I know that penny stock trading isn't a real big focus on Wall Street. But to that I say, who cares? Sometimes the best things in life aren't necessarily what is popular. That being said here are some advantages to trading penny stocks:
Leverage: There is nothing else in the stock market that can compare to the leverage you get from trading penny stocks. The closest possible competitor are stock options. But with penny stocks you can invest so little, yet get such a potential great return in advance.
More shares: Let's face it, many traders don't have hundreds of thousands of dollars to invest in stocks. The problem with many “safe" large cap stocks is that most people are lucky if they can afford to buy 100 shares of the company. With penny stocks, you get more bang for your buck.
The ability to build a portfolio: If you want a diversified portfolio you can invest modest amounts across varying sectors of the penny stock market. Unless you've got a lot of money, that's going to be tough to accomplish with the blue-chip stocks.
This is how the rich became rich: The rich didn't necessarily get rich by investing in penny stocks per say, but the concept is the same. Most rich investors got that way because they took chances on up and coming companies. They didn't buy into fortune 500 stocks after they made the list. They bought them way before that. Penny stock trading really exemplifies the concept of buying low and selling high.
Chris Braff has become an extremely successful penny stock trader. He found a system which tells you where to find penny stocks that have the most chance of increasing in value. Click here to find out more information.