8 Common Penny Stock Trading Mistakes
There are plenty of things that can go wrong while trading penny stocks…
So today I’m going to go over some errors that people make and offer some tips on how to avoid them in your career.
If you are a veteran trader or you just got started over the weekend, we all fall victim to these eight common mistakes.
Mistake #1: You don’t know what you’re doing.
This is one of the most common, and one of the most potentially fatal penny stock trading mistakes.
Many traders see success stories like mine online and are tempted to just jump in and trade.
After all, how hard could it be, right?
Trading penny stocks isn’t hard per se, but it requires specific training and technique. If you don’t take the time to master the basics, you’re never going to build a strong foundation to make incredible money.
Mistake #2: You don’t have any strategy.
Trading penny stocks with any degree of real success requires strategy.
Honestly, to develop strategies as a penny stock trader requires a combination of two key things: learning and on the job experience…
I try to teach all my readers about different methodologies behind trading penny stocks. By learning different techniques you can try them out and see what works for you, developing your own unique style.
Investing in education and knowledge, and giving yourself the time and space to learn and develop your own style, will ultimately make you a much stronger trader. Overall, it doesn’t have to take years and years to make millions.
But if you don’t give yourself the time to develop some great strategies, you’re making a big mistake that can affect your potential success.
Mistake #3: You’re not doing your own research.
As a penny stock trader, you must be willing to do your own research on potential trades and investments.
There are a few reasons why, but really, they amount to common sense…
First, penny stocks aren’t as regulated as the companies traded on national exchanges. This means that you will have to do a little digging of your own to figure out if it’s really a smart investment.
Second, it can be confusing because there are plenty of penny stock promoters who are happy to tell you that you’re making a great investment…
…Unfortunately, they’re usually quite self-serving and promoting for selfish reasons.
I’m not saying that you can’t listen to outside advice, but never take it as the gospel without doing your own research. It’s just common sense.
Mistake #4: You’re not listening to your intuition.
I’m not going to get all penny stock spiritual with you, but you must listen to your intuition.
Your gut instinct can be a powerful thing…especially after you’ve been trained in my trading challenge.
Many students don’t even realize how much structure and planning they learn at first!!
After enough practice and studying, if you start to feel like something isn’t quite right about a trade, listen to that instinct and get out.
When in doubt get out — live by that motto.
You want to be sure to always listen to that inner voice. As you begin to practice trading more, you’ll become more in tune to what feels right and wrong. It’s a balance; the next point will address how you don’t want to be too cautious.
But, you never want to betray yourself by not listening to what your instincts are telling you.
Mistake #5: You’re too cautious.
See, this tip works hand in hand with the last one.
While you don’t want to ignore your instincts, you have to also have the bravery to take a risk.
Trading penny stocks will require you to increase your tolerance to risk.
I won’t lie: this can be difficult to do. Honestly, it’s particularly hard to do if you’ve always played it safe in your career, working 9-5 and not taking much risk.
However, the fact is that with risk comes reward.
You might not ever be totally excited by risk, but you will have to come to a place of respectful comfort with it.
This is why you gotta keep listening to what I teach.
By learning how the market works and by learning tricks to mitigate risk, you can feel more comfortable taking chances.
Mistake #6: You don’t have a strong routine.
One of the biggest penny stock trading mistakes you can make is not having a routine.
Trading, like so many other things, rewards repetition and good habits.
Moreover, a routine will benefit you as a trader in many ways.
For one, it offers you a baseline so that you can monitor your day to day practice.
For another, by following a routine you’ll be able to easily identify what is going well and what is not going well in your career, so you can adjust as needed.
Finally, a routine is almost like an exercise regime. It allows you to gain muscle memory as a trader so that you can start to get really good at what you do.
Mistake #7: You don’t have a mentor.
I’ll be completely honest. When I first started out as a trader, I did not have a mentor. This is how I know that it’s one of the most massive penny stock trading mistakes you can make to not have guidance.
I could have become rich much faster if I had.
Let’s put it simply…
Having a mentor means that you have a built-in resource in your network. Rather than learning everything the hard way, you have a source of information and experience-based advice. You also have someone who understands the world of penny stock trading.
Why on earth would you not take advantage of a resource like this?
Mistake #8: You’re giving up!!
It’s an unfortunate truth, but giving up too soon is one of the most common penny stock trading mistakes.
The truth is, it’s easy to give up.
You’ll meet many moments of resistance when it feels like you want to give up. But this is what separates the wannabes from the true players.
If you’re willing to stay with it even when things get tough, you’re avoiding a common mistake and are investing in your future success. It says a lot about you that you’re able to stick with it!
Editor, Penny Stock Millionaires