Trade penny stocks for healthy returns

For the trader looking for potentially promising returns in the stock market, penny stocks come to the forefront. These are stocks with a share price of under $5. The stock trader seeking strong growth looks at these stocks because many of these companies are just beginning to commercialize their offerings and technology. A company with $15 million in annual revenue can potentially multiply its sales many times over versus a company with sales of $15 billion.

To boost the odds of success, the penny stock trader focuses only on the most promising emerging companies. These are companies that are coming out with unique and compelling products. They tend to have pricing power over their clients or cost advantages relative to their competitors. These companies are also rapidly growing their sales and profits; usually well into the double digits. The executives running these companies have the ability to grow the business operations.

Because these companies have a modest stock float, a sudden flood of trades can propel the share price noticeably higher or lower. To maximize returns from penny stock trading, the trader wants to set up opposite of the market. Being on the opposite side of the slew of orders allows the trader to take advantage of either selling prices or purchasing prices.