Since new traders are mostly under-capitalized, this translates into being emotionally engulfed into every trade. Since lack of process is missing from their foundation, the risk aspect of the trade turns into a guessing game…..
Why do so many people start with penny stock trading? Is it for the money? Obviously. However, they do it for the adrenaline rush too. The thrill of placing a trade and making a profit. People LOVE IT! But when they lose for the first time, they say to themselves ‘Hey, maybe it’s just not meant to be a penny stock trader’ and move on to another money making adventure.