While there is NO definitive rule to live by in regards to when exactly to sell a stock for maximum profits, or when, to the downside, the threshold for pain is achieved. I am admittedly much better at picking bottoms, than tops, but nonetheless, in an effort to assist, I shall endeavor to shed some light on what has worked for me.
Every stock should be entered with an exit strategy, UP or DOWN.
You must have discipline to adhere to the aforementioned.
Best to take initial profits when you have recouped most, if not all, of your investment capital, ride the rest to where it goes.
Do not marry these stocks. Every stock has a story and every poster an agenda. Recognize when both have run their course.
Certain stocks will garner a sweet spot in your heart, no problem to acknowledge same and embrace same. For me, currently that equity is BRTX. By every metric known to stock trading I should be completely out. Yet, I spent countless hours, something you are familiar with already, analyzing, dd'ing and posting on. I believe truly in the future of BRTX and their prospects, so I kept 7,500,000 shares and added 1,000,000 additional shares a week or so ago. I shall buy an additional 1,500,000 shares at a lower price point, if it goes there.
Back to my point. Take your initial investment capital off the table when feasible, illustrated by the following example:
You buy 1,000,000 shares of a .01 company, ($10,000 investment).
When the equity hits .02 cents, sell 500,000 shares, NO MATTER WHAT.
Ride the remaining shares for maximum profit, OR, until the circumstances dictate to modify your position. In other words, A MATERIAL CHANGE.
There is NO reason, or excuse, to not take profits on a 100% gain.
Then, by your own example, TSNP, do not fall in love with it. Trade it up or down, but understand at some point, momentum will leave, and the gains will disappear. I am only utilizing TSNP, (I have no shares, nor ever did), because that was the equity you mentioned. Do not buy a stock at .03 cents, sell at .10 cents and then re-buy at .20 cents, let it go. I, by my own policy, never post my sells. Two reasons, I sincerely hope that the person who purchased my shares, makes a profit, and, I never rain on others' parade. Not my game. I do not expect to make every single cent in a ticker, and NEVER rue a decision to sell, because I have already made a profit. Remember, I sell 50% of my initial position to recoup my initial investment, and still, in most cases have 50% of my initial position to make maximum profits. This allows me to recoup capital, re-invest in other tickers, or buy back some of my 50% initial sells, at lower prices. I continuously evaluate and re-evaluate my equity positions. I utilize, gut instinct, technical analysis and anticipated forward catalysts, mixed in with momentum and sentiment derived from 20 years of investing.
What I NEVER DO, is buy above levels that I have previously sold at. NEVER. This requires EXTREME DISCIPLINE, many do not have. I suffer no FOMO, EVER. I cannot get them all.
To the downside:
Mistakes will happen. A recent example of this is with ADMP. I had purchased 100,000 shares at .68 cents, believing that they would get FDA approval, which would result in a stock appreciation of at least 350%. The result was that the company received a CRL, (complete response letter, FDA speak for a rejection, telling the company to perform more trials/analysis). ADMP dropped to .43--.48 cents and I sold my entire position at .45 cents, for a $23,000 LOSS. I have traded all kinds of stocks over the years and at one time focused exclusively on biotech stocks, which were going for FDA approval, (PDUFA dates). I did not stick around with the stock because it will literally take a year to possibly a few years to get back. Acknowledge when you are wrong, it happens.
Remember, MANY PEOPLE GO BROKE WAITING ON PROFITS, BUT NONE WENT BROKE TAKING THEM.
Admit when you are wrong, but NEVER invest more than you can afford to lose. It's okay to swing for the fences, but when your team needs you to just get a hit, TEAM first. Preservation of capital is akin to blood in your body, lose too much of either, and the game is over.
90% of penny stock investors are wiped out in less than a year, BE THE OTHER 10%.
DISCIPLNE, DISCIPLNE, DISCIPLINE.
Advice is easier to dispense, rather than follow. It took me 18 years of the past 20 years to FINALLY get it. Resources relative to the staying power to have enough to invest in the stock of the day or week and maintain/add to other equities that are not rising as expeditiously as you initially thought, helps a lot. In fact it could be argued that this ability is paramount to success.
Penny stocks are rarely, if ever ACTUAL INVESTMENTS, but rather are meant to be traded like baseball cards.
I could go on ad infinitum, but hope that the preceding assists yourself, or others that struggle with decisions to buy/add or cut bait. I had to learn all of this through trial and error.
Best regards,
SPORTYNORTY
