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Choosing the Right Penny Stocks I
You now know how the stock market works, how penny stocks are different from the other stocks, what to do if you want to get started and how conventional stock analysis just doesn't work with penny stocks. You want to start penny stock trading but you have no idea to how to choose the right kinds of stocks at the right time. To help you in your predicament I have compiled the following factors to consider in choosing the right kind of penny stocks at the right time.

Before I start, I want to warn you that penny stock trading is not a game. If you don't take it seriously you may end up losing a lot of your investment. As I have said before, penny stocks are highly volatile and anything can trigger a price increase or decrease. The trick is to find the right penny stocks and buy or sell them at the right time. To be able to do this you must really be willing to do the research and analysis of the stocks. The more you research and know about your penny stocks, the better your chances of success.

The following analysis would involve examining different criteria of a penny stock. You have to analyze each penny stock for each criterion. After examining, you would know which penny stock is good investment and which is not. Note that it is impossible for a penny stock to rank high in each criterion but the better they fare in more areas the better investment it is for you. Often, just one negative mark on a criterion can send a penny stock's price lower. When you finally find the best penny stock you still have to know if that penny stock is a good investment at its current price. To determine this, you would have to do a modified technical analysis. Sounds like a lot of work? It should as it is not easy weeding out the bad penny stocks from those worth trading. In doing this modified fundamental analysis you would have to examine the following primary parameters: Increasing Revenues, Improving Earnings, Competitive Advantages, Low Debt Levels Insider Trades, Buy-Back Plans, Industry Conditions, Institutional Holdings, Political/Social Shifts, News and Press Releases, Alliances and Improving Financial Ratios. You may be wondering where you will find the information you need on a particular penny stock. Well, there are a lot of good web sites that offer this information for free.

The first criterion that you should look at is whether or not the corporation's revenue is increasing per quarter and by how much. It is good if the revenue of a corporation is increasing because this means that they are getting a higher chunk of the market pie. Their marketing strategies and operational tactics are working and they are growing as a company. It is a good sign that the revenues are increasing faster than expenses. Increasing revenues is especially great for corporation's involving subscribers as clients.