Penny Stock Tips from Stockguru: Why is the Stop Loss Order So Dangerous?

Penny Stock Tips from Stockguru: Why is the Stop Loss Order So Dangerous?

I have a long conversation with a member earlier today about losses he has taken in his account – only when trading penny stocks. I do not consult individuals, but I took his call and asked just a few questions before I found out exactly what he did wrong.

He expressed to me how “conservative” he was and how “careful” he was as a stock trader. He said he was down 40% or more in virtually all of his penny stock transactions.

Why?

I asked him why he would buy at what is relatively the lowest price as he told me he did, and then sell at a loss.

Then he threw in the famous answer I heard so many times.

“Oh, my stop loss order kicked in.”

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