Quote:
Originally posted by bobmsmythe
I'll give you only one piece of advice if you insist on trading this way: Set down some *concrete* rules and stick with them. If your rule says sell if you're down 20%, damn well sell when you're down 20%. Don't stick on the thing praying it's gonna come back. There's a human tendancy to want to sell the winners to "lock in" profit and to hold the losers in the hopes that you'll get your money back. This is a bass-ackwards way to trade. That said, remember that penny stocks are for companies that by definition are <i>not</i> making money and have little in the way of funding, and that when companies like this cease operations you will not get any kind of warning ahead of time. It sounds like you're putting all of your money in a single stock at any given time. That's a very dangerous game when you're talking about a company that may or may not be there tomorrow. Remember always that you're not buying a symbol. You're buying a piece of a company. If that company is shit, congratulations, you just bought 2,000 little pieces of shit. There's always the "greater fool" theory of investing, and it works sometimes, but somebody always ends up holding the bag. That person never set out to be the greatest fool.
Bob
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I'm only putting a third of my capital into any one stock. Not risking it all.
I guess I should also pick stocks with a decent average daily volume so if I do need to bail I might be able to, eh?