I did trade penny stocks. Made about 3 grand then went down 6. That's when I called it quites. You really need to be careful with pump and dumps and also really watch the news. I invested a small amount (like 75 bucks) in a company that creates and sells radiological/biological detection kits and then the tsunami hit Japan. I made 1000 bucks in a week because of it.
Always look at the companies filings. They may say they've made 10 million dollars in the last year, but allot of times if you look at their filings, you'll see that they are in the hole like 400 mil. If there are no filings, stay away. STAY VERY FAR AWAY. There allot of "fake" companies that come from Asia that scam money and run with it. I only had one instance of this but I only lost 50 bucks, thank god.