STOP-LOSS-TO-INCREASE-LOSSES

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

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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.”

UP NEXT: LEARN WHY THIS IS NOT SUCH A GREAT IDEA FOR PENNY STOCK TRADING

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I then asked him this: “Did almost all of these stocks trade above your original buy-in price within a few hours or a few days of your stop loss order clearing you out?”

He answered yes.

I referred him to my article:

Five Things Regular Investors Do WRONG When Playing Penny Stock Picks

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Click on Image to Learn More on the Issues with using a Stop Loss Order with Penny Stocks

Here is a quote:

“Experts on the major markets use the infamous Stop Loss Order – Don’t Make That Mistake!.  In the penny stock markets it is financial suicide to use a Stop Loss Order.”

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LEARN MORE HERE

UP NEXT: READ THE FIVE THINGS REGULAR INVESTORS DO WRONG WHEN PLAYING PENNY STOCKS

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