The major problem with "trading" penny stocks is that they do not trade in a regulated market. The quotes that are displayed or shown are not firm so it makes it difficult to "trade" in addition to the quotes there are no real market makers and/or specialists.
The availability of information about the company is very limited and what is available is very questionable. Most penny stocks do not flle timely reports with any regulators
Penny stocks ARE NOT for newbies. Only those with trading experience should consider trading in pennies since they understand the market, the risk and the problems associated with penny stocks.
Those with securities experience will tell you that you are foolish to start in the market by using penny stocks and those that are in business will tell you not to do it.
So with experienced investors/traders telling you not to do it, and those that are professional tell you not to do it, and even the Securities & Exchange will not recommend you do it, why do you think you can make any money.
Before you enter an order for penny stock, read what the SEC has published regarding penny stocks http://www.sec.gov/investor/pubs/microca...
The same method that you pick large caps. You research the fundamentals. If you haven`t been successful investing in large caps ,what makes you think you have got what it takes to pick out good penny stocks.
Firstly You should commence abiding by an expert in this area. You can also get newsletters and alerts from a reputed site.
