SlideShare a Scribd company logo
1 of 5
Download to read offline
1.)Volume

Volume is the number of shares traded in a stock over a given period. High volume is not necessarily a
positive sign that a penny stock will go up in price. And very low volume can make it difficult to buy or
sell shares at a desirable price. Sudden increases in daily or weekly volume can indicate a recent or
impending change in the company's fortunes. Penny stocks trade on unregulated over-the-counter
exchanges, which greatly reduces their volume compared to the major exchanges.

2.)Profit Potential

As with any stock, a penny stock represents an actual business. Before investing, it's wise to understand
how the company plans to make money. Decide for yourself if the business model is viable. Even if so, a
crushing debt load can suffocate a promising business before it has the chance to take off. Basic
analysis, which seeks to understand the nature of the business and its finances, is an essential element
of penny stock investing.

3.)Management

A most promising factor you can find in a penny stock is an established and experienced executive and
management team. Successful executives rarely risk their reputations on overly risky operations. The
presence of a knowledgeable management team alone can lift a company above penny stock status. If
not, it is a good sign that the company will build the network and revenue it needs to thrive.

4.)Analyst Coverage

Analysts don't cover most penny stocks. Professional stock analysts usually don't initiate coverage until a
stock shows it is worth the attention. It could be a formerly successful stock has slipped into penny stock
territory, or some far-sighted analyst has picked a gem from among the rubble. Analyst reports can help
orient you on the important elements of the company's finances and business model. And they provide
at least one professional opinion on the stock's future prospects.

5.)Catalysts

A catalyst is any event likely to have a major impact on sentiment about a stock and its price. A catalyst
can be receiving a lucrative contract, securing financing, hiring a new executive or winning a successful
court decision. Usually it's impossible to know whether a catalyst will be positive or negative for the
company. However, knowing in advance of its existence allows you to play the odds of a positive
outcome. This is without leaving your money in the stock for an excessive period. Stocks without any
future catalysts are less likely to increase dramatically in price on their own. There are two types of
companies listed amongst the penny stocks. One is the startups which are looking to raise capital from a
share issue and the other is from companies in some kind of distress – usually financial. Since companies
that are dying are rarely worth investing in, we’ll look at 3 things to look for in new startup companies
that have the potential to grow big.

6.)Commercialization
This is the most common type of penny stock. Small companies will spend years researching and
developing a product that will literally turn the market on its head. When the product is released the
share price can increase substantially if it gets media coverage or a positive response from the market.
Finding a company that is developing a viable product for the market is the key. A company looking to
develop a home fusion system or a flying car is not likely to be making any profits any time soon! By
contrast Zagg designed and developed highly desirable protective coverings for Apple’s range of iPhones
and iPods and their shares jumped over 825%.

7.)Take Over Candidates

 Companies that are prime candidates to be taken over are ones with a tight synergy with a larger
company. A good example of this is the beverage giants Coca Cola and PepsiCo who used 3rd party
companies to supply all their drink bottles and in an effort to reduce costs, both companies looked in to
taking over their bottle suppliers. In one instance the Pepsi Bottling Group saw its shares jump over 94%
on the announcement that PepsiCo was looking to buy its bottle suppliers – even though there wasn’t
any indication that Pepsi Bottling Group would be one of the companies that would be targeted for a
takeover. When a company takes over another company the price paid per share is significantly higher
than the last closing price, which is why it can return very quick profits in a short space of time.

8.)Legal Fights

 Often companies are tied up in the courts trying to fight their corner over patent or copyright
infringement allegations. In the hi-tech industry these litigations can go on for years, as was the case
with Tivo who saw their stock reduced to penny share status when legal challenges were mounted
against them. However, after 5 years they were successful in getting all complaints dismissed and the
share price shot up to over $11, making the investors, who understood the intricacies of the legal battle,
a tidy profit.

9.)License Applications

 This is more for the oil and mining industries who require licenses from Governments to conduct their
business. A company who wins a license to explore for oil can expect their share price to rise
substantially, for example Rockhopper saw their price rise nearly 1,000% on the news that they were to
start exploring for oil in the Falklands Islands – and there wasn’t even a guarantee they would strike oil!

10.)My broker says it’s not possible to short sell penny stocks

Your broker stinks! See my favorite penny stock broker. You can short ANY stock down to 1 penny/share
as long as your broker can find shares to short, this is my strategy’s gift and curse.

I have made millions over the past decade and now my students have made millions over the past few
years mainly shorting pump and dumps, but there aren’t unlimited shares available to short hence why
I’m a teacher and not a hedge fund manager…
My strategy is ideal for those with accounts between $500 and $500,000, not for those with $50 million
or $500 million, it’s a poor man’s strategy, but the good news is my best students profit upwards of
$50,000 and $100,000 per year so there is still solid money to be made in this niche…in fact my best
student profiled here made $80,000+ alone last month and has been averaging $50,000/month in
profits…oh yes it pays to be a trading challenge student.

11.) If your strategy is so good, why do you teach and not just trade?

As I explained above, my strategy is not hugely scalable and thanks to the success of my TV show “Wall
Street Warriors”, I realized there was great demand from people who continually lose trading penny
stocks so the opportunity was great to correct all the misinformation out there. Teaching is usually for
those “who can’t do”, but in my case, I “can do” and my students reap the rewards by learning from a
totally self-taught and self-made millionaire trader.

My teaching business pulls in millions of dollars per year now with students in over 60 countries simply
by my being honest about how I trade – both my successes and mistakes. I’m extremely fortunate to
have found a business I love and that is honest, rewarding and fulfilling both for my students and myself.

12.) Aren’t penny stocks dangerous?

Yes, but over the past few years’ even investments previously considered “Safe” like mutual funds have
been discovered to be rather dangerous. Despite my making millions of dollars, I am nowhere near a
great trader – as my longterm students will attest – and the key to my protecting my account is that I cut
losses EXTREMELY quick if I’m ever caught with a stock heading in the wrong direction.

Also, when you have a small account, you need to take more risks in order to be able to grow your nest
egg exponentially to make it worth your time even investing/trading in the stock market. I know too
many “safe” investors who spend countless hours researching and debating and yet their yearly profits
are less than that of a part-time Starbucks barista aka not worth the time!

13.) Ignore penny-stock success stories

 You must not believe the penny-stock stories that are touted in emails and on social media websites,
just look at profitable penny stocks with solid earnings growth and which are making 52 week highs.

14.) Disregard tips and read the disclaimers

Penny stocks are sold more than bought — mostly via tips that come your way in emails and
newsletters. You must read the disclaimers at the bottom of the email or newsletter, which the SEC
requires them to do, will usually reveal a conflict of interest.

15.) Sell quickly

One allure of penny stocks is you can make 20% or 30% in a few days. If you make that kind of return
with a penny stock, sell quickly.
Unfortunately, many traders get greedy, aiming for a 1,000% return. Considering that the penny stock
you’re in might be getting pumped up, take any profits and move on.

16.) Never listen to company management

In the murky penny-stock world, don’t believe what you hear from companies. The companies are
trying to get their stock up so they can raise money and stay in business. There is no reliable business
model or accurate data, so most penny stocks are scams that are created to enrich insiders.

17.) Don’t sell short

Although shorting pumped-up penny stocks may seem attractive, don’t do it.

Penny stocks are too volatile, and if you’re on the wrong side of the trade, you could easily lose 50% or
more on a short squeeze. Another problem is that it’s difficult to find shares of penny stock to short,
especially those that made huge moves based on hype and newsletter tips. Leave shorting penny stocks
to the pros.

18.) Focus only on penny stocks with high volume

Stick with stocks that trade at least 100,000 shares a day. If you trade stocks with low volume, it could
be difficult to get out of your position. You should try to trade penny stocks that are priced as close to
50 cents a share as possible. If you have 100,000 volume and close to 50 cents a share it is easy to get
out of your position quickly.

19.) Use mental stops

Because the bid-ask spreads on many penny stocks can be high, as much as 10%, hard stop-losses can
actually cause you to lose money.

20.) Buy the best of the bunch

You need to look to buy penny stocks when they have good earnings, or when they are breaking out to
52-week highs on volume that is at least a quarter million shares a day.

The challenge is to find stocks that make 52-week highs that aren’t due to a pump-and-dump scheme.

21.) Don’t trade large positions

My rule now is not to trade more than 10% of the stock’s daily volume to limit your share size so you can
get out of the stock faster.

22.) Don’t fall in love with a stock

Every penny stock company wants you think it has an exciting story that will revolutionize the world. If
you enter the penny stock arena, be cynical, do your own research, and diversify, even if a friends or
family member is touting a stock.
Investor Awareness Marketing Firm

More Related Content

Featured

Content Methodology: A Best Practices Report (Webinar)
Content Methodology: A Best Practices Report (Webinar)Content Methodology: A Best Practices Report (Webinar)
Content Methodology: A Best Practices Report (Webinar)contently
 
How to Prepare For a Successful Job Search for 2024
How to Prepare For a Successful Job Search for 2024How to Prepare For a Successful Job Search for 2024
How to Prepare For a Successful Job Search for 2024Albert Qian
 
Social Media Marketing Trends 2024 // The Global Indie Insights
Social Media Marketing Trends 2024 // The Global Indie InsightsSocial Media Marketing Trends 2024 // The Global Indie Insights
Social Media Marketing Trends 2024 // The Global Indie InsightsKurio // The Social Media Age(ncy)
 
Trends In Paid Search: Navigating The Digital Landscape In 2024
Trends In Paid Search: Navigating The Digital Landscape In 2024Trends In Paid Search: Navigating The Digital Landscape In 2024
Trends In Paid Search: Navigating The Digital Landscape In 2024Search Engine Journal
 
5 Public speaking tips from TED - Visualized summary
5 Public speaking tips from TED - Visualized summary5 Public speaking tips from TED - Visualized summary
5 Public speaking tips from TED - Visualized summarySpeakerHub
 
ChatGPT and the Future of Work - Clark Boyd
ChatGPT and the Future of Work - Clark Boyd ChatGPT and the Future of Work - Clark Boyd
ChatGPT and the Future of Work - Clark Boyd Clark Boyd
 
Getting into the tech field. what next
Getting into the tech field. what next Getting into the tech field. what next
Getting into the tech field. what next Tessa Mero
 
Google's Just Not That Into You: Understanding Core Updates & Search Intent
Google's Just Not That Into You: Understanding Core Updates & Search IntentGoogle's Just Not That Into You: Understanding Core Updates & Search Intent
Google's Just Not That Into You: Understanding Core Updates & Search IntentLily Ray
 
Time Management & Productivity - Best Practices
Time Management & Productivity -  Best PracticesTime Management & Productivity -  Best Practices
Time Management & Productivity - Best PracticesVit Horky
 
The six step guide to practical project management
The six step guide to practical project managementThe six step guide to practical project management
The six step guide to practical project managementMindGenius
 
Beginners Guide to TikTok for Search - Rachel Pearson - We are Tilt __ Bright...
Beginners Guide to TikTok for Search - Rachel Pearson - We are Tilt __ Bright...Beginners Guide to TikTok for Search - Rachel Pearson - We are Tilt __ Bright...
Beginners Guide to TikTok for Search - Rachel Pearson - We are Tilt __ Bright...RachelPearson36
 
Unlocking the Power of ChatGPT and AI in Testing - A Real-World Look, present...
Unlocking the Power of ChatGPT and AI in Testing - A Real-World Look, present...Unlocking the Power of ChatGPT and AI in Testing - A Real-World Look, present...
Unlocking the Power of ChatGPT and AI in Testing - A Real-World Look, present...Applitools
 
12 Ways to Increase Your Influence at Work
12 Ways to Increase Your Influence at Work12 Ways to Increase Your Influence at Work
12 Ways to Increase Your Influence at WorkGetSmarter
 
Ride the Storm: Navigating Through Unstable Periods / Katerina Rudko (Belka G...
Ride the Storm: Navigating Through Unstable Periods / Katerina Rudko (Belka G...Ride the Storm: Navigating Through Unstable Periods / Katerina Rudko (Belka G...
Ride the Storm: Navigating Through Unstable Periods / Katerina Rudko (Belka G...DevGAMM Conference
 
Barbie - Brand Strategy Presentation
Barbie - Brand Strategy PresentationBarbie - Brand Strategy Presentation
Barbie - Brand Strategy PresentationErica Santiago
 
Good Stuff Happens in 1:1 Meetings: Why you need them and how to do them well
Good Stuff Happens in 1:1 Meetings: Why you need them and how to do them wellGood Stuff Happens in 1:1 Meetings: Why you need them and how to do them well
Good Stuff Happens in 1:1 Meetings: Why you need them and how to do them wellSaba Software
 

Featured (20)

Content Methodology: A Best Practices Report (Webinar)
Content Methodology: A Best Practices Report (Webinar)Content Methodology: A Best Practices Report (Webinar)
Content Methodology: A Best Practices Report (Webinar)
 
How to Prepare For a Successful Job Search for 2024
How to Prepare For a Successful Job Search for 2024How to Prepare For a Successful Job Search for 2024
How to Prepare For a Successful Job Search for 2024
 
Social Media Marketing Trends 2024 // The Global Indie Insights
Social Media Marketing Trends 2024 // The Global Indie InsightsSocial Media Marketing Trends 2024 // The Global Indie Insights
Social Media Marketing Trends 2024 // The Global Indie Insights
 
Trends In Paid Search: Navigating The Digital Landscape In 2024
Trends In Paid Search: Navigating The Digital Landscape In 2024Trends In Paid Search: Navigating The Digital Landscape In 2024
Trends In Paid Search: Navigating The Digital Landscape In 2024
 
5 Public speaking tips from TED - Visualized summary
5 Public speaking tips from TED - Visualized summary5 Public speaking tips from TED - Visualized summary
5 Public speaking tips from TED - Visualized summary
 
ChatGPT and the Future of Work - Clark Boyd
ChatGPT and the Future of Work - Clark Boyd ChatGPT and the Future of Work - Clark Boyd
ChatGPT and the Future of Work - Clark Boyd
 
Getting into the tech field. what next
Getting into the tech field. what next Getting into the tech field. what next
Getting into the tech field. what next
 
Google's Just Not That Into You: Understanding Core Updates & Search Intent
Google's Just Not That Into You: Understanding Core Updates & Search IntentGoogle's Just Not That Into You: Understanding Core Updates & Search Intent
Google's Just Not That Into You: Understanding Core Updates & Search Intent
 
How to have difficult conversations
How to have difficult conversations How to have difficult conversations
How to have difficult conversations
 
Introduction to Data Science
Introduction to Data ScienceIntroduction to Data Science
Introduction to Data Science
 
Time Management & Productivity - Best Practices
Time Management & Productivity -  Best PracticesTime Management & Productivity -  Best Practices
Time Management & Productivity - Best Practices
 
The six step guide to practical project management
The six step guide to practical project managementThe six step guide to practical project management
The six step guide to practical project management
 
Beginners Guide to TikTok for Search - Rachel Pearson - We are Tilt __ Bright...
Beginners Guide to TikTok for Search - Rachel Pearson - We are Tilt __ Bright...Beginners Guide to TikTok for Search - Rachel Pearson - We are Tilt __ Bright...
Beginners Guide to TikTok for Search - Rachel Pearson - We are Tilt __ Bright...
 
Unlocking the Power of ChatGPT and AI in Testing - A Real-World Look, present...
Unlocking the Power of ChatGPT and AI in Testing - A Real-World Look, present...Unlocking the Power of ChatGPT and AI in Testing - A Real-World Look, present...
Unlocking the Power of ChatGPT and AI in Testing - A Real-World Look, present...
 
12 Ways to Increase Your Influence at Work
12 Ways to Increase Your Influence at Work12 Ways to Increase Your Influence at Work
12 Ways to Increase Your Influence at Work
 
ChatGPT webinar slides
ChatGPT webinar slidesChatGPT webinar slides
ChatGPT webinar slides
 
More than Just Lines on a Map: Best Practices for U.S Bike Routes
More than Just Lines on a Map: Best Practices for U.S Bike RoutesMore than Just Lines on a Map: Best Practices for U.S Bike Routes
More than Just Lines on a Map: Best Practices for U.S Bike Routes
 
Ride the Storm: Navigating Through Unstable Periods / Katerina Rudko (Belka G...
Ride the Storm: Navigating Through Unstable Periods / Katerina Rudko (Belka G...Ride the Storm: Navigating Through Unstable Periods / Katerina Rudko (Belka G...
Ride the Storm: Navigating Through Unstable Periods / Katerina Rudko (Belka G...
 
Barbie - Brand Strategy Presentation
Barbie - Brand Strategy PresentationBarbie - Brand Strategy Presentation
Barbie - Brand Strategy Presentation
 
Good Stuff Happens in 1:1 Meetings: Why you need them and how to do them well
Good Stuff Happens in 1:1 Meetings: Why you need them and how to do them wellGood Stuff Happens in 1:1 Meetings: Why you need them and how to do them well
Good Stuff Happens in 1:1 Meetings: Why you need them and how to do them well
 

Investor Awareness Marketing Firm

  • 1. 1.)Volume Volume is the number of shares traded in a stock over a given period. High volume is not necessarily a positive sign that a penny stock will go up in price. And very low volume can make it difficult to buy or sell shares at a desirable price. Sudden increases in daily or weekly volume can indicate a recent or impending change in the company's fortunes. Penny stocks trade on unregulated over-the-counter exchanges, which greatly reduces their volume compared to the major exchanges. 2.)Profit Potential As with any stock, a penny stock represents an actual business. Before investing, it's wise to understand how the company plans to make money. Decide for yourself if the business model is viable. Even if so, a crushing debt load can suffocate a promising business before it has the chance to take off. Basic analysis, which seeks to understand the nature of the business and its finances, is an essential element of penny stock investing. 3.)Management A most promising factor you can find in a penny stock is an established and experienced executive and management team. Successful executives rarely risk their reputations on overly risky operations. The presence of a knowledgeable management team alone can lift a company above penny stock status. If not, it is a good sign that the company will build the network and revenue it needs to thrive. 4.)Analyst Coverage Analysts don't cover most penny stocks. Professional stock analysts usually don't initiate coverage until a stock shows it is worth the attention. It could be a formerly successful stock has slipped into penny stock territory, or some far-sighted analyst has picked a gem from among the rubble. Analyst reports can help orient you on the important elements of the company's finances and business model. And they provide at least one professional opinion on the stock's future prospects. 5.)Catalysts A catalyst is any event likely to have a major impact on sentiment about a stock and its price. A catalyst can be receiving a lucrative contract, securing financing, hiring a new executive or winning a successful court decision. Usually it's impossible to know whether a catalyst will be positive or negative for the company. However, knowing in advance of its existence allows you to play the odds of a positive outcome. This is without leaving your money in the stock for an excessive period. Stocks without any future catalysts are less likely to increase dramatically in price on their own. There are two types of companies listed amongst the penny stocks. One is the startups which are looking to raise capital from a share issue and the other is from companies in some kind of distress – usually financial. Since companies that are dying are rarely worth investing in, we’ll look at 3 things to look for in new startup companies that have the potential to grow big. 6.)Commercialization
  • 2. This is the most common type of penny stock. Small companies will spend years researching and developing a product that will literally turn the market on its head. When the product is released the share price can increase substantially if it gets media coverage or a positive response from the market. Finding a company that is developing a viable product for the market is the key. A company looking to develop a home fusion system or a flying car is not likely to be making any profits any time soon! By contrast Zagg designed and developed highly desirable protective coverings for Apple’s range of iPhones and iPods and their shares jumped over 825%. 7.)Take Over Candidates Companies that are prime candidates to be taken over are ones with a tight synergy with a larger company. A good example of this is the beverage giants Coca Cola and PepsiCo who used 3rd party companies to supply all their drink bottles and in an effort to reduce costs, both companies looked in to taking over their bottle suppliers. In one instance the Pepsi Bottling Group saw its shares jump over 94% on the announcement that PepsiCo was looking to buy its bottle suppliers – even though there wasn’t any indication that Pepsi Bottling Group would be one of the companies that would be targeted for a takeover. When a company takes over another company the price paid per share is significantly higher than the last closing price, which is why it can return very quick profits in a short space of time. 8.)Legal Fights Often companies are tied up in the courts trying to fight their corner over patent or copyright infringement allegations. In the hi-tech industry these litigations can go on for years, as was the case with Tivo who saw their stock reduced to penny share status when legal challenges were mounted against them. However, after 5 years they were successful in getting all complaints dismissed and the share price shot up to over $11, making the investors, who understood the intricacies of the legal battle, a tidy profit. 9.)License Applications This is more for the oil and mining industries who require licenses from Governments to conduct their business. A company who wins a license to explore for oil can expect their share price to rise substantially, for example Rockhopper saw their price rise nearly 1,000% on the news that they were to start exploring for oil in the Falklands Islands – and there wasn’t even a guarantee they would strike oil! 10.)My broker says it’s not possible to short sell penny stocks Your broker stinks! See my favorite penny stock broker. You can short ANY stock down to 1 penny/share as long as your broker can find shares to short, this is my strategy’s gift and curse. I have made millions over the past decade and now my students have made millions over the past few years mainly shorting pump and dumps, but there aren’t unlimited shares available to short hence why I’m a teacher and not a hedge fund manager…
  • 3. My strategy is ideal for those with accounts between $500 and $500,000, not for those with $50 million or $500 million, it’s a poor man’s strategy, but the good news is my best students profit upwards of $50,000 and $100,000 per year so there is still solid money to be made in this niche…in fact my best student profiled here made $80,000+ alone last month and has been averaging $50,000/month in profits…oh yes it pays to be a trading challenge student. 11.) If your strategy is so good, why do you teach and not just trade? As I explained above, my strategy is not hugely scalable and thanks to the success of my TV show “Wall Street Warriors”, I realized there was great demand from people who continually lose trading penny stocks so the opportunity was great to correct all the misinformation out there. Teaching is usually for those “who can’t do”, but in my case, I “can do” and my students reap the rewards by learning from a totally self-taught and self-made millionaire trader. My teaching business pulls in millions of dollars per year now with students in over 60 countries simply by my being honest about how I trade – both my successes and mistakes. I’m extremely fortunate to have found a business I love and that is honest, rewarding and fulfilling both for my students and myself. 12.) Aren’t penny stocks dangerous? Yes, but over the past few years’ even investments previously considered “Safe” like mutual funds have been discovered to be rather dangerous. Despite my making millions of dollars, I am nowhere near a great trader – as my longterm students will attest – and the key to my protecting my account is that I cut losses EXTREMELY quick if I’m ever caught with a stock heading in the wrong direction. Also, when you have a small account, you need to take more risks in order to be able to grow your nest egg exponentially to make it worth your time even investing/trading in the stock market. I know too many “safe” investors who spend countless hours researching and debating and yet their yearly profits are less than that of a part-time Starbucks barista aka not worth the time! 13.) Ignore penny-stock success stories You must not believe the penny-stock stories that are touted in emails and on social media websites, just look at profitable penny stocks with solid earnings growth and which are making 52 week highs. 14.) Disregard tips and read the disclaimers Penny stocks are sold more than bought — mostly via tips that come your way in emails and newsletters. You must read the disclaimers at the bottom of the email or newsletter, which the SEC requires them to do, will usually reveal a conflict of interest. 15.) Sell quickly One allure of penny stocks is you can make 20% or 30% in a few days. If you make that kind of return with a penny stock, sell quickly.
  • 4. Unfortunately, many traders get greedy, aiming for a 1,000% return. Considering that the penny stock you’re in might be getting pumped up, take any profits and move on. 16.) Never listen to company management In the murky penny-stock world, don’t believe what you hear from companies. The companies are trying to get their stock up so they can raise money and stay in business. There is no reliable business model or accurate data, so most penny stocks are scams that are created to enrich insiders. 17.) Don’t sell short Although shorting pumped-up penny stocks may seem attractive, don’t do it. Penny stocks are too volatile, and if you’re on the wrong side of the trade, you could easily lose 50% or more on a short squeeze. Another problem is that it’s difficult to find shares of penny stock to short, especially those that made huge moves based on hype and newsletter tips. Leave shorting penny stocks to the pros. 18.) Focus only on penny stocks with high volume Stick with stocks that trade at least 100,000 shares a day. If you trade stocks with low volume, it could be difficult to get out of your position. You should try to trade penny stocks that are priced as close to 50 cents a share as possible. If you have 100,000 volume and close to 50 cents a share it is easy to get out of your position quickly. 19.) Use mental stops Because the bid-ask spreads on many penny stocks can be high, as much as 10%, hard stop-losses can actually cause you to lose money. 20.) Buy the best of the bunch You need to look to buy penny stocks when they have good earnings, or when they are breaking out to 52-week highs on volume that is at least a quarter million shares a day. The challenge is to find stocks that make 52-week highs that aren’t due to a pump-and-dump scheme. 21.) Don’t trade large positions My rule now is not to trade more than 10% of the stock’s daily volume to limit your share size so you can get out of the stock faster. 22.) Don’t fall in love with a stock Every penny stock company wants you think it has an exciting story that will revolutionize the world. If you enter the penny stock arena, be cynical, do your own research, and diversify, even if a friends or family member is touting a stock.