| An essential element of a good penny stock trading | | | | see your small starting amount of trading capital turn |
| strategy is a money management plan. For some | | | | into vending machine capital. Of course I am using a |
| people this occurs to them as common sense, but | | | | little humor here to illustrate my point. |
| some people approach trading as a form of gambling | | | | 2. Know when to cut losses. Many times you will not |
| and use little to no discipline when it comes to | | | | be able to use stop losses when trading pink sheet |
| managing their trading capital. | | | | or otcbb stocks. So you will have to use what many |
| 2 Key Factors To Help You Succeed With Penny | | | | traders refer to as "mental stop losses". Basically that |
| Stock Trading: | | | | just means that you will sell a certain stock if you are |
| 1. Divide your capital into 4 imaginary equal blocks. | | | | down a certain percentage amount or if it breaks a |
| This is simple, if you start with $1,000 in your trading | | | | key support level on the chart. |
| account, simply make a mental note to not put more | | | | You have to give your trades some room to breathe |
| than $250 into one stock/equity. If you start with an | | | | so to speak, but I usually like to cut my losses |
| odd number, just divide it by 4 to get an idea of | | | | around 30% or so. May sound like a big loss and it is, |
| what a fourth of that amount is. | | | | but when your other trades are 50% to 200% |
| You can choose to divide up your capital into thirds, | | | | winners it ends up working out. Trading micro cap |
| but I wouldn't go any further than that. If you start | | | | stocks can be a successful venture, you just need to |
| putting half of your account or more into any single | | | | use some level headed judgment. |
| penny stock, prepare to be disappointed when you | | | | |