When trying to measure the risk reward ratio in the Micro-Cap world it is often difficult to quantify.  One
    way to distribute your money properly is to use less money when starting out with a lower priced stock.  We
    use either 6, 7, or 8% of our money per trade and the amount depends among other things on the price.  
    Stocks below a penny are almost always candidates for 6%, while anything over $.20 would be an 8%er.

Do not be afraid to diversify your portfolio with many different securities.  Even with a small amount of
capital you stand a better chance of of picking a few winners than if you only buy one stock at a time.  The
more good companies you buy the more likely you will have 50% of them double or more for you.  Not
putting all your eggs in one basket is one thing Wall Street has right and you will definitely benefit from it.

           We have had as much as 50% in one stock before and it panned out pretty well.  We have also had as
    little as 5% cash and as much as 75%.  Right now we are ready for any curve ball the market throws at us.  
    Historically we have had the best gains when our portfolio was lopsided one way or another but incurred
    losses in this situation as well.  When our portfolio has been spread out like it is now, we have had smaller
    gains, but it has been a much safer strategy.  We will undoubtedly be lopsided again if and when the
    markets make that decision for us.  Our job is to go with the flow and to have plenty of opportunities
    available at all times.  We feel that by being invested in many issues during dull times, we have the best
    chance for a 10 bagger.  If you find yourself running out of options, then get some more.

There are many advantages to trading OTC BB stocks although it may not appear that way at first.  We
combine the low risk of diversification with high risk stocks and are able to control our losses.  We are also
available to take advantage of huge gains out of these stocks.  Try to find listed stocks or indices that
closely relate to a particular stock on the OTC BB and notice the correlation of highs and lows.  Now look at
the percentage discrepencies and you will begin to understand the difference.
    Risky Business
    PSW Staff
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