While there are an abundance of penny stocks to watch overall, as a good penny stock investor this number should be narrowed down dramatically to the specific stocks that you think have the most profit potential. Because there are so many penny stocks to watch throughout a number of different markets, ultimately this can be a difficult task. Luckily there are several things you can do as a penny stock investor that can hopefully better your chances at finding profitable penny stocks that can make you money.

Finding penny stocks to watch is partly contingent your understanding of what a penny stock is, and how they are different than more conventional stocks. To put it simply, a penny stock is pretty much the same as a regular stock despite its low share price and where it is traded. Penny stocks typically trade for lower than five dollars a share, and they cannot be found at some of the major exchanges, such as the NYSE (New York Stock Exchange), and the NASDAQ. Penny stocks are usually found on smaller listing services instead of the big exchanges such as Pink Sheets and the OTCBB. Penny stocks are by and large made provided by smaller companies that are just getting started. They are considered to be high-risk, high-yield investments, and most penny stocks either jump or decline by large percentages within six to twelve months of their initial inception.

Knowing just a rudimentary amount of information about penny stocks will not give you enough insight to find some worthwhile penny stocks to watch that can make you money. To find some good penny stocks to watch you will have to dig a bit deeper so that you can find some relevant information that is unique to specific penny stocks.

There are many ways you can go about trying to find this information, and some of the best ways include looking online, and by networking. There is a myriad of websites and other sources online that talk exclusively about penny stocks. These resources contain a variety of different kinds of information that can help you, as most of these places contain general information on penny stocks, perspectives on market trends, penny stock brokerage and company reviews, as well as penny stock recommendations and hot lists. While all of this information can be useful, the most important information if you are trying to find penny stock to watch is the list of hot picks, or recommendations on what penny stocks to buy.

There is a plentiful amount of these types of resources online, and the real question you should be asking yourself upon identification of some of these lists is whether or not the particular resource at hand can be trusted. It takes virtually nothing for someone to publish a hot penny stock list, or a hot penny stock watch list, and many people who do in fact publish these kinds of lists do not have any idea what they’re talking about. The truth is that many of these lists are simply published to help convince people to buy a particular set of penny stocks so that the person publishing the list can later on take advantage of the higher trade volume. This strategy is what is known as “pump and dump”, and it alludes to when a person publishes material for the exclusive reason to boost the stock’s share price. Once the person’s feels that stock’s price cannot be increased anymore, they sell all of their stake in the company and the strategy has worked, the person will have made a nice profit. You must therefore do your own research on the person or resource that is publishing such material before you go ahead and take such recommendations to heart.

To become a successful penny stock investor you should not exclusively rely on hot lists, online resources, and other penny stock publications to be able to find some penny stocks that you feel comfortable investing in. This means that you need to improve your investing skills and acumen, and that means you should also practice as much as possible with your investing. You need to be able to develop an ability to analyze a particular stock and then know whether it is something that is worthwhile to watch. To do this you need to be able to assess a particular companies’ financials and business plan. You need to be able to look at market trends from a macroscopic and microscopic perspective so that you can make adjustments as they are needed. You need to be able to establish your trading methodology so that it becomes second nature when it is in fact time to invest and sell. If you can learn how to do these things you will eventually not have to rely heavily on watch or hot lists, and you will be able to take advantage of opportunities that other people don’t even know about.

Ultimately, finding penny stocks to watch is about improving your investor IQ and assessing as many resources and other data as you possibly can take in. While penny stock hot lists, and newsletters can provide you some good information, they should not be your only source of information. The most successful penny stock investors are the people who become well versed in the companies and markets that play host to penny stocks. If you want to become a successful investor and not someone who is just playing a game of chance, you must do your own homework so that you can feel comfortable making decisions on your own. If you can put in the time to learn the rights things you can eventually make a lot of money with penny stocks despite the high risk.