Trading penny stocks successfully require having targets and stop-loss orders. The reason is penny stock promotions make specific price movements on a consistent basis before going back to the penny “stock graveyard” where the came from. If you want to capture a piece of the pie you must know when is the right time to exit.
Timing Is The Key On Trading Exits
Timing an entry is not hard when utilizing my strategy but exiting the trade can be a bit more complex. Figuring out your exit ahead of entering is important. If the stocks blow right through you exit then you have time to get out at an even higher price, but if it does not you should exit right at your predetermined priced and then move on.
Penny Stocks That Spike
If the stock moves up a lot more don’t worry about it since you already got out with again. Sit back and wait for the next trade. This is what profitable trading is all about. If a stock is very low priced several hundred percent is not out of the question. If you get this sort of move in one day takes profits immediately. For a stock in the $.25-1.00 range, 100-150% is usually the absolute max for one day. When you get this sort of move you will almost always have a “mean reversion” pull back so I always suggest locking in profits.
