Why should I trade penny stocks?

There are as many reasons to trade penny stocks as with any type of investment. For new investors, it can be an easy way to "start small" and learn the ins and outs of trading. Let's face it--fast-moving penny stocks also offer a fun and exciting way to build your portfolio. But from a big-picture perspective, the value can also come from diversifying--hedging your other positions and gaining exposure to fast-growth industries and sectors in a highly targeted way.

What should I look for in a penny stock?

In general, you want to look at the quality and potential of the underlying business and financials. The most successful penny stock traders use a combination of fundamental analysis and technical analysis, but they also get a sense for the "art" of penny stock investing that enables them to find the best penny stocks at the most advantageous prices.