Ok...I want to lead off with a disclaimer: I know very little about trading stocks. I understand the main principles, but my biggest source of frustration is trying to separate the facts from fiction. I don't have thousands to invest, so I'm looking at trading penny stocks. I don't have the ability to day trade, so it's really just a matter of picking some stocks, buying them, and selling them off for a profit. But where do you start? It seems you have 2 choices: 1) follow news and earnings reports or 2) follow the advice of fellow investors. Obviously, both are extremely risky. Earnings reports and news can be bogus; and relying on strangers for advice on how to spend your money....well, you get the point.
Generally, folks I've talked to say "stay away from penny stocks". They laugh and say that there are too many scams out there and people get suckered out of their money. I can see how this happens. By the time you discover that a stock is moving, it's too late. You're either on the inside or you're on the outside, watching from the stands.
Here are my questions:
1. What are some good sources to locate worthy penny stocks. I don't want to throw a dart at a board.
2. What are some good ways to research the stocks once you've picked them?
3. What "red flags" and pitfalls should I watch out for?
I'm not looking to get rich quick; just looking for a little extra income. Thanks.