Investing in penny stocks can be one of the most profitable investments you can make. Keep in mind that it also can produce big losses as well, but you can manage those losses with a straight forward style of investing that many investors lack. It's hard for many investors to cut the fat or to take the emotion out of trading.

In penny stocks it's important to remember that you are trading not investing. Now I'm not saying that all penny stocks are not worth a long term investment, but most of them are stocks that you should look as money makers. If you can start your trading psychology with nothing more than that ingrained into your psyche you will be further along than most other traders.

First you need to find a good list of penny stocks to start your research. There are many different plays to work with. For the most part penny stocks will be momentum plays that you will trade on news or similar company events, such as mergers, buyouts etc.

Once you have a good list of penny stocks you need to do a little bit of research regardless. Although we do provide a list of great potential penny stocks that are buzzing in the market. From there you can look at the technical side of the stock, but more importantly, the underlying momentum driver. Remember getting in and out with a profit are key, and you should base all your trading decisions around this one premise.

We love trading small caps because they provide the best profit potential available. Never fall in love with them, and never get too greedy. Take your profits while you have them.