How To Trade The Best Penny Stocks To Buy

The usual question I get when people find out I trade penny stocks is “so what are the best penny stocks to buy?”

Then they’ll always tell you their ‘war stories’ about how if they did this, or had they stayed in, or had the sold out, they would have made 10 billion dollars in a minute. And more annoyingly, they’ll tell you about how what this analyst said didn’t work, or that some system doesn’t work, or that the stars weren’t aligned in their favour.

Balderdash!

You see the problem with these guys (and gals) is that they don’t know how to trade. And because they don’t know how to trade, they won’t be able to choose the best penny stocks to buy even if it hit them in the face.

Imagine driving a Ferrari without knowing how to drive; that’s about where a ‘trader’ who knows the best penny stocks to buy but who doesn’t know how to trade is. Now that ladies and gentlemen is a dangerous game.

Does this sound familiar? Don’t fret, you just need to know the rules of the trading game. These are tried and tested rules that won’t guarantee profits, but it certainly will improve your trading. So when you discover the best penny stocks to buy, you’ll know how to trade them for a profit:

“Plan Your Trade And Trade Your Plan”

You need to plan your entry, exit, and the capital risk, before you make the trade. Even if it’s one of the best penny stocks to buy since penny stocks were invented, it won’t be unless you have a plan to make money with it. Trading without a plan is like an NFL team trying to win a football game without a game plan.

Capital Preservation Is Crucial

As a trader it’s nice to make profits, but preserving capital will allow you to survive to trade for another day. Risking about 5% on each trade is a sensible idea. If you’re finding your stress levels are increasing and you’re having difficulty sleeping because you’re worried about your trade, then you’re risking more than you’re comfortable with.

The Trend Is Your Friend

Never go against the trend. If the market is bullish, go long. If you the market is bearish, go short. Why swim against the tide, when it is a lot easier (and profitable) going with the flow?!

Trade With No Emotions

Greed and fear can play a huge part in the way you trade. Unfortunately, when either gets involved, it usually isn’t very profitable. Leave your emotions out of your trades, and just follow your rules.

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