For those that don't know, buying and selling penny stocks can be an extremely profitable way to trade the stock market.
I know these stocks don't get the same publicity as the big boys.
You never hear about them on CNBC, but I'm sure you know there are ton of huge companies today that started off as cheap stocks.
It happens more times than you think.
Here are some ways to spot a small cap stock that is ready to burst: The idea - Sometimes all you need is one big idea.
Even some of the worst managed companies in the world, became powerhouses just by having a really unique idea.
Innovation will always lead to gains.
Check out their numbers - Sometimes a stock is just incredibly undervalued.
Look at the financial statements.
You'd be amazed how many penny stock companies have more assets, revenue, and net income than many of their competitors.
Check out the charts - If a company has enough trading volume and is ready to pop through a major resistance point, you can trade the stock like a break out.
it's a very fast way to get a nice rate of return.
Keep your eye on the news - I don't just mean earning statements either, I mean all news.
For example if your looking at a penny stock which deals in the development of medical drugs.
Make sure to pay attention to any kind of announcement of approval by the FDA.
This can always turn a small cap stock into a large cap stock.