Always give targets

Don’t simply tell the broker to buy or sell “at the market”. You may get whipsawed, especially in a thinly traded stock.

I learned this lesson the hard way when I told a broker to sell 2,000 shares of a stock that was trading at $3.25 without setting a downside limit. As a result, a big chunk of the stock went at $2.50, even though the price closed that day at $3.10. If I had set a limit of $3, I would have ended up with extra money in my pocket.

The same rule applies when you’re buying. Don’t just say: “Buy 100 shares of XYZ company.” Say: “Buy 100 shares of XYZ company at $5 or better.” This way you are explicitly telling the broker you do not want to pay more than $5 a share for the stock.