The secret of making money in the penny stock trading market is by making prompt and up to date trading decisions. To do this, you obviously have to be well versed with what goes on in the market. Though there are newsletters and websites to provide you with trading news, you will not be able to scan through them everyday. A better alternative would be to get yourself a penny stock screener.

There are many online penny stock screeners to use for your trading purposes. Each has three components; a database of public trading companies, a screening engine and some variables that screen the computer.

Pre-defined screeners are better for novices

You have to answer some questions and inform the screener about what you are looking for like company size, volatility, margins, rate of return and P/E ratio. Based on the information you provide, the penny stock screener makes comparisons amongst the thousands of companies in its database, to give a list of matches for you to review.

If you are new to the penny stock trade, you may not know what criteria or percentage information you have to provide the screener. In such cases, its better to use pre-defined stock screeners. These screeners have a fixed set of parameters to help you with your search. Based on the strategy you use in your trading, there are various screeners for you to choose and use.

Some popular penny stock screeners

While selecting a penny stock screener to use, make sure you find out when its data gets updated. There is no point in using a screener that gives you out of date information. Here is a rundown of some of the more popular screeners used today:

• Yahoo! Finance Penny Stock Screener provides penny stock trading information based on share data, category, valuation ratios, analyst estimates and sales and profitability. While using this screener, its share price has to be set to $10 max to get penny stocks.

• MarketWatch Penny Stock Screener sorts results based on price, technical, fundamentals, volume and exchange and industry. Compared to other tools, this tool gives you better control over your results.

• Mutual fund investors prefer using MorningStar Penny Stock Screener along with their penny stock trading. This screener sorts results based on valuation, company performance, stock basics, stock performance and an optional MorningStar stock grades. As this screener lacks trading price function, its market capitulation has to be limited to $1 billion.

• AOL Penny Stock Screener helps you sort penny stocks based on results, performance, fundamentals, company basics and profile.

• MSN Penny Stock Screener provides results based on company basics and key financial indicators. However as this screener does not have many screening features, it is better to target small cap stocks in your searches.

Buy Penny Stocks

Remember that though a penny stock screener can give you lots of information about a company it will not give you information about any pending law suits, labor relations or management expertise of the company. You can acquire this knowledge only with more research, or perhaps from a broker.