This post is a continuation of and is linked to basic tactics of trading penny stocks.
In this post we cover further basic tactics of trading penny stocks you need to master in order to become profitable.
Learn how to use your brokers software
This is key. Imagine seeing a great setup…gearing up to hit it and press not knowing how to buy the stock, or worse shorting it instead. It’s happened to me 🙂 . Download your broker’s software (unless you plan to trade their web-based version which usually doesn’t have all the features) and play with it! Learn how to enter, cancel, amend trades until you can do it in your sleep. Once the adrenaline hits you when you are live trading you won’t have time to mess around settings, chart options, sounds, alerts, etc.
Paper trade or jump in?
There are 2 schools of thought here, both have some merit. Paper trading enables you to test your setups and strategy however as it’s paper money you will never experience the adrenaline, fear, greed and the myriad of emotions that experience when it’s real money on the line. Tim Grittani shared a great idea – hide your P&L window – trade the pattern and chart setup instead of the unrealised profit/loss. I think this is worth trying.
This is it, gentlemen ‘start your engines!’. You will experience thrill, euphoria, anxiety, denial and anger – all rolled in one shiny package ? Controlling your emotions is key to being successful in the stock market. Read some of these books to help you get over your weaknesses.Trading penny stocks takes hard work & commitment. Take the time to learn before jumping in. Click To Tweet
Analyse your results and optimise where necessary
In order to track your progress you need to be able to analyse where you are doing well, and conversely where you need to improve. Keeping a detailed journal will help you to spot any trends. For example, maybe you revenge trade after a loss and subsequently the next 2-3 are all losers? This would be a good time to maybe cut size and trade smaller or take a break. Or maybe you trade a certain pattern better over another and it’s time to ditch the loser. Have a look at these free performance measuring tools to assist you.
Let me know what stage your are at – how are you finding the transition to the next step? Have these further basic tactics of trading penny stocks helped you?
Remember to go over these basic concepts first too.
Which tactics do you consider the most important in your trading? Please leave your comments below as I’d be interested in hearing from your experiences!