Picking penny stocks may be both risky and profitable. You can pick a profitable penny stock in tightly held small float stocks, or low public floats. Take for instance a company that has done a reverse split and name change. More often than not, the company will be undergoing some type of promotional advertising for their stock to retail buyers.
Most of the time, these penny stocks will see huge price gains, meaning profits for the early investors in the market. Another way to pick profitable penny stock is to identify stocks undergoing a promotional campaign to retail buyers. Higher daily volumes and up ticks in price are a consequence of some form of retail advertising from the deal makers promoting their positions for retail.
In both these cases, you can reduce your risk and maximize your profit by knowing which penny stocks are going to be promoted before hand. You are likely to find many companies whose securities trade in the pink sheets and OTCBB at very low prices. You can pick penny stocks in a struggling young company and hold through the company's formative years. You are likely to be paid off quite well.
