I have to agree with the poster above. Penny stocks are the best way to loose money fast. It's so easy to manipulate them, there are so many gamblers and weak hands in them, and technical set ups are completely unreliable.
They can move large percentage points against your position so quickly that you feel you can't stop out because you lost too much money. You rationalize that the price will come back so you can exit at or close to even and before you know it, you are selling for a 50% loss on a panic event.
Another thing to avoid is pre market trading. Traders read message boards for advice, pump and dumpers use the message boards to incite fear or greed then they fade your position that you stupidly took at their advice.
Example: AOG announced earnings before the open and the futures market is jumpy. Nervous owners looking for advice run to the message boards where there is a guy claiming the stock is going to open down 20%. You panic, sell during thin pre market trading and the fear monger buys your shares that dip wildly lower as you put in a panic exit. Then, that same p&d artist turns around and sells those same shares for 5-10% higher a few minutes later as he takes advantage of the pre market swings.
One thing to keep in mind is that a 10-20% move is the same whether you own 100 shares of a $100 stock or $10,000 shares of a $1 stock.
If you are looking for bigger gains than 10-20% you are just gambling and the house is going to take your shirt and your trading account in the end and the end will come very quickly. This is just reality.
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