Losing the Gambling Mentality...
Many people who trade penny stocks naturally have a gambler's mentality. I am no exception. We work hard plugging away every day and every now and then we hit that big winner and lock in very nice profits. When staring at these profits it is very natural to take on the essence of a kid in a candy store with a fist full of dollars. We often immediately want to rush to invest that money so that we can put our profits to work for us right away to further grow our money.
As a result, we often handle profits less diligently than we might have handled our initial investment. This is the gambler's mentality. My suggestion when you lock in a nice profit is to take a deep breath, relax, and get to know your money for a little bit. It is YOUR money now, not mere profit, but real money that is yours. I am not saying not to re-invest it again when a good trade is spotted, as I can promise you that I never have too much loose change lying around myself. But in essence imagine that with every trade that you go into that you are handling your initial investment and are not simply "gambling" away your profits.
Ask yourself the question when looking to re-invest those locked in profits in a particular trade:
Would I be just as optimistic about this trade if my account was in the red?
Think about it...if you are loosing money you become much pickier with the trades that you select...put yourself in this frame of mind when buying all securities and you will avoid reckless emotional trading and be much less likely to give back your profits to the market...
Cheers and good trading...
AI
