| Without question, trading penny stocks can be one | | | | major factors to take under consideration. I would |
| the most lucrative journeys you might ever embark | | | | rank them as follows: |
| on. I am well aware that the investing establishment | | | | First you need to know how much you are going to |
| has tried to keep you away from penny stocks. If | | | | commit to a particular trade. It would be unwise to |
| we were only talking about long term investments | | | | commit your entire account on any one trade. In |
| then I would heartily agree with them. However, we | | | | trading, you will experience losses. The important |
| are talking about trading. | | | | thing is to never allow any one particular loss to do |
| Penny stocks can be risky at best for the long term. | | | | tremendous damage to your capital. |
| However, penny stock fortunes can be made in the | | | | The second thing you would need to know is what |
| short term by trading in and out of various stocks. | | | | will cause you to initiate a position in a penny stock. |
| The biggest secret to making consistent large trading | | | | This is where so many fail. They jump into a trade |
| profits is to adopt a disciplined trading approach. If | | | | on the basis of a hot penny stock pick or |
| you can be disciplined, you can be successful; no | | | | recommendation when there was nothing in their |
| doubt about it. | | | | own research that indicated they should begin a |
| Before talking about what discipline means, let's first | | | | position. This is the surest way to lose money. You |
| define what is meant by a penny stock. For our | | | | to to filter out all of the noise from Bloomberg and |
| purposes a penny stock is any stock that is trading | | | | CNBC and focus on your daily evaluation of either the |
| below five dollars. As of the time of this writing that | | | | company's fundamental or technicals. |
| would include well known companies such as | | | | It is just as important to know what will cause you |
| Citigroup, AIG, E-Trade, Rite Aid, Jamba Juice, | | | | to exit a trade. This is true on both the profit side |
| Blockbuster and a host of others. Let me make it | | | | and the loss side. Before you even enter the trade |
| clear that I primarily deal with those companies that | | | | you need to know where you are going to get out if |
| are trading above 75 cents. I never trade companies | | | | the stock moves against you. And if you were |
| that trade below a penny. They are too risky for | | | | correct and you make a profit you need to know at |
| even me. | | | | what point you are going to close the trade and lock |
| So what is discipline as it relates to trading? If you | | | | in your profit. |
| are going to be successful, then there are a few | | | | |