For people that are interested in the wild, wild west of investing, penny stock investing is the place to be. A great deal of people in the financial world frown on penny stock trading but the fact is, a lot of money can be made trading penny stocks. To begin investing in penny stocks, the first order of business is compile a list penny stocks that meet your criteria. Stocks trading on the OTCBB and Pink Sheet exchanges are highly volatile, so extreme due diligence is a requirement when building a penny stock list. Ok so you have a list of penny stocks you are considering for your list. First the potential candidates must be screened. Screening is a method of formulating a list of stocks that you watch every day; it is a method of narrowing the fi bass guitar scales eld. Consider looking at stocks closing at their 52-week high for investing ideas for a continuation of an uptrend if the stock holds the breakout for a couple of trading sessions. Also consider a list of those stocks that sink to a 52-week low and are in a potential position for a bounce play. Penny stocks trading at their 52 week high or 52 week low have the potential to be huge gainers in a penny stock portfolio. Another way to build a list of penny stocks is a stock scan. A stock scans applies a technical formula to a large population of stocks and returns a list of stocks that meet some filter criteria associated with that formula. For example, a scan may show a list of stocks that are moving higher after experiencing a significant downtrend.