Some folks who trade penny stocks will try to ride the stock for the duration of it's run. However, penny stocks are very volatile, and for this reason are very risky. Literally, in a matter of seconds, a penny stock's pps (price per share) can rise or fall hundreds of percentage points.
Therefore, it's a great idea to have a trading strategy and set a sell order immediately after your buy order is filled.
Any good trader will tell you that there are rules to successful trading. Here are just a few good pointers to keep in mind...
When you enter a trade, know in advance when you plan to exit. Set your sell order at that point. That way, if the stock continues to move up, then you will end up selling on the Ask price, and the momentum of the stock can continue for other traders.
This brings up another point: if you discover a stock on the move up, be very cautious not to "chase" the stock to get a buy order filled. It's much safer to wait for a pullback of the stock and enter the trade then.
It can be difficult for a new trader to get a grip on this one... keep your emotions out of your trades. If you can't trade without getting emotionally involved, then stay out of the trade. Your emotions will cloud your ability to make good decisions.
And a closely related rule is to never trade with more money than you can afford to lose. Now while you never expect to lose, you should only use funds that
are extra.
Don't "marry" any penny stock. They make terrible bed-mates. You may like one in particular who has performed well for you, but I assure you, it will not be faithful to you. You might come back and visit it again in the future, but as a rule, love 'em and leave 'em.
Perhaps the golden rule of trading penny stocks is this: "Bears make money, bulls make money, but pigs get slaughtered". Don't get greedy! For this reason, my current trading strategy is to make only 50% on every trade. When you are familiar with penny stocks, you understand that 50% can be ridiculously low. But, it's still much better than losing 10% on a trade that turns south. Besides, 50% is a very practical and safe trading goal. Over the past few trades that I've been involved with, I've attained my 50% goal in a matter of just a few minutes.
Follow the rules and you can enjoy being a successful penny stock trader.
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You may ask, "How can I get a virtually guaranteed return of 25% - over 300% or more on my investment in days, hours, or even minutes?" The answer: By Trading Penny Stocks. We're here to train and equip you to do just that. Starting with as little as $500-$1,000 and following our alerts, you can earn a 25%-300% return or more... usually much more, in only a matter of days to mere minutes (see disclaimer).
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