In order to figure out what penny stocks to watch in order to make money, the key is finding certain variables within the market that offer telltale signs of a hot penny stock about to make a move. This takes some time and practice and no one should expect to make money overnight! I recommend practicing a trading system with penny stock picks for a few weeks in paper trades before even moving into live trades. That said, here are some of the most common features you need to look for when finding what penny stocks to watch to make money.

Most importantly of all, look for a micro cap stock that has a recently gained competitive edge on the market. These penny stocks will often receive important advantages such as deals with larger companies, new market opportunities to expand their business and new equity from interested investors in the company. Small stocks like this change very rapidly and will gain people’s attention suddenly to create an advantage over other competitors.

Also, whenever a new micro cap stock gets listed as one of my penny stocks to watch, I consistently see if it has a technical analysis pattern that has volume spikes. Technical analysis offers a lot of important features to trading that should not be ignored. Pay attention to volume spikes in overall price and pull the trigger when the volume is getting ready to spike again for a solid fill on orders.

Finally, another thing I look for when choosing what penny stocks to watch is the earnings reports and profits of the stock being traded. This means a stock should have significantly less debt and more equity as well as increasing profits as a result of business. Looking for this is very important as a stock preparing for growth will have a positive earnings report. If you see a positive earnings report and little to no technical pattern that represents this accurately, then hang on to the stock as it is likely about to move up!

For the most part, discovering what penny stocks to watch is a delicate science that can take a long time to work. Luckily enough, there are people who offer trading advice and recommendations with more experience. Many of these people have newsletters or trading systems for picking out penny stocks, a fantastic way to turn profits in micro caps. I recommend picking up one of these!

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