Keywords are nothing more than the words or phrases that people use to find your website on the net.
Niche Keyword research is the first step in deciding which target niche  to focus on. Keyword research consists of finding targeted keyword  phrases related to your niche, analyzing the competition and  commercialization of your selected keywords.
As a reminder before you get started, remember to select a niche that you are interested in or passionate about.  This will make building the niche that much more enjoyable and increase  your chances of success. Also you should always only focus on a single  niche at a time or at least fully develop the niche site before starting  on your next project.
Start your keyword research off by first brainstorming on topics that  you are interested in or ones that you think could be profitable. After  you have your list of 5 to 10 topics, go through and rank them based on  your favorites. Now start at the top and do your keyword research until  you find a niche that you feel you can rank for and earn some income  from. Remember to save your list for when you are ready to start your  next niche.
Keyword Tools
When it comes time to do keyword research there are lot of tools  available on the web today. The most popular being Google's Keyword  Tool. There are also free trials from the popular paid sites like  Trellian's Keyword Discovery and Wordtracker Keywords.
One of the best desktop applications that I have found is Market  Samurai. If you haven't seen or heard of Market Samurai before you  should download their free trial and give it a spin. You can also check  out my video to see how I use it to do my keyword research.
If you don't use a tool like Market Samurai, you'll want to make sure  that you still do a thorough job in researching your keyword competition  and commercialization before deciding on a niche. Google's free keyword  tool and traffic estimator can help, but I recommend you use one or two  other free tools on the web to verify your findings.
This is the list of keywork tool
1. Market samurai ($147)
2. Ubersuggest (This is great for me recommend free)
3. Google's Keyword Tool ( free)
Selecting Your Keyword Phrases
I like to start with a wide niche phrase and allow Market Samurai to  suggest other popular terms and phrases. By starting with a general  term, I'm letting Google and Market Samurai tell me what users are  searching for and usually I find several search terms that I hadn't even  thought of.
Market Samurai takes the list returned from Google's Keyword Tool and  allows you to filter using positive and negative keywords. Then you can  take that list of keywords and filter the results using data from  Google's traffic estimator tool. I'm not even sure if you can do this  via the free web tools on Google's site, but in Market Samurai it is  very easy. By setting specific filters like search traffic,  phrase-to-broad ratio, and several commercialization factors you can get  a very clear picture of which words to focus on.
Checking the Competition
Once you have your list of 1 primary keyword phrase and 4 additional  keyword phrases, you should research the page one results in Google to  see if you will be able to out rank your competition. In the video, I  show you how Market Samurai's SEO Competition module does this for you.  If you don't have Market Samurai yet, don't worry all of the information  can be pulled from Google using a variety of browser plugins and tools.  If you would like to do it yourself, I recommend the SeoQuake SEO Extension for FireFox. It will display the PR value for each results plus it pulls backlink and domain information for each listing.
Determine Profitability
One last thing I like to do before I settle on a niche and keyword  phrases, is to take a quick peek at what products are available to sell.  Since our goal is to make money, we want to make sure that there are  products to sell and buyers willing to make a purchase. I usually browse  the related categories on ClickBank or Amazon for products that are  converting well. I'll also spend a little bit of time looking for  popular products that may be offered through other affiliate programs  either directly or through someone like Commission Junction.
It's important not to spend a lot of time on this step as you can easily  get bogged down in over analyzing niche keywords, competition and  products. You want to make sure that the process doesn't stop you from  taking action. If you are passionate about a topic and do a little bit  of keyword research, chances are you will be able to make some money at  it.
Good  luck in your keyword research. Check out the links below for more  videos on keyword research and setting up niche sites for profit.