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Never invest all of your cash in one stock. By investing all of your equity in that one stock position you are creating a risk factor that is simply unacceptable. A four stock minimum should be the starting point for any well diversified penny stock portfolio.
Got DIP? Discipline, Intuition and Patience.
Discipline will stop you from diving feet first into a stock. You should always allow time for an investment opportunity to sink in before making financial commitments. If you understand the details and the stock adds a nice diversification dimension to your portfolio, go ahead and take a small position for a while just to test the water. If it feels okay, go swimming. Never invest in what you do not understand.
Intuition by definition means a form of evidence that is often referred to as a gut feeling or hunch. It differs from common sense, which relies on someone’s philosophy or personal perspective about the correct decision path. Intuition can be seen as a very holistic decision making approach as it tries to consider and integrate information from all the senses. The main problem with intuition is that it is impossible to explain and justify, thus it is hard to say that the decision was made with reliability, accountably, and high validity. An established trader is capable, or has the ability to visualize both the buy and the sell price of any given investment long before that investment enters the accumulation level.
Patience is a virtue. Literally. Patience is your profit. This is without any doubt the most vitally important characterisitic each and every investor must posess. Discipline, intuition and patience are impossible to learn from any book or trading software. They can only be obtained with first hand life experiences and refined to perfection with years emersed in the cyclical trends the market lives and breathes by.
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Section I - Stock Market Overview
Section II - Buying and Selling Stock
Sections III & IV - Fundamental and Technical Analysis
Section VI - Federal Reserve Bank
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