Penny stocks can do either one of two things: win you a lot of money in the shortest time, or lose you the same amount of money, in the same span of time. Clearly investing in penny stocks takes a lot of know-how and well done research, if you want to avoid getting burned as result of making unwise and uneducated speculations.

Because penny stocks are volatile the best way to deal with them is though day trading. Penny stock gains may rise sharply and fall in the same day, which is why you need to have your eyes peeled on the sudden surge of demand to be able to catch that wave and ride it.

After selling off your shares in the same day and raking in on the profits, you can rest easy at night, no longer worrying about the status of your stock since its no longer in your hands.

Another tip if you want to make money with penny stocks is to choose a company that knows how to make a profit. To know which companies are worth your time and money and which ones should take a hike, subscribe to their mailing list and track their investments.

One such penny stock newsletter is Michael Cohen Doubling stocks newsletter that provides you with a few hot penny stocks picks each week. You can either take that recommendation and pass it to your broker to trade or use it as reference to determine which penny stocks are hot.

If you are a beginner in investing, the best tip would be not to create your entire business portfolio on penny stocks. As said before, penny stocks are volatile and risky.

Get started on a stable footing and choose stocks from companies that have been in business for a longer time, since they can offer more chances of getting you a profit.

Source by Ricky Lim