It all depends- sometimes the price increases until the PR comes out, then it drops like a rock - this is called "buy on rumor, sell on news".
True too, you can miss a move.
I like to kind of divide the ways to trade into - speculative, fundamental and technical.
I'm more of a technical trader, others on this board fall predominantly into the other categories, so we will all place our trades differently.
Of course, its better to use information from all 3, but most are more weighted in one style or the other.
Take AAPL for example - great stock right? It's got the fundamentals there, and speculation on new products can keep you going, but what about if you bought at a technically weak price like $200?
So for these pennies, (this is totally for me, and what makes me comfortable) I try put a little in on what looks like strength (more technical based) or at a low point during a consolidation phase (more speculative). For the latter, I could buy more on strength later, so that I can get more oomph on a move - but that should also be preplanned - ie. put half in on the low phase. For the trades I make that just start on strength, I still keep it small in case of reversal. If there is a big run up, like you've seen for some of these stocks, I would cut out half to most of my position, and let the rest ride for higher gains at some point. I haven't seen enough charts on the pennies to see how many peaks come out on average, so I'll be playing it by ear. But the main thing is, is that for me, I have a plan that makes *me* comfortable, which includes the amount of money I put into a trade. Also, since this isn't exactly my realm of trading, I'm ok with stepping away if I whipsaw myself too much, and not making the mistake of trying to get it all back in a hurry.
It all boils down to what your goals are, and trying to find your niche in trading. Then seeking out a lot of information on it and keeping your trades in order so that you are still around a year later. While for some, the pennies are serious business, I'm just treating it all for fun, so I plan my trades to reflect that.
We all have different styles on this board -
