Can You Lose Money Trading Penny Stocks?

The Downside of Trading Penny Stocks?

Trading penny stocks can make you a lot of money in a short amount of time. However, no matter how good you are at penny stock trading there will come a time where you lose money.

And how you deal with losing money in the penny stock market in the short term will effect how much money you’ll be able to make in the long term.

In this article you will learn how to deal with penny stock losses the right way and not give into to fear or greed.

What to do when you’re wrong?

An expert at anything always has a plan for when things go wrong & great penny stock traders are no different. Before buying a penny stock you should clearly decide how much you’ll willing to lose on the trade & always have an exit plan.

A good rule of thumb is to lose no more then 25% on a given penny stock trade. This allows you a lot of room to hold on to your shares, while also making sure that a few consecutive bad trades won’t wipe out your trading account.

Note: there is no hard fast rule when it comes to how much you’ll willing to lose on a trade. The most important thing to do is to pick an acceptable amount depending on your appetite for risk and to stay consistent.

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