The best way to spot these promising penny stocks is to identify and develop the criteria that you will use for identification and then use the appropriate tools to complete the process. For instance, the criteria you develop to investigate the approximately 3500 stocks that trade on the OTCBB may look something like this:

-You will want any stocks that are priced as low as possible so that you have the maximum upside if there is upward action on the price. You may therefore want to search for stocks that are priced between $.05 and $2 (some sources say that the average price of a penny stock is in the region of $.10). Shares that are more fully priced may not be suitable candidates for you.

-A certain degree of liquidity is desirable so that you can either buy or sell penny stocks in the quantities that you wish. You may therefore wish to look at stocks where the average daily trading volume is 75,000 shares or greater.

-Use technical analysis to make sure that the stock price is trending upwards. You may wish, for instance, to consider stocks where the nine-day simple moving average is greater than the 18 day simple moving average so that the upward trend is established.

-You do not wish to select companies that are bleeding cash because they could go under at any point in time without warning. You will want to exclude these companies as well as companies that show a negative EPS or a decline in existing earnings.

-Finally you should check out every possible bit of information or news on the companies that you have short listed. Check the charts on the stock prices to ensure that all the indicators are healthy.

A useful tool for investors who are serious about penny stocks is a stock screener. You can obtain both free and paid stock screeners but, either way, the challenge is in finding a screener that gives you the best combination of fundamental and technical analysis. If you cannot find the right combination, go for a screener that delivers on technical analysis and you can then subsequently perform fundamental analysis on the candidates that remain. It is not uncommon for you to find yourself unable to obtain enough data to perform basic analysis.

A penny stock is officially classed as any stock under $5, and many are under $1. The cheapness of the investment can lure you into rash decisions. Sure, if you have $500 then buying 500 stocks at $1 looks like an impressive piece of business. However, instead of soaring through the roof the stock can go crashing through the floor and the deal doesn’t look so great if the price crashes to $0.50 or less.

If you have a fair amount of money to invest then spreading it across a large amount of penny stocks can look like a smart idea, but this shouldn’t be done indiscriminately, as there are plenty of deals out there which will leave you with burned figures and an empty wallet.

So, the principle here is the same as with any stocks; buy low and sell high. After all, they are called undervalued penny stocks because in theory they should go up in price at some point. Now what you need to know is how to decide which penny stocks are likely to go up rather than down. Unfortunately, like all stock market investments there are no cast iron guarantees and it is essentially a question of timing and of finding an undervalued penny stock before it climbs up to its true value or higher.

There have been plenty of success stories of course. Blue chip companies like Microsoft and Xerox are said to have been classed as penny stocks as one point. Can you imagine the profits if you were able to sniff out the next big thing and buy in when no-one else had even heard of it? Apart from the cash profits identifying undervalued penny stocks is a huge ego boost, the fact that you got in there and had the good sense and the courage to put your money on the line.

When it comes to actually finding cheap stocks which are worth buying into then being guided by analyst’s articles in newspapers or internet sites is a good idea, but you also need to develop your own analytical skills to go with this. Firstly you need to ask yourself two questions; why is the stock so cheap now and what is going to make it rise in the future? It may be that the company or the industry has been going through a tough time but that things are starting to look up. It may be that a potential buyer is waiting to take them over. It could be that they have a new product coming out. Buying cheap stocks is one thing but spotting undervalued penny stocks in another.

Every one aims at making good money from their investment in any kind of stocks. The internet is full of information about penny stocks and brokers providing these services. All that glitters is not gold so one should do their own research work before going to brokers for investment and should, also, be aware of all form of risks involved. If you are aware of top 10 penny stocks, then most probably you will be making a risk free investment. There are several features one should keep in consideration while investing in small cap stocks.

One should go through the balance sheet of the company to know about their assets and liabilities. You should collect information about the future programs of the company and what will be the impact of those investments on the share market. Also, look at the historical development of the company to know how their share price is changing over a certain period of time. If the company is showing good gains then of course it will be a less risky deal to invest in the company’s share.

There are several questions which haunt an individual while investing in the share market. One of the most important factors that a person should consider are the product of the company, whether the company is in a hot industry sector and what kind of technologies they are using, whether its products are in demand and what form of customer base the company has, how old the company is in the market and what forms of developments they have shown in recent seasons, how many patents the company holds, which new products the company is planning to launch and what are the predictions about their sale.

Other than searching on the internet, you can also go through the newsletters and analyst reports by the experts. There are several business channels on which experts provide their advices for investment in various companies. Nothing is certain in today’s world. So, it is not necessary that the company which is on top will always be on top but still there are fewer scopes of losses. Don’t always blindly trust an expert’s advice; use your own brain as well. You can consider three or four of the top 10 penny stocks and invest in different amounts according to their interest. By investing in this manner, you will save yourself from losses if one of the share prices of one of top companies goes down.

Within the company there are two distinct sections; the ATG focuses on providing applications for the government, working with aircraft and missile technology. The other arm of the company is the CPG part, which produced all types of bladed equipment from bayonets to cutlery.

The results which they gave out for the first 3 months of the financial year showed a net income of $622,000 and a figure for revenue of almost $8 million. This represents a big increase of almost $500,000 in the income reported last year, despite the revenue only increasing by some $340,000. A successful cost reduction drive is touted as the main reason behind these positive figures.

The stock price over the last year has varied greatly, from $5,50 to well over $11, so it is a very mobile price and the reliance upon government contracts in a very unpredictable field makes it difficult to predict how this will one will go in the future.

That is the situation with Innovative Health Services Inc (IHSN) but perhaps the stock isn’t such a bargain after all, or surely all those smart operators would have bought a load of them at $0.02 and waited to sell them on at $0.40. Strangely, the price of the stock has sunk since the buy out announcement and we are left wondering if some people who hastily bought shares at the market price when the 40 cents deal was announced are not getting extremely nervous about recovering their money.

A little bit of background work reveals that the 40 cents offer appears extremely generous, as this is 7 cents higher than the last year’s average price. The company has recently started out and has yet to provide revenue, basing its attractiveness to investors for the moment on the background and ideas and track record of the boss, Tim Harrington.

Adding up the figures we see that a 40 cent buy out of the company’s 128 million trading stocks would give the little known and recently started Innovative Health Solutions Inc a value of over $50 million, an astronomical figure for a company like this.

Photo by Office of Governor Patrick

This brings us to one of the main problems when you are looking into penny stocks; there is often very little information for you to make a sound judgment on the stocks. At least with the big companies you know their products, you see their annual reports in the news and you are familiar to some degree with their prospects and some of the risks they face. If I say the name of any top stock I bet that most people could give me a pretty good run down on some key elements of their business, the names of a few rivals, possibly even an idea of whether they are making money or not.

When you look at buying a penny stock then a name like Innovative Health Solutions Inc really tells you very little. Look up the internet and you don’t find out a whole lot more about them either. This gives you a choice to make, be guided the little information which you can see or wait until a company with a more checkable history comes along. Some people like the mystery and the gambling element of backing a little known penny stock and waiting for it is to rise. That’s all fine and well but you want the thing to make you money as well and for that the best suggestion would be to do your homework on a company and find out as much as you can about their market and what the future might hold for them. Only once you have done all of that can you really say that you are making a stock market investment and not a blind gamble.

An example of a cheap stock which may produce an upswing in the near future is Strategic Mining Corporation (SMNG). At the moment they cost $0.07 but recent positive signs are giving market traders reason to believe that it could become a hot stock fairly soon.

To find out the reasons for this we have to cross the Atlantic Ocean to Guinea, which is located in Africa. In this West African country we discover that Strategic Mining Corp (SMNG) sown a gold concession, which goes by the name of Siguiri. In the last couple of days this potential gold mine (and for once I have used the term correctly) has been upgraded to receive the classification of “property of merit” in a geological report commonly known as the CPR (Competent Person’s Report) but known in the trade as an NI-43101.

The area in question is located in the Birimian trend and a little bit of further investigation reveals that this is the current gold hot spot and the center of a lot of people’s hopes of finding the precious metal in very large quantities. This is not a guarantee of anything, I am sure there is plenty of land in Saudi Arabia without a drop of oil under it, but the story is beginning to get more interesting.

The expert who carried out the geological survey was Hendrik Velhuvzen BSc, MSc and his report suggests that the land that Strategic Mining Corp (SMNG) owns in West Africa is worth investigating and that it may have the potential to mine gold there.

There is still nothing concrete, which is why the price of the stock hasn’t risen yet. Now is the moment where the smart penny stocks buyer has to keep his eyes and ears open for more information. If they find gold in them there Guinean hills then the Strategic Mining Corp (SMNG) stocks are not going to last be valued at $0.07 for a lot longer.

We now have to wait for further updates from Siguiri, to see if the geological report is the beginning of a real success story for Strategic Mining Corp (SMNG). It is a good idea to keep a list of possible penny stock purchases like this one and do a daily check of news stories, press releases and analyst’s commentaries. That way you will be ready to move whenever a key development takes place, while other potential investors are just starting to look out their world map. You can be sure that the professional traders have already taken a note of the name of Strategic Mining Corp (SMNG) and that they are waiting for more news, just as they are waiting on a breakthrough on any of a number of companies who could be the next penny stock star.

That is exactly what was happened to the stocks of eCrypt Technologies Inc (ECRY) following the launch of a comprehensive advertising strategy. The rest of the stock market may have been having a rough time of it but the professional traders who had gotten early word of the company’s advertising campaign launch made huge profits as the stock’s price skyrocketed by over 27% at one point in the day before settling for a slightly more modest but still very pleasing increase..

The new marketing plan announced by eCrypt on Friday, May 14th covers the whole spectrum of internet and television announcements and is expected to be the catalyst which will see a rapid growth in the company revenue. The company specializes in smartphone security options by providing a safe channel between two users who wish to communicate confidential or private information. This system uses one off codes which are not stored anywhere which could be accessed by hackers and is expected to have a big take up.

Having doing the preparatory work and with the product fully honed eCrypt (ECRY) now sees the time as being right to make the public aware of this new service. The good news for small stock market investors is that many got a good piece of the action, as penny stock listing mails informed many people of the upcoming announcement in time for them to grab cheap stocks before the series of 30 second slots on CNBC had been publicly announced.

Now the lucky ones who bought the stocks at around 50 cents each have to face the second decision which every penny stock investor comes across; when to sell. As with any new cutting edge product it could go either way for eCrypt (ECRY). There is every chance that it corners the market and goes on to become a highly priced share. Equally, things move very quickly in the technological world and new innovations and competitors could bring the shares down with a bump.

That’s the thing with penny stock investments, there is no time to sit back and gloat about your great stock purchase. As soon as the price goes up you need to start investigating what might happen in the future and looking for analyst’s tips on when it might have reached its ceiling. You should also be looking out for other possible great penny stocks by focusing early each day on those penny stock mailing lists you subscribe to. Those who left the mail sitting in their inbox until midday were left facing the choice of jumping on the eCrypt (ECRY) bandwagon when it had already started its journey or waiting for the next one to come along.

Commodity trading helps people to predict future prices of various goods. Trading of oil as a commodity is very popular due to its frequently changing prices which also affect prices of other goods as well. There can be several factors that affect oil prices, like difference in oil supply and demand, improper distribution or political influences.

Oil is a non renewable resource so its price will be increasing while quantity will deplete. Investors have started to invest in oil penny stocks due to its rapid rise in price over the last few years. These stocks come from small oil companies. You can easily trade with penny stocks due to low price. Investing in small oil caps seem like a good deal as one can make good profit in a short period of time as compared to other form of stocks. Different companies use different methods for production of oil. Costs incurred in the production of oil also affect the oil price and profits.

Before opting for investment in any type of stocks, one should do research work in depth. There are several companies involved in oil manufacturing and trading. Different brokers may provide different deals. If you are new to commodity trading, then you should seek advice from some experts. One can learn from the internet, as ample information is available on the net while the television or print media is also a good source to gain knowledge. Analyzing the previous records of a company will give ideas on how beneficial it will be to invest in the particular oil firm. Find the firms according to their future scope, and also don’t neglect the background of the company.

Everyone wants to make a huge amount, and this is the reason behind investing in oil penny stocks too. No doubt, one can earn good profit from small caps but these are risky as well. One can buy the oil micro caps when their price is very low and sell them when price goes high. But to deal with all these things, you will need deep knowledge of the stock market. You can ask your broker to make all the deals for you; however, commodity brokers generally charge more brokerage than others.

Do not blindly invest in oil penny stocks as this might be a loser’s deal for you without a proper research. Most of the oil small caps firms have fewer equity and assets as compared to large stocks so investing in small caps are always riskier. You should invest as much money as you can afford to lose, otherwise you it might lose all in vain. Looking at the huge profits, traders mostly ignore the risks involved with penny stocks. You should decide wisely instead of being emotional for any form of decision in your investments.

Remember that last week the first round of picks earned us a 20% gain using CMLT, PTSH and MIRA. Now we are looking at:

TNRI which closed at .0032 the week it was suggested, is now worth .0015 for a 53% loss.

SOYO which closed at .4 the week it was suggested, is now worth .35 for a 12.5% loss.

RPDM which closed at .0027 the week it was suggested, is now worth .001 for a 63% loss.

This was a beating. But closer to what I expected than the first round of picks that actually had a gain.

How bout the running total? The first week left us with 361.8, 360 of which we invested in the above stocks which gave us an average of -42.8% and a running total of 207.72. Meaning that overall we would have lost close to one third of our initial investment. Still think penny stocks are a dream come true? Let’s keep exploring shall we?

Last weeks picks are now:

ZIPI .019 from .029 for a 34.5% loss.

NXHD .0006 from .0012 for a 50% loss.

MDOR .61 from .7 for a 12.9% loss.

Really? Your stock picks are now down again? A total average of 32.5% and we have a week to go?

I firmly believe that the website in question really does not have a good hot ‘n cheap penny stock picks list and that they are just duping unexperienced investors. I am pretty close to positive you will see the same in the coming weeks.

The new line of stocks selected from their suggestions are:

GRDO for .0015

CENV for .005

PURO for .104

So let’s review the first three picks again.

CMLT: CMLT was recommended two weeks ago at it’s closing price of .001. CMLT is now worth .0018 for a 80% gain (not including the intraday fluctuations that could have netted a larger gain). This is down from the 300% from last week. Still a winner.

PTSH: This penny stock was recommended two weeks ago at it’s closing price of .0014. Today PTSH closed for .0015, giving it a gain of 7%. Again we exclude the intraday trading. This covers the 7% loss from last week and gains another 7% to make this a winner.

MIRA: This penny stock was recommended at it’s closing price of .04 two weeks ago. MIRA is now at .03 for a 25% loss. A gain could have been made last week at 12%. But holding out on hopes for more would have been costly.

This gives us a total average, from the first three stocks, of 20.6%. Still a nice little gain for a two week holding.

Now let’s look at the penny stocks listed early last week.

TNRI which closed at .0032 last week, is now worth .0026. This gives a 18.75% loss. Ouch.

SOYO which closed at .4 last week, is now worth .39. This gives a 2.5% loss. A loss, but not devastating.

RPDM which closed at .0027 last week, is now worth .0013. And worst of all, we get a 51.8% loss.

Let’s keep a running 2 week tally from this penny stock list, using their daily picks at random to really determine profit potential. Since we have reached the two week mark for the first three picks, lets assume a low 100$ investment into each pick. After selling, the initial 300 investment would now be worth 361.8.

That means we place 120$ into each of the current three picks.

We will revisit these picks later in the week when they get closer to the two week mark. But now we will introduce the next three.

ZIPI .029

NXHD .0012

MDOR .7

If I had to venture a guess, then I would say that this hot penny stock picks list is nothing but a hype site that spits out random penny stocks. I have yet to see a discernible pattern for their picks and that is why I have withheld the URL until I have determined their legitimacy.