My three simple rules that I have learnt during my experiance in the small cap (both US & Canadian) are:
1- Do not be greedy otherwise you will be a bag-holder.
2- Know the cause for buying. There are two:
A- Momo: this one is roles back into the first rule. Best way to get of our natural problem of greed is setting a target. This can be done by you, i.e even if the stock is still running set an exit point. Do not look back on potential gains, because that falls again into rule # 1.
Best exampe is yesterday's UNO run. Went in with 10K at 55, had a target of 80 and when they hit 81 I was out.
P.S: UNO is an amazing company, however I am not in for the long term here.
B- Good Story: This needs a longer term vision. Meanning, you might see the stock go down, however if fundementals and TA have not changed, then stay the corse and if you can buy on dips.
I will give you two examples, one turned good and the other is about to.
STP.V: the stock was silent, I bought in at 1.45 fter that it went back to 1.2 no news and nothing was changed there. Hence bought some more at 1.2. Look at it a week ago, 4$+, yes I am out.
NOT.V: stock has been silent for seven months. My average buying price is now 55.7 cents. I believe this will be a four bagger soon.
3- Sell after Good News: The last rule is one that most investors fail to do. Though, after my experiance with some stocks I am trying my best not to fall in the trap and become a bagholder.
Yes I know when good news hits we tend to believe that we own the best stock, but your great story today is only a headline tommorrow.
Again sorry for using UNO twice, but today prooves what I am trying to convey.
I hope these help.