Saturday, February 05, 2011 12:33:44 AM
The most common mistake that people make while playing these pea-wee stocks is that they play them the same way that people invest in big board stocks.
In other words, they buy them, and then just hold a long position. That style can sometimes work on these micro cap stocks, but in my opinion the way to play penny stocks and be successful at it, is to trade in and out of the stock frequently. Even if you are a so called "long" shareholder. The stocks are simply WAY too volatile to just buy them and then hold on to them. But.....VERY LARGE sums of money can be made by trading in and out of these stocks.
Another very valuable technique to learn is how to do versus purchase trades, and use them a lot. I've owned shares of INIX for years. But during that time I've probably made close to a hundred trades...maybe even more than that.
INIX may not have been the best managed stock over the last few years, but it has been a GREAT trading stock during that time.
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