Penny stocks are the same as usual stocks, but these ones are traded under $5. Sometimes in the USA, penny stocks are also called Over The Counter stocks (OTC). Penny stocks are very cheap, that's why they grow very fast within a short period. Just one day a price for a specific stock can increase over 100%, and this makes investors to become interested in penny stocks.
When trading penny stocks, the information about the stocks can be very unreliable, because the data in such stock exchanges is not controlled, such in NYSE or Nasdaq. The data can often be inaccurate and mislead the investors.
People considering investing money in penny stocks need to be aware of such problem, because otherwise then will end up spending money on non-profitable shares and eventually they will quit, because they won't make any profit.
Penny stocks can actually be profitable, if you are experienced trader and have tested the penny stock market by spending lots of money. However, if you are just starting out with it, then it's very likely that you will have to invest quite a lot of money, because finding out how it works and how you can stay in constant profit.
There are some tools and software, which can help you to trade penny stocks, and minimize the risk of losing money. Some of them are illegal, but there is reliable software, which is used by millions of traders, and is recognized as a very reliable tool for trading stocks. It's legal, save and works with no problems.
The software that I am talking about is called Doubling Stocks . You might have heard about it, because it's very popular in stock trading industry. However, not everyone knows how it works and what the potential of the software is. You can learn more about it by clicking here .