Online Penny Stock Trading - Avoid Scams, Enjoy Profits

Finally, a site dedicated to providing quality information on penny stock trading rather than trying to sell you scams!

With Online Penny Stock Trading, we take a serious and professional look at the business of trading penny stocks. We do not promote stock picks or sell products related to the penny stock market. We examine and present the cold, hard facts, and provide leads to legitimate established brokers and references. If you are patient and diligent, this site can, in fact, help you understand how to make legitimate money.

Penny stock trading is not a means to “get rich quick”; it involves both serious work and serious risk. Please see the following index for help navigating this page. Each section will be more thoroughly explored with its own guide on this site.

What Is Penny Stock Trading

Penny stocks are issued over-the-counter (OTC) through institutions such as the OTCBB (over-the-counter bulletin board) and Pink Sheets. These are common stocks which lack market capitalization. Sometimes they’re brand new, but sometimes they’ve been de-listed from the stock exchanges.

Some people think penny stocks are traded thinly, however share volumes often exchange in the several hundred million range daily. Because of these millions of exchanges and low prices, this type of stock is often manipulated by organized promotion (or to put it simply, hype). This can be difficult to combat as often it is difficult to find verifiable information on penny stock companies.

Sometimes it is not the company itself that participates in this promotional manipulation but traders attempting to exploit the market through its volatility.

In the U.S. markets, the specific label “penny stock” refers, in a general sense, to stocks traded beyond the major stock exchanges (NYSE or NASDAQ).

But technically, the SEC (Securities and Exchange Commission) defines a penny stock (or micro cap stock) as a speculative low value certificate for a small company, regardless of its market capitalization and regardless of where it is traded.

How To Trade Penny Stocks

In this section we will provide a brief summary of the actual penny stock trading process. While it isn’t that difficult from a technical standpoint, you should evaluate a number of variables before you begin throwing your money into the delicate process.

For more details and some specific caution, please visit my full article on this topic: How To Trade Penny Stocks.

Trading penny stocks boils down to the following process:

Research the entire market and practice online paper trading before you even consider proceeding.
Open a stock trading account with an online stock broker. For more information on how to choose a broker read my article: Penny Stock Brokers.
Familiarize yourself with your broker’s specific conditions and terms, particularly their transaction fees.
Connect your bank account with your broker’s account. This can take a few days. I suggest keeping a separate bank account which you strictly use for penny stock trading.

Once you’re technically setup, you’ll need the following data to execute your trades:

Find out where the stock is traded. (NYSE? Pink Sheets? OTCBB?)
Know the stock’s ticker symbol.
Define the volume (the exact amount) of shares you want to buy.
In most cases you can save on fees by trading penny stock shares in multiples of one thousand.
Define your specific purchasing price.
IMPORTANT: Define your expiration date. This is how long you wish to hold your order open, or the last closing date on which you would accept this exact trade stock, price and volume.

In the opposite direction, you’ll use essentially the same penny stock data and same process while executing a penny stock trading limit order.

Again, for more details on this process please read my full article on How To Trade Penny Stocks.

Where To Buy Them

As you delve into the world of penny stock trading, you will discover organizations and services who offer to both pick your stocks and buy your stocks for you. Steer very clear of these kinds of services. Instead, purchase penny stocks through your established micro cap stock broker.

Again, please see my article on penny stock trading brokers for more detail, but you should generally find yourself trading penny stocks with familiar names, and always trade from your established online trading brokerage account. I also suggest reading an overview on how to consider different brokers in this article: Where to Buy Penny Stocks

Some common, trustworthy names you’ll come across include Vanguard, Charles Schwab, Fidelity, Scottrade, Sharebuilder, TD Ameritrade, Zecco, E*Trade. There are plenty of others of course, but these are the most established and trustworthy of the online penny stock brokers.

Yes, some of these major stock brokerages are more expensive then certain advertised services out there. But remember, we’re talking real money here, and there are plenty of scammers ready and willing to exploit the foolish and naive. So stick with well-known, reliable online stock brokers.

Fraud and Stock Promotion

In another article, I will go into much greater detail on the various known penny stock fraud schemes. But for now here are the most common penny stock fraud schemes: Pump and Dumpp, Chop Stock, Biased Recommendations (or Sponsored Picks… your friendly neighborhood “penny stock newsletter” probably engages in sponsored picks), and Offshore Brokers.

Before you abide by any advice provided to you, be sure the provider of this advice isn’t associated with any of these known penny stock manipulation schemes. For more on this financially delicate matter read my evolving penny stock fraud article.

Stock Trading Software

Penny stock trading software provides the essential tools you’ll need to research penny stocks, collect vital data and execute microcap stock trades. In some cases you may find application packages that also help you manage your brokerage accounts.

There are generally two flavors of stock trading software: all-in-one packages try to cover every possible functionality, and specialized packages, which focus on a single component and fulfill that purpose entirely.

Component software is usually more focused and more potent, while complete packages often lack versatility and appeal to the more casual traders.

In many cases these days, you can rely on your established penny stock broker to provide you with the services and software you need. However, if you plan to day trade penny stocks, especially aggressively, you may need to invest in some specialized applications.

Charting software is a common component application utilized by day traders to create a graphical representation of the data to assist them in making the necessary quick decisions involved in this type of trading.

I hope this article has given you a good overview of online penny stock trading. If you’ve really read this far, congratulations. You’re well on your way to learning the art and science of online penny stock trading.

How to Analyze Penny Stocks Safely: No Sales, No Hype

You came here to learn how to analyze penny stocks safely. Good. I care more about preventing losses than bragging about gains, and this guide reflects that bias. If you’re sincere about both the “analyze” and “safely” parts of that query: Welcome. You’re in the right place. It’s safer here. Table of Contents: What “safe” means in a high-risk corner Penny stocks are speculative by design; safety is relative. Your goal is to shrink big, permanent losses while leaving room for controlled upside. Start by deciding what you refuse to risk: your emergency fund, rent money, or anything you’d lose sleep over. Then cap your exposure to a tiny slice of your portfolio, and write the limit down before you ever click Buy. TIP Define your maximum loss budgetSet a strict dollar cap per position and a monthly cap across all penny trades. If you hit either, you stop trading

How to Analyze Penny Stocks Safely: No Sales, No Hype

What Penny Stocks Have Long Term Potential?

You came here asking what penny stocks have long term potential. Good question, and the right spirit. You want upside; I want you to keep your savings intact. Let’s meet in the middle. Table of Contents: Penny stocks are cheap for reasons that rarely vanish quickly.1 Sparse information, thin liquidity, and promotional noise keep many names stuck in the basement.1,3 Still, you can stack the odds; a small subset grows up, uplists, and compounds. The work is to separate tiny from terminal. The ground rules I refuse to bend If you want a list, you’ll be disappointed. My job is teaching you how to think, not feeding tips. I’ve sat in investment committees where a single sloppy assumption cost millions. You will borrow that paranoia. Translate the question into a filter The phrase what penny stocks have long term potential hides a better question: which tiny businesses can survive transparency

What Penny Stocks Have Long Term Potential?

No-Nonsense Guide to the Best Penny Stocks for Beginners

You came here for the best penny stocks for beginners. I respect the impulse. You want a short list, a green light, a real map. Here is the responsible truth: the only safe way to approach this corner of the market is to define “best” as “least likely to ruin you.” Read that again. My job here is to help you define a no-hype, no-nonsense list of the best penny stocks for beginners, then teach you to manage them like a pro. And that is exactly what we will build together.1,2 Table of Contents: What “best” should mean if you are new Being new is not a character flaw; it is a risk variable. Learn in small bites. For the best penny stocks for beginners, “best” means two things: information exists and trading mechanics work. Information means the company files, discloses, and communicates in ways you can verify. Trading mechanics

No-Nonsense Guide to the Best Penny Stocks for Beginners

Build a Pre-market Gap Penny Stock Scanner That Works

Picture your screen at 6:15 a.m. Eastern. Quotes flicker. A cheap biotech grinds upward on a fresh headline, and a freight train of chat-room volume follows. You do not chase the noise. You already built a pre-market gap penny stock scanner, and it is feeding you clean, ranked candidates with reasons attached. Your coffee is still hot, your decisions are cool, and your risk limits are set. Table of Contents: Understanding penny stock gaps First, let’s level set. A gap is the space between yesterday’s close and the first pre-market print. Penny stocks live in the messy part of the market where liquidity thins and stories multiply. Check the exclusions. Under SEC rules, penny stocks generally include equities priced under 5 dollars, with specific exclusions for certain listed securities. That context shapes how these names trade during the thin early hours, so build rules that respect it. If you build

Build a Pre-market Gap Penny Stock Scanner That Works

Fractional Penny Shares Investing: Practical Practice for Small-Budget Stock Hunters

So who this is for, and what you’re trying to do? You want to put small dollars to work without turning your screen into a slot machine. You’ve heard about fractional shares. You’ve heard about penny stocks. Put them together and you get fractional penny shares investing: a way to build diversified, low-dollar positions in sub-5-dollar names while keeping your risk per trade controlled. If you’re saving aggressively, learning the ropes, or rebuilding trust after a rough patch, fractional penny shares investing can meet you where you are. It lets you buy controlled slivers of volatile stocks, test ideas in the real market, and keep losses small while you learn. Picture this: it’s late, coffee mug warm in your hands, quotes flickering like fireflies on your phone. You don’t need to chase; you need a method. That’s what this guide gives you. Table of Contents: First principles: what counts, and

Fractional Penny Shares Investing: Practical Practice for Small-Budget Stock Hunters