Trader Tips
Jun. 7, 202423 min read

Hot Penny Stocks to Buy in 2024

Tim BohenAvatar
Written by Tim Bohen
Reviewed by Friedrich Odermann Fact-checked by Ed Weinberg

Navigating the vibrant world of penny stocks presents an exciting, albeit intricate, pathway for beginner investors. Penny stocks, characterized by their low share price, offer a unique entry point into the stock market. They also offer a BIG challenge.

You can’t just invest in a penny stock and let it cook. That’s how you go broke.

Read this article because it offers some of my top penny stock picks for beginners, giving you a strategic entry point into building your own watchlists..

I’ll answer the following questions:

  • What is a penny stock?
  • Which penny stocks are most active?
  • What are the top penny stocks for beginners?
  • How can beginners navigate the risks of penny stock trading?
  • What strategies can be employed for making money with penny stocks?
  • How does social media influence penny stock trading?
  • What are the risks of investing in penny stocks?
  • How can traders minimize risks when investing in penny stocks?

Let’s get to the content!

Top Penny Stocks List for Beginners

My top 5 stock picks are:

  • NASDAQ: LUCY — Innovative Eyewear Inc. — One of Oracle’s Twelve (!) 100% Gainers in May
  • NASDAQ: ONMD — OneMedNet Corporation — The Medical Data AI Stock
  • NASDAQ: LIDR — Aeye Inc — The Autonomous Vehicle AI Stock
  • NASDAQ: FFIE — Faraday Future Intelligent Electric Inc — The 9,600%* Meme Stock Spiker
  • NASDAQ: MGOL — MGO Global Inc — The Earnings Meme Stock Winner

For beginners, diving into penny stocks requires careful selection to navigate the inherent risks successfully. A list of top penny stocks for beginners should consider factors like trading volume, company fundamentals, recent news, and market position. While specific stock recommendations fluctuate over time, focusing on sectors with growth potential or companies showing strong management can be a good starting point.

Platforms like Robinhood offer tools to monitor and trade these stocks effectively, making it easier for beginners to get started. Staying informed and vigilant can significantly enhance your chances of success in penny stock trading.

Check out my Robinhood watchlist here!

Before you send in your orders, take note: I have NO plans to trade these stocks unless they fit my preferred setups. This is only a watchlist.

The best traders watch more than they trade. That’s what I’m trying to model in this article. Pay attention to the work that goes in, not the picks that come out.

Sign up for my NO-COST weekly watchlist to get my latest picks!

Best Penny Stocks to Buy in 2024

Stock Ticker Company Performance (YTD)
NASDAQ: LUCY Innovative Eyewear Inc + 104.91%
NASDAQ: ONMD OneMedNet Corporation – 230.41%
NASDAQ: LIDR Aeye Inc – 60.75%
NASDAQ: FFIE Faraday Future Intelligent Electric Inc – 11.73%
NASDAQ: MGOL MGO Global Inc + 27.66%

#1: Innovative Eyewear Inc (NASDAQ: LUCY) — One of Oracle’s Twelve (!) 100% Gainers in May

My first stock pick is Innovative Eyewear Inc (NASDAQ: LUCY),

It’s also one of the Oracle tool’s favorite stocks right now. Oracle is a trading algorithm that tracks the most volatile stocks in the market.

It identifies key areas of support and resistance based on past price action. Then it offers potential trade plans on the day’s hottest stocks.

LUCY was one of its picks in May. And the price subsequently spiked 650%* in less than three trading days.

This stock started as a big spiker on Friday, May 24. It ran 520%* that day alone and closed near the highs.

The next week, we saw a decent dip-and-rip trade opportunity on day two of the move. But the real opportunity came on day three, Wednesday, May 29.

It rallied to make new highs directly after some hot Eddie Bauer partnership news. The spike that day measured 320%*.

Plus, the bullish momentum defied a stock offering of 5.2 million new shares from a day earlier. That’s a HUGE sign of strength for the stock.

Take a look at the trade alert we got for the Wednesday spike.

Traders had eyes on this runner before the market opened for regular hours. On the chart below, every candle represents one trading minute:

LUCY chart intraday, 1-minute candles Source: StocksToTrade

And the price is still consolidating near the highs.

This is the whole move thus far:

LUCY chart multi-day, 1-minute candles Source: StocksToTrade

Keep an eye on this multi-day runner. And lean on Oracle’s key levels to build smart positions!

#2: OneMedNet Corporation (NASDAQ: ONMD) — The Medical Data AI Stock

My second stock pick is OneMedNet Corporation (NASDAQ: ONMD),

On May 23 during premarket hours the company announced more than a five-fold growth of its iRWD network.

iRWD is a service that aims to connect and utilize real-world repositories (RWD) of existing healthcare clinics. The system also “de-identifies” the data, making it accessible for medical studies while preserving the privacy of patients.

And AI is at the heart of the network.

As a result of the news, ONMD spiked 550%* in May.

The chart shows a lot of good support under the current price action. And there’s a breakout level around $3.

Take a look below, every candle represents one trading minute:

ONMD chart multi-day, 1-minute candles Source: StocksToTrade

Now, shares COULD bounce off of support and push higher … 

Here’s how a trader should approach this setup: Set an alert on StocksToTrade around the $3 level. If prices can push toward that resistance with a high trading volume, we should start to plan a multi-day breakout trade.

#3: Aeye Inc (NASDAQ: LIDR) — The Autonomous Vehicle AI Stock

My third stock pick is Aeye Inc (NASDAQ: LIDR).

This is an AI runner that aims to be instrumental in the self-driving revolution. The “eye” is related to its LiDAR (light detection and ranging) technology: The cameras that help cars drive.

My students and I are banking off of this multi-day runner right now.

The stock already spiked 320%* in May!

The best part about these plays: The massive percent gain is accessible for small-account traders due to the cheap share prices.

LIDR’s multi-day volatility makes it a perfect trade setup — and it’s not over yet. Prices are still consolidating …

Keep an eye on Breaking News for any other big moves! 

#4: Faraday Future Intelligent Electric Inc (NASDAQ: FFIE) — The 9,600% Meme Stock Spiker

My fourth stock pick is Faraday Future Intelligent Electric Inc (NASDAQ: FFIE),

You don’t need to be a professional trader to make money off of these stocks. Even for brand new traders, there are opportunities to profit!

In fact, the 2024 market is brimming with small-account trade setups. Every week in our niche, we see a new stock spiking +100%.

And thanks to the recent meme-stock resurgence, the same profit opportunities are even bigger right now!

That’s why FFIE spiked 9,600%* — it’s a meme stock sympathy play.

It all started with the meme stock resurgence as a result of popular trader, Keith Gill’s return to the social media platform ‘X’, in May.

These are the details of that story.

Here’s how traders can capitalize:

We’re already pretty far along in the FFIE move. But the stock doesn’t have to make new highs for us to find profitable trade setups.

I’m watching for weak-open red to green moves, see my video below for a tutorial:


And thanks to the cheap share prices of these runners, a trader doesn’t even need that much money to get started.

FFIE never traded above $4 … You could start with $100 in your account. Heck, you could start with $10.

That’s the beauty of this niche: Massive percent gains are accessible for traders with small accounts.

#5: MGO Global Inc (NASDAQ: MGOL) — The Earnings Meme Stock Winner

My fifth stock pick is MGO Global Inc (NASDAQ: MGOL),

On May 21, MGOL spiked 570%* before noon … 

Then, during pre-market hours the next day, it extended that spike to an INSANE 1,200%*.

Most traders missed out … Unless they were watching the Breaking News system.

After the company announced it had filed a Form 10-Q for earnings, traders got a pre-market alert. On the chart below, every candle represents one trading minute:

MGOL chart intraday, 1-minute candles Source: StocksToTrade

Traders in our community had ample time to build a position on this intense runner as it pushed higher.

The spike measures 730%* in less than two days.

Keep an eye on the stock’s key support levels as long as the price consolidates. I’m specifically watching for red-to-green moves.


*Past performance doesn’t indicate future results.

Performance Analysis of Selected Stocks

Evaluating the performance of penny stocks involves examining their price history, trading volume, and recent company developments. This analysis helps in understanding the stock’s volatility and potential for gains. Tools and resources like financial news websites, stock analysis apps, and penny stock newsletters can offer valuable information for this purpose.

What Is a Penny Stock?

A penny stock typically trades at less than $5 per share. Primarily found on smaller exchanges and over-the-counter (OTC) markets, these stocks represent companies with lower market capitalizations. Intriguing for investors due to their low price and potential for substantial returns, penny stocks also carry a higher level of risk and volatility compared to established company stocks listed on major exchanges like Nasdaq or the New York Stock Exchange (NYSE).

Most Active Penny Stocks

Most active penny stocks are those with the highest trading volumes within a specific period. This activity can indicate investor interest and potential market movements, providing insights but also reflecting the speculative nature of these investments. Tracking volume along with price movements can help identify active penny stocks that might offer profitable opportunities.

How to Know Which Penny Stocks To Buy Now

Identifying the right penny stocks to buy now can feel like finding a needle in a haystack. The first step is to focus on small-cap companies with solid business models. These companies often fly under Wall Street’s radar, making for opportunities that bigger players might overlook. Keep an eye on their financials, looking for consistent revenue growth, manageable debt levels, and strong cash flow. This sets a foundation for identifying potential winners.

Another big thing I recommend is staying updated with news and industry trends. Follow financial columns and use a trading calendar to monitor upcoming events that could impact stock prices. You need to stay ahead of the game if you want to trade these stocks, tracking market sentiment and identifying catalysts such as earnings reports or product launches. Stock screeners can help narrow down your choices, making the research process more efficient.

If you’re looking for indicators, look first at the stock’s trading volume. High volume indicates higher liquidity, which is crucial for entering and exiting positions quickly. Brokers often provide insights into the most traded penny stocks, helping you spot trends. Remember, liquidity is your friend in the volatile world of penny stocks, ensuring you can capitalize on opportunities without getting stuck.

There are a ton of ways to identify good trade candidates — so many that I wrote a whole article on them! Check out my guide on How to Find and Trade Penny Stocks here.

How to Choose Penny Stocks That Will Explode

Choosing penny stocks that will explode involves more than just luck. Start by analyzing the company’s fundamentals and potential for growth. Look for companies with innovative ideas or hot products. Do your due diligence on their business plan, management, and path to profitability. This approach reduces the risk and increases the chances of finding a stock that might make a run.

Pay attention to market trends and sectors gaining momentum. Crypto and clean energy stocks were two of the hottest sectors in recent years. Monitoring sectors like these can provide insights into which penny stocks might be next to explode. Use tools and resources available through your broker to stay informed about these trends. Keep a watchlist and review it regularly, adjusting based on new information and market conditions.

Biotech stocks are some of the most explosive penny stocks due to their innovative nature and the critical role they play in healthcare advancements. Companies in this sector can experience significant price movements based on clinical trial results, FDA approvals, and other milestones — much of it based on news and the resulting intraday moves.

You need to build a watchlist if you want an advantage in trading these stocks. Check out my top biotech stock picks here.

Technical analysis should play a big role in choosing penny stocks. Look for patterns and indicators that signal a potential breakout. High relative volume, strong support levels, and bullish chart patterns can all indicate a stock ready to take off.

You should combine technical analysis with fundamental research to ensure you are making well-informed decisions. This combined approach leverages both market data and business insights, giving you a better chance of picking a winner.

Reasons for Investing in Penny Stocks

The allure of penny stocks comes from their low entry cost and the potential for significant returns. For traders willing to take on higher risks, penny stocks can provide a platform for learning about the stock market dynamics while potentially growing a small initial investment.

Strategies for Making Money in Penny Stocks

Successful trading in penny stocks involves a mix of thorough research, setting clear investment goals, and employing risk management strategies. Understanding the sectors you invest in, using stop-loss orders to manage risks, and keeping informed through reliable news sources are essential tactics.

Social media platforms have become influential in the world of penny stocks, creating unique opportunities and risks for traders. The collective power of online communities can drive significant price movements, making it essential for traders to stay informed about trending discussions. However, navigating this landscape requires a discerning approach to differentiate between hype and genuine investment opportunities. For insights into how Reddit impacts penny stock trading and tips on leveraging social media for informed trading decisions, explore the influence of Reddit on penny stocks.

Risks of Investing in Penny Stocks

The volatility of penny stocks introduces a heightened risk of loss. Issues like limited liquidity, less regulatory oversight, and susceptibility to market manipulation can pose significant challenges. Beginners must approach penny stock investments with caution, prepared for the possibility of losing their entire investment.

How to Avoid Penny Stock Risk

Navigating penny stock investments with minimized risk involves diligent research and strategic planning. Looking beyond mere stock price and delving into company performance, market trends, and financial health are critical steps.

Finding and Evaluating Penny Stocks

Effective evaluation of penny stocks requires accessing reliable data and analysis tools. Investors should look for companies with solid fundamentals, including growing revenues, manageable debt levels, and potential for market expansion. Utilizing resources like penny stock-specific newsletters and platforms can also provide curated insights.

Finding high-potential penny stocks is a challenge that requires the right tools. Penny stock screeners are invaluable for filtering through thousands of stocks to find those that meet your specific criteria, such as volume, price changes, and market sectors. These tools can significantly enhance your ability to identify investment opportunities quickly and efficiently. To discover the top penny stock screeners that can help you pinpoint the best trading opportunities, check out the best screeners for penny stocks.

When it comes to trading platforms, StocksToTrade is first on my list. It’s a powerful trading platform that integrates with most major brokers. I helped to design it, which means it has all the trading indicators, news sources, and stock screening capabilities that traders like me look for in a platform.

I use StocksToTrade to scan for news, tweets, earning reports, and more — all covered in its powerful news scanner. It has the trading indicators, dynamic charts, and stock screening capabilities that traders like me look for in a platform. It also has a selection of add-on alerts services, so you can stay ahead of the curve.

Grab your 14-day StocksToTrade trial today — it’s only $7!

Frequently Asked Questions

Can You Get Rich Buying Penny Stocks?

While penny stocks offer the potential for significant returns, they also come with a high risk of loss. Success in penny stock investing requires careful selection, patience, and a keen understanding of market dynamics.

Which Penny Stock Is Best?

The “best” penny stock varies over time, influenced by market conditions, company performance, and sector trends. Investors should focus on stocks with solid fundamentals, active trading volumes, and potential for growth.

What Are the Hottest Penny Stocks?

Identifying hot penny stocks involves looking for companies in emerging sectors with strong growth potential, positive financial indicators, and recent news that could positively impact stock prices. Regularly monitoring market trends and analyses can help pinpoint these opportunities.

What Are the Basics of Penny Stocks, and How Do Beginners Start?

Penny stocks are shares of small companies trading at low prices, often below $5. Beginners interested in these investments should start by understanding the nature of penny stocks and the securities market. Gaining knowledge about PE ratios helps assess the company’s valuation relative to its earnings. For those looking to invest, creating an account with a brokerage that offers a robust mobile app and browser platform is crucial for accessing penny stock markets.

How Can Investors Identify Promising Penny Stocks?

Identifying promising penny stocks involves researching gainers and IPOs, as these can indicate companies with potential for growth. Utilizing funds wisely and building a diversified portfolio can mitigate risks associated with penny stock investments. It’s important to track the performance of these stocks, using articles and reports from reputable sources, to maintain an up-to-date investment strategy.

What Is a Penny Stocks List?

A penny stocks list typically includes stocks trading under $5, offering high volatility and potential for quick gains, though it also involves significant risk, often resulting in losers alongside winners. Unlike ETFs, which provide diversified exposure to various sectors, penny stocks require careful research and active trading strategies to succeed. For those new to finance, understanding the risks and rewards of penny stocks is crucial before diving into this volatile market.

What Should Beginners Know About Buying and Selling Penny Stocks?

Beginners should understand the dynamics between buyers and sellers in the penny stock market. The process involves analyzing when to buy or sell based on profits, losses, and the upside potential of a stock. Tools like a mobile app or browser-based trading platform can facilitate these transactions, allowing investors to act quickly on market movements.

How Important Are Resources and Tools for Penny Stock Investors?

Resources such as articles, YouTube tutorials, and LinkedIn groups can provide valuable insights into penny stock investing. Additionally, utilizing services like portfolio tracking apps and accessing financial reports through a site map or menu on a brokerage website can enhance investment decision-making. It’s also essential to heed the disclaimer provided by authors or platforms offering investment advice to understand the risks involved.

What Role Does Market Research Play in Penny Stock Investing?

Market research is crucial for understanding the track record of penny stocks and their issuing companies. This can include reading IPO analyses, examining gainers lists for recent performers, and considering commodities as alternative or complementary investments. Accessing this information through various channels, including mobile apps, dedicated financial news sites, and social media platforms like YouTube and LinkedIn, can provide a comprehensive view of potential investments.

How Can Beginners Navigate Financial Information for Penny Stocks?

Beginners should familiarize themselves with financial terminologies like PE ratio, securities, and commodities. Resources like YouTube for educational content, LinkedIn for professional advice, and financial sites for articles and reports offer a wealth of information. Understanding these basics helps in evaluating penny stocks and making informed decisions based on their financial health and market potential.

Understanding Penny Stocks in India: What Beginners Should Know?

For beginners interested in penny stocks within India, it’s essential to start with familiarizing oneself with the NSE (National Stock Exchange), where many penny stocks are listed. Look for names and symbols of companies that have shown potential as gainers. Researching these companies’ performance through their financial reports and tracking their stock prices on the NSE page can provide insights into their viability. Additionally, consider the volume (number) of shares traded, as this can indicate liquidity and interest in the stock. Using services like brokerage accounts that offer detailed analysis and results can significantly aid in making informed decisions.

How Do You Evaluate Penny Stocks for Investment?

Evaluating penny stocks requires paying attention to the amount of investment you’re willing to allocate and understanding the benefits and risks associated with these types of securities. Analyzing past profits and the potential upside of penny stocks can guide your sell or hold decisions. Utilizing tools like mobile apps or websites where you can find links to in-depth articles, YouTube channels for financial education, and platforms offering up-to-date market results can be invaluable. Always ensure you’re consulting a variety of sources to get a well-rounded view of the penny stock market.

What Resources Can Help Beginners Navigate Penny Stock Investing?

Beginners can navigate penny stock investing by leveraging a mix of products and services designed to simplify the trading process. Look for platforms that offer a comprehensive site map or menu, allowing easy access to various pages dedicated to penny stocks, including tutorials, symbols, and market trends. Engaging with financial communities on LinkedIn and following channels on YouTube that specialize in penny stock investing can offer practical tips and things to watch out for. Lastly, always cross-reference the information you find with links to authoritative reports and analyses to validate your investment decisions.