Making something out of virtually nothing is one of the American dreams, and is why many people are looking toward penny stock brokers to help them achieve this. There are higher risks, of course, but with risk can come reward, and though penny stocks can be a scary word, there are professionals that can help you navigate through them.

The first thing you need to know is what a penny stock is. A penny stock is one that is listed below $5 a share or one that is not listed in NASDAQ, NYSE or AMEX which are the most common exchanges. They can be great investments, or complete duds, especially the ones outside the major exchanges because there is less oversight.

Of course, especially in this day and age, we want to know the risks we’re dealing with. The first is the classic pump and dump scam. This is where a company that might be failing, will publish articles and start a campaign telling you that this is the company is doing better than it is. This plays off of the urge to buy low, sell high, and the company can then dump its stock at a minimum of loss.

The other most common risk that you have to look out for is the boiler room scheme. This one originated by over the phone sales, but now has moved itself to trusted online communities. The most obvious clue that the stock might be one of those is the heavy sales pitch and that you must act now! Never let anyone pressure you into getting into something that you’re not comfortable with. They pressure you because they don’t want you to do the research and don’t want you to think about the bad stock they are trying to force onto you.

With all of the fear in penny stocks, what is the best way to get into them and avoid these scams? There are many professional penny stocks brokers that are there for you. They can help you weed out the bad ones and steer you towards some of the good ones. They can also make you aware of the risks that are there before you buy. If you find a good one, and invest carefully, you too could attain that American dream.