Have you ever liked to lock yourself in a room with your trading terminal to follow your short term investments in penny stocks? Have you felt that doing this is the best way to spend your time, than doing anything else for a living? Then it would be pertinent for me to point out that doing this is fraught with many dangers as it can backfire on you if you do not have adequate cover to hedge against your penny stocks. Are you still wondering what I am talking about? Well, I am talking about trading in penny stocks. You may well ask what penny stocks are. Well, to describe penny stocks, I would like to take a case. Imagine that you are planning to buy stocks. You buy a penny stock of a company that is trading at very cheap prices at that juncture, but is likely to appreciate in the near future. You have done this based just on your intuition. The question to be asked is, whether it is wise to trust your intuition and make your investments. There is a lot of science involved in selection of the best penny stocks for speculation. The procedure of finding the best penny stocks is very elaborate, but it would suffice to say that in order to pick the best penny stocks, you have to investigate, investigate and investigate some more. Your decisions related to picking a stock depends upon your investigation and its findings. It is said that the level of success that you can get in investing in penny stocks depends upon the work you put in to your research to select the stock. The whole point is to select such stocks that have a fundamentally good business model, which will do well not withstanding recession. The best penny stocks are those which do well even during a recession. Some people have the dirty habit of following the herd and doing what others have done. They invest in stocks that others have invested in and made money from. Little do they realize that their objective in investing in such stocks may not be the same as your objective? All wise people take decisions based on an objective and what will be the repercussions of the same. Likewise picking the best penny stocks requires a lot of thinking and knowing your objective in investing in a particular stock. Questions may arise as to how can one trade in penny stocks for short term. Imagine that you bought the shares of an XYZ company for say $50 and after a period of say one year, you sell it off when the stock price climbs to say $500. You have gained $450 in the bargain in a period of one year. In case if you had bought 100 shares then you would have made $4500 in just a period of one year.