Checklist on the best penny stocks to buy with risk management and position sizing

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RKD
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Joined: Sun May 10, 2020 6:30 pm

Checklist on the best penny stocks to buy with risk management and position sizing

Post by RKD »

#Pennystocks a checklist

Amit Gulecha, a noted expert on penny stocks, has prepared a checklist on how to buy the best penny stocks. He has also explained the rules of entry and exit and also the norms relating to risk management:

Checklist

- Not Bankrupt
- Been in business for 10-20 years
- Visible Business
- Fundamentals in distress
- trading at multi year low
- forming rounding / flat bottom
- RSI on monthly < 40
- Price near Lower bb
- Price > 7Monthly / weekly EMA (Entry)

What are the risks of Investing in Penny stocks?

Chances of

- Delisting
- Re to paisa
- not moving for years
- total loss of capital
- Trading suspension due to non compliance
- shifting to T / Z or Auction base trade
- drying up volumes
- LC

Understand & Define Risk

Position Sizing
For Eg Capital is 10 lk ,

Case 1

- Buy #PennyStock worth 10k (1% of capital)
- Cracks 50%, loss on total capital is 0.5%

Case 2

- Buy #PennyStock worth 100k (10% of capital)
- Cracks 50%, loss on total capital is 5%

Generally unless co gets delisted / trading gets suspended / or co stops doing all compliance , chances are always there that some chindi operator might me interested in ramping up prices !!

Risk-Management

- Have a pre-defined exit in mind in terms of booking out loss
- if goes against are plan chances are it be trading at lower circuits !!
- there is no other way else then waiting for an exit

Entry

- try to buy near lower end of trending move and not when its dead
- buy in parts and not all at one go

Understand clearly investing in #pennystock is most riskiest kind of investment where chances of invested money in such stocks is subject to 100% loss

According to the principles laid down by Amit Gulecha, a few penny stocks that are worthy of being explored are the following:

Jiya eco
Kellton Tech
Rajoo Engineers
South Indian Bank
Bajaj Hindustan Sugar
Bank of Maharashtra
Subex
VikasEcotech
JP Associates
Sumeet Industries
VODAFONE Idea
Orient Green
manpasand beverage
vikash propent
Syncom formulation
sanwaria
GMRINFRA

Shivarama Karkala
Posts: 20
Joined: Mon May 11, 2020 8:03 pm

Re: Checklist on the best penny stocks to buy with risk management and position sizing

Post by Shivarama Karkala »

Excellent write up of checklist on how to buy the best penny stocks.

I have used similar thought process to buy STL GLOBAL and Somi Conveyors.

Both penny stocks were up 20% on Friday with huge volumes.

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