Penny shares are essentially the same thing as penny stocks and the two terms can be used synonymously. Penny shares are stocks with share prices below five dollars that aren't traded on the more conventional stock exchanges such as the NASDAQ and the New York Stock Exchange. Penny shares are instead traded over the counter on such quotation services as the OTC Bulletin Board and Pink Sheets. Penny shares are typically what is considered as a high-risk type of investment, and often times a penny share will either completely explode in value or lose all of its worth pretty-much overnight. For this reason to buy penny shares and make a profit you must be skilled at this type of trading and you must be able to withstand extreme market fluctuations and unpredictability.

If you are new to trading with penny shares then you should make sure to gather as much advice and information as possible before making your trades. Trading penny shares is different than trading more conventional stocks and with penny shares you must be able to move much quicker than if you were trading on the NYSE or NASDAQ. This means that you must utilize all of your skills and knowledge to make a profit with penny shares, and to do this you should never stop learning new techniques and strategies. The following will hopefully provide you a starter set of pointers and tips that can get you started on your way to profitability with your penny share investing.

When you first start trading penny shares you are probably going to be swimming in over you head in terms of new information and strategies. This is why it is essential for you to take your time and only make the moves that you are comfortable making. Many new traders want to jump right and in and start playing with the big boys and other high volume traders, and while this may sound like fun it is also a good way to lose your bankroll fast. Take your time and gain some experience before doing anything huge and you'll benefit by making more money over time.

The number of resources that provide information about penny shares is outstanding and there seems like almost every week a whole array of new penny stock newsletters come into existence. You must be careful on where you get your information though, and it is not always wise to place your trust in such new resources. To find the red hot penny shares in your market you must be patient and look for quality rather than quantity. The vast majority of these newsletters are garbage and while there are some that can give you good information you must use caution when taking action on any sort of recommendation. Hot penny shares do exist, and as long as you can perform the appropriate research and take your time you will have no trouble coming across all of the resources that will make you a lot of money.

Most penny share traders overlook the fact that you can perform thorough research on the company that is providing the penny share, and it is too bad because this is by far one of the best ways to get a leg up on your competition. There are actual companies behind those shares that you are trading and the more you can find out about the company the better chance you will have at making a profit with that particular penny share.

Last but not least you should learn to capitalize on what is working for you. It might take you awhile to find a technique or strategy that works for you but once you do find one you should then not hesitate to exploit it for all its worth. The traders that make the most money with penny shares are typically the ones that throw a bunch of mud at the wall to see what sticks. You may lose a bit of money at first using this method but in the end if you can come out with one thing that works tremendously well then you can easily make your money back and then some. Trading penny shares is not easy but if you stick with it you should have no problem eventually making money so maintain a good attitude and you'll be fine.

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