Stomach-churning drops followed by thrill-ride highs – it’s all in a day’s work when you’re a penny stock trader riding the volatile waves of the market. And no one knows the exhilarating ups and terrifying downs quite like penny stock pro Zak Westphal.
After honing his craft trading pennies for years, Zak co-founded and became CEO of StocksToTrade in 2012 – a powerful trading platform bringing institutional-grade technology to individual traders. But his penny stock obsession started much earlier.
“I cut my teeth trading penny stocks going back to the early 2000s,” Zak recalls. “I loved the rush of uncovering potential winners before the crowds while constantly sharpening my risk management skills to survive the swings.”
Now with over a decade of experience riding the bipolar moves of the penny stock markets, we sat down with Zak to discuss his real-world views on trading extreme volatility for potential outsized profits.
Buckling Up for the Pennies Rollercoaster
When asked about penny stocks’ tumultuous price moves, Zak Westphal can’t hold back a smile. “That volatility cuts both ways – yeah, you may deal with steep drops that make your stomach churn. But you also get to experience the sheer thrill of 10, 20, even 50% single-day runners.”
However, he’s quick to point out cheap shares can crater just as quickly as they skyrocket. “It’s like an extreme rollercoaster – the highs are higher, but the lows can be brutal if you’re not prepared.”
For Zak, managing these volatile penny swings separates the winners from those left feeling dizzy. “Veteran penny traders respect the risk and put in preventive work to limit exposure. But the flipside is you get to chase the euphoric wins other markets rarely offer,” he notes enthusiastically.
Weaving Between Pitfalls to Capture Runners
So how does Zak Westphal play penny stocks’ bipolar price moves to his advantage? He outlines three key strategies:
- Set clear stop losses – “When shares turn south, have pre-set points to exit before giving back too many gains.”
- Diversify across multiple companies – “Don’t put all your eggs in one basket. Spread support levels across several penny stocks to smooth volatility.”
- Follow momentum – “Buy surges, sell pullbacks at predefined entry and exit levels to ride positive momentum.”
Most importantly, Zak stresses tuning out fear and greed. “Don’t chase stocks simply because they’re running or sell quality companies just on a bad headline. Stick to the technicals and indicators.”
Mastering Emotions: From Queasy and Reeling to Screaming With Joy
When asked about the psychological side of penny trading, Zak turns reflective. “My early days were filled with emotional trades. I’d buy surges out of FOMO, then sell panic-stricken on pullbacks – essentially buying high and selling low.”
He vividly recalls holding a quality company as it plummeted in way over 50% in just a few days. “I was depressed watching months of gains evaporate because I didn’t respect stop losses. It was a brutal wake up call but taught me risk management lessons that saved future profits.”
On the other hand, Zak beams remembering his first big runner. “I’d researched this stock deeply and built a position for weeks as it consolidated. Then bam – tge shares just erupted! My hands shook as I sold into that surge – the rush was electric.”
Now having mastered anxieties around volatility after years of experience, Zak feels uniquely suited for penny trading. “I absolutely love surfing these extreme waves – chasing oversized peak returns other markets can’t deliver. But you have to commit yourself to managing risk through research, planning, and execution. Do that and it’s by far the most adrenaline-filled corner of the markets!”
Tuning Out Media Noise and Following the Price Action
With penny stocks prone to wild swings on big news or rumors, we asked Zak how he separates quality setups from fleeting hype. As he puts it, “There’s so much promotional noise trying to sway trader psychology – you have to tune all that out.”
Instead of reacting to headlines, he stresses adhering strictly to price action triggers and technical signals. As Zak advises, “Build positions because the chart and volume align with statistical edge – not because some newsletter pumps up the story.”
He recounts an all too common trader trap: “New traders get suckered into buying the hype on a big press release, disregarding an ugly chart or impending resistance. A few days later when the shares crater, they are left overexposed having ignored technical warnings.”
By tuning out media noise and stripping trading back to raw price action, Zak avoids sticky situations: “I may hear chatter around a supposed ‘game changing’ announcement. But if the chart is weak, I pass without hesitation. No catalyst is bigger than what the chart tells you – trust the tape!”
When Research & Planning Outweighs Hype
With penny stocks there is no shortage of lofty promises and enthusiasm. But Zak knows first-hand that research and planning truly separate winners from bag holders.
“You can’t treat penny stocks like spin the wheel gambling if you want to consistently win,” Zak asserts. “Sure, one or two trades may hit, but real success requires ongoing research into quality companies combined with risk mitigation planning.”
According to Zak, traders should dig into financials to gauge business strength and read between PR lines before entries. Equally important is chart familiarity – understanding historical support, resistance, and volatility tendencies.
Zak also reminds traders not to chase extended moves, instead waiting patiently for technical entries. As he puts it: “Let the undisciplined react first. Plan smart entries during consolidations when hype calms down. That’s when you capture the meat of a move with limited downside.”
Do the work. Tune the noise. Follow price technicals. Rinse and repeat. That’s how Zak Westphal continues to master penny stocks swings for outsized gains.
Final Thoughts: Embrace the Rush but Respect the Risk
In closing, Zak Westphal leaves traders with this:
“Make no mistake – penny stocks provide an opportunity you won’t find elsewhere – you just need to make sure you have the skills to handle it. You need to respect risk management, otherwise you’ll end up with that familiar pit in your stomach.”
“Over many years of trading, I’ve learned to thrive in volatility by developing an edge then strictly sticking to statistics. If you can do that too, you’ll be well on your way to making a consistent profit out of the rollercoaster that is the penny stock market.”
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