Hi TOB, If you don't mind, I'd like to follow up on your post.
First, and don't take this the wrong way because everybody does things differently, but I'm not a chart/TA guy, don't really believe in it. I was just saying what I did in this case for TPIV, and what I do for all large profits. I'm a buy and hold guy, BUT, if there are huge profits over a short time, it's just what I do.
I agree with you about the risk of stop losses on tiny stocks because if a stock is at 1.50 and you put a stop loss for 1.20, it could open gap down and you could in theory sell at .60 and be screwed. But on tiny stocks you can't put in a stop loss anyway. I used stop limits to protect against the large downside gap potential. As an example, my first stop limit was 1.20 ... the activation price was 1.20, my limit was 1.14, one trade triggers the next trade. If for some reason it opened with a gap down below the 1.14 limit that trade would not be executed and I would have to reevaluate why it gapped down and place my next trades accordingly.
You are 100% correct, for a tiny company, even if it was above $1 a share so that you could use a stop loss, I still wouldn't because like you say, you can unintentionally get screwed. For larger market cap stocks, I got no problem with stop losses, for tiny stocks, stop limits.
That's still not perfect protection because if there's really bad news overnight and it gaps down, you don't get to sell and you're screwed that way but that is very rare. I'm just a believer in take some quick profit and hold the rest of the shares for free.
I'll tell you a story about why I like the keep half the shares bit if possible. Many years ago I found a tiny tiny company named Qualcom who had military CDMA technology, when I understood and compared CDMA, TDMA + GSM technology, Qualcom was a no brainer, I knew it and CDMA would take over the world. I went in big, it went up quick, I got stop lossed out of ALL OF IT and it went right back up and I never got a chance to buy back in. I could of made a FORTUNE ... and all I could do is watch .... I said never again will I sell or get stopped out of ALL my shares.
Sell half, get back your original investment and keep half for free. All I can say is it's worked pretty well for me. I still got burned in March of 2000 but not near as bad as it could have been like so many others. To me profits without a stop loss/limit is just numbers on a piece of paper and not real money yet.
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