How to Choose the WinnersUnderstanding Penny Stocks by Peter Leeds

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Picking Your Own Explosive Penny Stocks

A little work can go a long way.

In the case of penny stocks, the amount of effort and research you put into finding the perfect investments is directly proportional to success.

penny stock picks

Almost all traders who get involved with penny stocks and penny stock picks are doing so for the wrong reasons. For example, they hear a hot tip from a friend at work, or see a small news article about a company in the paper. Unfortunately, by the time you hear about the shares, they are already common knowledge.

This is not to say that you will need to research for eight hours a day just to make money. It is quite the opposite actually. A few moments of effort, along with the knowledge and concepts revealed in Leeds Analysis, will help you quickly identify which are the best penny stocks from the pool of thousands.

For those of you who are willing to research extensively, the theories will be incredibly valuable.

If you are not inclined to do very much work, or do not have the time to commit, these concepts become even more important. They will show you how to

  • Easily rank stocks
  • Avoid the common mistakes

Perhaps you do not want to do any research yourself at all, but instead prefer to use a professional penny stock picking service. This is also an excellent way to proceed, as long as you decide on a service that is reliable and accurate.

I recommend that you do use the services of a professional penny stock analysis company, but besides, I would not consider any of the other options out there to be 'professional.' Generally they are individuals who have figured out how to program a web page, and their expertise does not go far beyond that.

A Little Work

As I have mentioned, a little work can go a long way. However, most traders do not put in the required effort, or any effort for that matter. Those of you who are willing to do the extra due diligence or analysis will benefit greatly from what you are about to read.

Understand that 95% of penny stock companies should be considered bad or dangerous investments. However, the proven approach outlined in the next several sections makes it easy to tell which penny stocks should be ruled out.

A Long Way

As you become more experienced, you will learn that a good penny stock trader can make money on good and bad penny stocks alike, simply by investing at the right time. Since every stock fluctuates, you shall see that money can be made by buying even the worst companies at the right time, and money can be lost by buying the best companies at the wrong time.

Ideally you want to accumulate the best penny stocks at the most advantageous prices. We suggest using fundamental analysis (detailed in an upcoming section) to discover which are the best penny stock companies, while using technical analysis (also detailed further along) to pick the most opportune buying prices.