My first week at pennystocks - full disclosure
It's been a rollercoaster, and sitting Friday out. Complete beginner here with 2 weeks trading experience. First week I invested a lump sum into the big stocks I like for long holding, and this week I decided to try penny stocks. Here is what happened:
CYN: +$792.73
BHAT: +$152.30
ADTX: -$110.12
XAIR: -$90.10
FBLG: -$418.80
GNPX: -$59.86
OCEA: bag holding, current value -$256.88
Total gain: +$9.28
It has been a sleepless and tiring week, but I learned a ton, and got away without a loss, for which I am grateful. I will share my obvious-for-many takeaways below:
Don't be greedy and take profits. I got into CYN at $0.09 and was up $4.5k when it was at $0.3 and yet I let it ride until eventually sold at $0.14 for a measly $800 gain.
Don't get persuaded by the hype. Seems crazy to me now not to sell at least some at +250% gain, but I got swayed by reddit/discord hype of CYN reaching $0.5 and beyond.
Have an exit strategy. If I get lucky to get into such volatile stocks early again I'll be taking out half at +50%, and a quarter at 75% and letting the rest ride. Or I will be at least taking out initial investment from profits, and use better judgment.
Respect your stop losses. So many times I've adjusted/cancelled my SLs with ADTX/OCEA only to regret it later. Minimise your losses and move on. Do not get married to a stock. Set your stop loss to what you are prepared to lose without it affecting your mood.
Do not go in big when volume is really low. Got my generous FBLG stop loss sniped so easily at the open.
and of course last, but not least:
- Do your own due diligence. Read about the company, fully read the news yourself, check their LinkedIn and see if employees are adequate and still there. If fellow redditors are hyping it a lot, look into their post history and see their previous decisions.
Notable mentions:
MGOL - the first penny stock I came across. Spotted it early on. Was staring at $0.12 per share for hours, read the news about the merger, but didn't have the balls to go in. Missed opportunity.
PEV - read the overnight news about incredible earnings. Set the limit buy for 2k shares at $0.35 (stock at $0.25 at the time) for the pre-market and went to bed. Woke up to see the order wasn't filled because Robinhood only trades this stock during market hours. Frustrating but lesson learned and migrating a lot of my portfolio onto another platform.
Meanwhile, my investments from the first week into NVDA, BBAI and GOOGL are up almost 20%, so overall it is a green week. I am yet to determine whether it is worth the effort, time and peace of mind to do penny stocks daily, but I sure am grateful for the experience.
Hope it's been a fun read, and have a great weekend everyone!