The goal of stock trading is to make money.  Unfortunately, the way it is practiced by many you would think just the opposite.  If your goal is to make money then you need to give consideration to penny stock trading for the mere fact that penny stock gains can be staggering.

It is humorous that many in the investment community consider themselves successful of they return in the neighborhood of 10% on their account each year.  Why is this humorous?  Because a 10% gain is a good day for some penny stocks, not a year.  Penny stock gains can easily run in the neighborhood of 10%, 20% or even 50% in a day.  A five percent move is just an average run of the mill move.  Why is this the case?  It is because penny stocks have such a low cost per share.

Penny stocks usually refer to any stock trading under $5 per share.  Since they are priced so low every move in the stock is magnified.  A 20 cent move in a $20 stock is only a 1% move, however, the same move in a $2 stock is a 10% move.  Ten thousand dollars invested in the $20 stock would leave you with $10,100 where the same money invested in the penny stock would give you $11,000.  If you think that this is a large move, think again.  In the world of penny stock trading, penny stock gains of 10% are small.  Let’s take a look at a couple of examples.

Dendreon (DNDN) is a biotech stock.  On March 9, 2009 DNDN was trading at $2.64.   On April 27, 2009 it closed the day at $21.55.  That is more than a 900% return in 1 1/2 months.  This is the power of penny stock gains.  Today the stock trades over $33 per share.  This is what can happen when there is great news on a biotech penny stock.

Human Genome Sciences (HGSI) is also a biotech stock.  On March 11, 2009 it closed at .48 cents per share.  On July 28, 2009 it closed at $14.63.  Today it closed at more than $30.  That is more than a 6300% return in less than one year.  To give you better understanding $10,000 invested in HGSI nearly one year ago would have produced $625,000 today.  So when I say that penny stock gains can be staggering, this should give credence to it.  You may want to consider doing some penny stock trading of your own.