Trending penny stocks are on the move by definition. Their fast price movements — a.k.a. volatility — are the reason I trade these sketchy stocks. If you understand the patterns they tend to follow, you can capitalize on their price swings.

Now that we’re a few months into 2023, it seems that the market might be stabilizing. When traders aren’t scared, they’re greedy… which is good news for penny stocks. Like NFTs, they thrive on speculation.

Which hot penny stocks should you keep an eye on in 2023? Read on to find out!

What Are Penny Stocks?

Penny stocks are stocks traded at $5 or less, often connected to companies with small market caps. You can find these cheap stocks on major exchanges like the New York Stock Exchange (NYSE) and Nasdaq, as well as the over-the-counter (OTC) markets.

Penny stocks are considered risky by most traders, and your penny stock access will differ between brokers like Chase and Interactive Brokers. Some brokers won’t allow you much or any access to OTC penny stocks, which are considered the most risky of all.

Don’t misunderstand — most penny stocks are sketchy and unstable. Hedge funds and major investors tend to steer clear of them for exactly this reason. Because major players don’t trade penny stocks, there’s less of a chance of Wall Street thumbing the scales.

While you may not get big gains from penny stock trades, you can grow a small account quickly — and small gains add up.

Remember that small gains add up over time so be okay taking singles and NOT going for home runs as I only have a few millionaire students who truly get it while there are far more gunslingers over the years I've seen be too aggressive & inevitably blow up every time, YOU CHOOSE!

— Timothy Sykes (@timothysykes) November 23, 2020

Because they’re volatile and unpredictable, penny stocks call for disciplined trading and study. If you’re new to penny stocks, pay careful attention to the next sections…

Risks of Trading Penny Stocks

Trading penny stocks is risky business. To manage these risks, you need to know about them first. Here are some of the most common risks when trading penny stocks:

Penny Stocks Are Unpredictable

Penny stock price moves are hard to predict. Combine this with their often low liquidity, and you can chock up big losses easily.

I teach my students to hedge against these issues through good analysis and strong discipline. One of my favorite penny stock strategies is panic dip buying — I plan for small gains and cut losses quickly if the trade goes against me. It doesn’t always work, but going for panic dip buys can be a great way to grow small accounts.

Many Penny Stocks Collapse

99% of all penny stocks will eventually collapse thanks to bad business decisions, slow growth, and the fact that they are outright scams. Losing money is part of trading — it’s mitigating these losses that is key to a good strategy.

Penny Stocks Are Fraught With Fraud

Financial and securities regulators have issued warning after warning about penny stock scams for good reason. The penny stock market is a breeding ground for market manipulators, unscrupulous companies, and scammers.

Keep in mind that most penny stock news and social media posts are attempts to pump the stock. You can trade these pumps for a profit — just never believe their promises.

How to Know When a Penny Stock Has Momentum

If you want to know when a penny stock has momentum, put it into a watchlist and observe its movements. A watchlist contains all your preferred penny stocks, allowing you to keep tabs on them simultaneously instead of flipping through multiple pages.

Subscribe to my NO-COST weekly stock watchlist here.

Here are the characteristics of the penny stocks I like to trade:

Exhibits Unusual Daily Trading Volume

Stocks with high daily trading volume tend to be more volatile, creating more trading opportunities.

High-volume stocks are also easier to sell. That comes in handy when you reach your trading plan goals or risk.

Is a Low-Float Stock

Low-float stocks, for our purposes, are those with under 10 million shares publicly traded. Because there’s a limited number of stocks, even a small amount of buying pressure can result in big price swings and short squeezes.

Has a Tradeable Chart Pattern

Watchlist-worthy stocks usually have a history of tradeable chart patterns.

To study these patterns, you can chart along with the pros on my YouTube picks.

It also helps to have a top-level stock screener app like StocksToTrade.

I helped design StocksToTrade to match my trading needs, and its stock screener is no exception. It lets you search by:

• Percent gain over the previous trading day
• 52-week highs
• Volume
• Sector
• Float

There’s much more to every aspect of this pro-level trading platform. Sign up for a 14-day trial of StocksToTrade to see how it changes the way you trade — only $7!

Is a Former Runner

Former runners can run again.

The best way to see how a stock reacts to catalysts and holds up a trend is to study its past.

Frequently Appears on the News

Penny stock traders often buy or sell based on news catalysts. Penny stocks with more frequent news often have more frequent trading possibilities.

Trending Penny Stocks to Know About

My trending penny stock picks for 2023 are:

• (OTCPK: DPLS) — Darkpulse Inc. — The Dead Cat Bounce Penny Stock
• (OTCPK: WSRC) — Western Sierra Resource Corporation — The Multi-Month Runner Penny Stock
• (OTCPK: UATG) — Umbra Applied Technologies Group Inc. — The Uptrending Penny Stock
• (OTCPK: CGRA) — CGrowth Capital Inc. — The Post-Pump Penny Stock
• (OTCPK: BMXI) — Brookmount Gold Corp. — The Volatile Penny Stock Runner
• (OTCPK: CLOW) — Cloudweb Inc. — The Post-Breakout Penny Stock
• (OTCPK: VENG) — Vision Energy Corp. — The Caveat Emptor Penny Stock
• (NYSE: AMAM) — Ambrx Biopharma Inc. — The Biotech Penny Stock Spiker

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 here. Pay attention to the work that goes in, not the picks that come out.

1. Darkpulse Inc. (OTCPK: DPLS) — The Dead Cat Bounce Penny Stock

My first trending penny stock pick is Darkpulse Inc. (OTCPK: DPLS).

First let’s talk about the obvious: Darkpulse has no pulse. It’s well into step 7 of my 7-step pennystocking framework — “the long kiss goodnight.”

Remember this chart well, its the basis for my 7-step framework, @30DayBoot & @completepenny & you must study not to fall prey to greed/ignorance or you'll get wrecked like 90% of traders. It's VITAL to sell into excessive strength/hype, do not just hold & hope like most newbies pic.twitter.com/QsAGHsI6lp

— Timothy Sykes (@timothysykes) February 28, 2021

That doesn’t change the fact that it can have an occasional big day.

A “dead cat bounce” is an actual stock market term. I love animals — I even started a charity to support them…

Check out the work I do with Karmagawa here.

But 80 million shares traded matters, even to a stock with a 6 billion share float like DPLS.

That volume came on merger news, which is also responsible for other recent spikes. On February 15, it was good for a near 50% gain.

I wouldn’t overnight this stock. Take a look at this $1,010 DPLS trade from last year (starting stake $16,452) for an example of how to trade scary stocks like DPLS.

2. Western Sierra Resource Corporation (OTCPK: WSRC) — The Multi-Month Runner Penny Stock

My second trending penny stock pick is Western Sierra Resource Corporation (OTCPK: WSRC).

After it went supernova in 2021, WSRC trended down into 2022…

Since September, it’s been trending back up. It gained 400% within that span.

Lately, it’s given back some of those gains. But check out the way I’ve made over $12k trading this stock in the past two years (click the link to see my individual trades) …

It was mostly dip buying panics. So the recent panics that WSRC is experiencing are right in my wheelhouse.

3. Umbra Applied Technologies Group Inc. (OTCPK: UATG) — The Uptrending Penny Stock

My third trending penny stock pick is Umbra Applied Technologies Group Inc. (OTCPK: UATG).

It’s definitely too soon to call it, but UATG has held onto most of its big December gains, reversing an 18-month downtrend. It gained more than 700% in December, and has experienced the occasional spike in 2023.

It’s also posted big trading volumes. While they don’t compare to its December numbers, they’re enough to keep this stock hanging around…

UATG is a holding company that pumps out news on everything from orthopedics to water treatment. And these pumps have a track record of spiking the stock.

4. CGrowth Capital Inc. (OTCPK: CGRA) — The Post-Pump Penny Stock

My fourth trending penny stock pick is CGrowth Capital Inc. (OTCPK: CGRA).

CGRA made most of its 700% gains in late November/early December by teasing some upcoming moves.

When it finally made one — acquiring a small clothing company — the stock ran over 100%. Then it immediately gave most of its gains back.

I’ve made $2,264 in total earnings trading this sketchy stock’s pumps (click the link to see my individual trades). I hope it doesn’t distract itself with actual business dealings too long.

5. Brookmount Gold Corp. (OTCPK: BMXI) — The Volatile Penny Stock Runner

My fifth trending penny stock pick is Brookmount Gold Corp. (OTCPK: BMXI).

If you want to see a volatile penny stock in action, take a look at BMXI’s chart.

It ran 1,500% in August… then it gave most of that back by early December.

Its New Year’s run was even more abrupt. It spiked 400% one day, then gave most of it back the next two days.

I’ve gotten stung by this stock to the tune of $397 in total losses (click the link to see my individual trades). My small gains were more than offset by a 24% loss during one of those crazy 2022 runs.

In 2023, it’s shown less volatility. I’m watching for more of its trademark volatility — with a much SAFER trading plan!

6.  Cloudweb Inc. (OTCPK: CLOW) — The Post-Breakout Penny Stock

My sixth trending penny stock pick is Cloudweb Inc. (OTCPK: CLOW).

This is a heavily-manipulated stock.

Check out CLOW’s 6-month chart. Crazy right? It’s like something a kid would draw on an etch-a-sketch…

And then shake out when they got bored.

That’s pretty much what happened with CLOW. It gained over 1,000% in two late-2022 months of stair stepping gains…

Then it gave most of them back in one day.

I broke down the end of its run in this video:

I also described how I made over $4k in total profits from this stock (click the link to see my individual trades).

I traded SAFELY — unlike the many newbie traders who got crushed by this stock.

That’s how I’ll trade it the next time promoters get their claws on CLOW.

7. Vision Energy Corp. (OTCPK: VENG) — The Caveat Emptor in Recovery Penny Stock

My seventh trending penny stock pick is Vision Energy Corp. (OTCPK: VENG).

Talking about manipulated stocks — VENG pulled the rug FIVE TIMES on traders during its multi-month run…

The manipulation was so egregious that VENG got slapped with a caveat emptor designation, the dreaded skull-and-crossbones…

That’s like penny stock jail. Most brokers won’t let you trade stocks with the label.

Consider this a PSA: never believe in any penny stock.

Do me & yourself a favor & NEVER believe any penny stock's story or the promoters who advertise them. Expect the absolute worst from every stock, from every "trader" on $TWTR giving tips, never follow ANY alerts from anyone else & instead learn to refine your own trading process!

— Timothy Sykes (@timothysykes) October 15, 2020

I don’t care if it takes weeks, months, or years. The end game is always the same.

I traded panics in VENG for $1,737 in total earnings (click the link to see my individual trades).

When more newbies inevitably get excited about this stock, I hope you remember to trade with a conservative plan.

8. Ambrx Biopharma Inc. (NYSE: AMAM) — The Biotech Penny Stock Spiker

My eighth trending penny stock pick is Ambrx Biopharma Inc. (NYSE: AMAM).

At the time of writing, AMAM is on a five-day breakout on new treatment news. That’s been good for a more than 300% gain.

This kind of momentum helps support my favorite setup in this market — the panic dip buy.

There’s a better chance of a bounce when the stock is trending up.

Final Thoughts

There’s no immediate way to know which penny stocks will have momentum in 2023, and you won’t go far by copying somebody else’s penny stock picks. The best way to identify which stocks will have momentum is to be a self-sufficient trader and analyze stocks yourself before trading.

If you want to learn more about trading penny stocks, join my Trading Challenge! I share the things I’ve learned during my 20-plus years as a penny stock trader to help you become self-sufficient, safe, and smart traders.

It’s okay to make mistakes in your trading journey. Part of learning to be a smart trader is understanding which strategies work for you, becoming more disciplined, and learning to curate your list of penny stocks. Treat this like a marathon instead of a sprint — perseverance is the key to becoming a great trader.

Which stocks are you watching in 2023? Let me know in the comments!

Penny Stocks on the Move FAQs

What are the fastest-growing penny stocks?

The fastest growing penny stocks are usually also the fastest in collapsing. That’s why studying chart patterns and going for small gains is the safest way to trade!

What are the top-moving penny stocks?

The top moving penny stocks have the most volatility. This is what matters in penny stock trading — identifying stocks that make big price moves. This way you can safely take “the meat of the move” without getting too risky.

Can you get rich trading penny stocks?

You can get rich trading penny stocks — but if this is your only goal you’ll probably blow up your account. The penny stock traders I’ve seen find success pay attention to the work, not the results.