennies or a dollar, which counts for about a 1% change. If the $0.10 stock goes up a penny or two, you stand to gain 10-20%. so unlike blue chips stocks, penny stocks have much more room for growth. In a world of Emerging Markets it is these penny stocks that have the potential to grow faster than expected. Provided that you choose the right penny stock, you can make huge gains with them. Take into consideration, that since these companies are new and are trying to make it big, they could also go out of business and you stand to lose all of your investment.

Let’s start with the concept of someone giving you free advice on which stock to buy and when to buy it. What’s in it for them? That’s the first question that comes to mind when I think of these websites. If they send you free e-mails and don’t ask you for any money on return, then how do they make their money? To get one thing straight… getting a tip on a stock is not the way to play the stock market. You need to do your own research on the stock that you are looking to purchase. Don’t be what I refer to as being a penny stock chaser.

These websites are more designed to get others to buy into stocks that they’ve already set up a position in and are waiting for the “new” investors to jump on the band-wagon and cause the price to go up. When that happens, they will scale out of their position and leave those who are not as quick to get out before the price drops back to where it was.

In my research of these websites, I signed up for their e-mails and track how the stock moved. In many of these cases ( over 85%), I would never own or invest into any of these stocks. Their balance sheet and the financial reports of these companies did not look good. As a matter of fact, one company in particular WDAS.PK, was being hyped by three different websites. What did the stock do from the e-mails? What happened was unbelievable. The first alert was on Sunday Oct. 11th. Telling their subscribers to buy at $0.05, but when the stock opened on Monday it was at $.40. Updated alerts went on stating that the climb wasn’t over and to buy at $0.40 – $1.20 per share. I will say that those who timed it well, made a ton of money if they sold their shares around $1.85 – $2.00. It hit a high of $2.00 before closing at $1.85. In just two trading days it closed at $0.48.

During the entire 10 trading days from when they first talked about WDAS.PK, the stock went up and back down again to where the ride started at. As of this past Friday, Nov. 20th, it closed at $.20 per share. Was it good to “play” this stock tip? Only if you were able to watch the day to day activity of the stock, was it worth it. The stock came down a lot quicker than it went up. I’m sure many didn’t get out in time and suffer a loss.

My advice to you is to do your own research and not to take anyone’s advice at face value. Just because someone or some website says it good, doesn’t make it so. I know it may be harder to do research on companies that trade on the pink sheets because usually these companies don’t have analyst watching them. Some information is out there, but you have to watch for fluff articles that publicist put out to help boast interest in the company.

Online penny stock trading has been a big favorite among the home-gamers trying to make it in the stock market. I’ve said it before and I will continue to say it…You can make a boat-load of money in trading penny stocks, but you can lose it just the same in a bad penny stock investment. I’ve watched stocks go up 30%- 150% in just one day, only to see them come down to even lower levels the next day. Yes, some people did make money, but only the ones that were aware of the situation to sell on the first day.

To make matters worse, it seems that some of these penny stock sites will go ahead and inform you that a stock they’ve been following has climbed 40% or better (but if you’re like me and doubt many different trading strategies offered on the web), you’ll might see that they really didn’t start announcing their praise until the stock in question had already rose in value. If you don’t do your research and your homework on any stock you want to buy, you can’t blame anyone but yourself for the consequences. If you fell for the hype that some of these websites spew out on a daily basis, you will have lost most (if not all) of your money.

Take into consideration that even a broken clock is right twice a day. These websites will at times get it right and pick a company’s stock that will climb by leaps and bounds. If you get in at the right time, you will profit from their recommendation.

If you really think about it for a minute, why is someone that you never met and most likely never will, want to give you a list of penny stocks that he recommends for no charge? What a great guy that he would want to help total strangers make money in the stock market and do it at no cost to you.

Because in a sales pitch like stock trading you have to give away something to get the person to see if you know what you’re talking about. Trading in penny stocks is big money for brokers and the houses they work for.Why is it that penny stocks seem to be a big thing within the stock market? Well actually they’re not as big as you may think in regards to owning the shares. The smart money ( the pros of Wall Street) don’t buy and sell penny stocks, there’s too much risk involved. Instead if they want to get into a company that has it’s shares at penny stock levels, they’ll actually loan them the money with interest.

They may seem like a big thing to you and others that you may speak with, but not when it comes to the smart money on Wall Street. It’s the amateur trader and the day trader that wants to trade in penny stocks on a regular basis. The reason for that is that they have the reputation of having big percentage gains (or losses) in any given day. You can make (or lose) a load boat load of money real quick.

If you’re looking to get a list of penny stocks and plan on buying and selling them, be careful, it can cost a lot more than just a few pennies.