Penny Stock Guide - Penny Stock Trading Rules
 

The following penny stock guide and trading rules will help you maximize profits and limit your downside. It's quite obvious that penny stocks can be very volatile, so never invest all your money into any one penny stock. This also applies to any single stock in general. Diversification is one way to minimize risk.

1. Never invest all of your capital into one penny stock.

 

2. Use a hard or mental stop loss to minimize loss.

 

3 Penny Stocks move before fundamentals.

 

4. Trade on penny stock potential and not on their fundamentals.

 

5. Chart technicals will only work in certain situations when pertaining to penny stocks.

 

6. The trend is your friend. Do not fight the tape. Do not get emotional over stocks.

 

7. Strong end of day volume could indicate follow through next day.

 

8. Think outside the box. As #6 says, the trend is your friend, but its okay to take profits off the table by locking them in. Remember, not one investor/trader has lost a single cent by locking in profits.