Things I've learned after one week in the penny stock game

So I’ve been playing with the pennies for about a week and I’ve learned a couple of things right off the bat. First, I need to learn to read charts. While I understand an active or realtime chart, understanding how to analyze a historical chart is a key element to making successful plays. So that’s on the to do list. Another thing I’ve figured out is that if you chase a rising stock, you’re probably going to get stuck with, so don’t bother. Sometimes pennies can benefit a long position but from what I’m learning, that is not hardly the norm. Here’s some of the advice I’ve received.

“Buy low, Sell High” – well duh to that one.

“Don’t be greedy.. you will always lose if you are” – oh how true is this.

“Protect your profits” – Amen! Again, don’t be greedy.

So far my problem has been picking an appropriate entry point. I’ve chased several stocks that started out running but didn’t get in until they were starting to peak. I’ve only been buying about $100 worth of shares but I did manage to make $15 on GOIG and $60 on EVXA but turned around and lost that $60 again on EVXA the next day. Oh well. All three time, I got in at too high a price and instead of looking at what the stocks had done in past after a good day, I assumed that momentum could be maintained. NOT!

Good picks seems to be fueled mostly on some type of news released by the company which sends the stock upwards but rarely keeps it there. Something to keep in mind is most news seems to be fluff so before you jump on the latest hot pick, make sure you check it out first.

One other important lesson I’ve learned. If you think you should exit a position, DO IT!!! Don’t wait to see if it’s going to uptick again. I’m holding two positions in which I’ve made that mistake 3 times now. Had I gone with my first instinct and got out, I’d be up about $500. But no, I held and each time the stock reversed quicker than I could react. Now I’m stuck holding the bag waiting/hoping it can make a play again and I can get out without a loss. Which is certainly possible but until I choose to take a loss and free up that cash or can exit the position on a positive, I’ve got money I can’t use.

Tagged as: element, fluff, goig, instinct, mistake, momentum, norm, one don, pennies, profits, realtime chart, stock, stocks