Looking for explosive penny stocks? Tired of picking losers and want a system that doesn’t cost you thousands of dollars? If you have 10 minutes to research stocks every day, you are ready to start making some real money. Let’s get started.

When you start researching penny stocks, look at 10-20 stocks at a time. The key here is the speed up the process of eliminating the duds from the moneymakers.  Go through the following steps one by one.

Step  1: Avoid the Weak Industries

This is a no-brainer as the weak industries will often have the weakest companies.  Many financial services sites will compile the top ten worst industries and companies on a regular basis.  It is best to pay attention to these lists as millions of dollars  have been spent by various financial powerhouses and in less than a minute you know which industries to run away from. Start at Yahoo! Finance, MSN Money or Investors Business Daily.

Step 2: Discard Stocks Selling Under a $1

Cheap penny stocks are attractive because of their prices per share, obviously. But there is a reason why these stocks are cheap. Usually the company is not making enough money to attract new capital or its out of favor because of some other market news. We suggest finding growing companies that have passed the $1 threshold. Even if the stocks of this company are a steal at less than a dollar, hold off. You will still make piles of money if you get these stocks above $1. The important thing to remember is that you will avoid more losers by following this strategy.

Step 3: Sales Matters

Sales, sales, sales .. its all about this number. If the company isn’t making enough sales, don’t touch it with a 10-foot pole . People fall in love with the company’s story. But its your job to cut through the hype and get to the bottom line. Look for companies with more than $20 million in sales in the last 12 months. You could reduce or increase this if you are willing to take more or less risk respectively.

Step 4: Catch the Stocks on the Rise

Be in on the latest news – or investment gossip, if you like – especially where the big-time investors are concerned since they are in on the action even before the slightest hint is made known to the general public.  This is made possible by looking at the 200-day moving average of the stocks.  The general rule is that if a company’s stock is trading below the 200-day moving average, then slash this company from your list of potential investments.

Step 5: Chart the Course

The next step is to eliminate the penny stocks with relative strength of less than 50 over the 12-month period.  Basically, it means that the stocks have outperformed 50% of all the other stocks in its category and, thus, shows signs of great profit promise.

Last Tip – Go with the Pros

Look at the ownership base of the company.  If well-known institutions and big-time investors are into it, then it can be a good investment as these people will not jeopardize their money in overly risky propositions.

Now, you are ready to make some real money with penny stocks. Take action today.