When you want to buy penny stocks, you need to be aware of a couple of things. Buying stocks is not an easy thing to do. Here are a some steps that will help you through it.

First you need to realize that buying penny stocks are harder to do than other established stocks like Google, Yahoo, or even Wells-Fargo. Company's that have been around awhile and a proven leader, It easy to track their records, study the trend, research the company's financial report and balance sheet.

A company that is considered a penny stock is usually new and haven't released a lot of information. When you try to do what I like to call "doing my due diligence", it's difficult to find past earnings reports since they don't have to report every 3 months like most stocks do.

Next, leave your emotions at the door. It's hard to deal with the stock market with it's volatility and so forth, but when you deal with penny stocks it even more unpredictable. The trading of these stocks don't happen constantly throughout the day. The price may sit at the same level all morning and then in the afternoon it might drop 10-30% for no hard reason. Emotions will get the best of you if you're not careful. If the price of a stock drops too far, you may have a knee-jerk reaction to it and sell before you had time to figure out why it dropped.

If the price goes up rapidly, you might get giddy and happy that it moved up 50% in one day. Thinking that you have a winner here expecting it to go up the next day, you "let it ride" instead of selling. Only to turn on you computer and see that the stock is now lower than where you bought it at.

There's a lot to think about before getting into trading stocks.