Two of my next three plays are microcap stocks.
Microcaps are often thinly traded. A small-volume spike or a minor news item can move one of these by a huge percentage in either direction, so you have to be uber careful how you trade them, and limit prices are mandatory.
Microcaps are companies worth between $50 million and $500 million. Very few – if any – analysts cover them. Institutional ownership is often low.
That absence can create problems.
Institutions provide steady volume on both sides of the market. Without them, you’re trading against a handful of retail buyers and sellers who may or may not show up today.
A market order tells your broker to fill you at whatever price is available.
In a liquid stock… that’s fine.
In a microcap… there might be a few hundred shares sitting on the offer. Your order takes those, climbs to the next price, then the next one, until it’s filled.
You end up paying a price nobody would have agreed to on purpose.
That’s slippage, and it happens before the stock has done anything at all.
People don’t pay limits. I see it constantly… and it takes money out of your pocket and out of mine.
It happens on the entry when you chase the offer, and again on the exit when you panic and hit whatever bid is sitting there.
I’d put out more of these trades if I knew people would use limits.
When a recommendation goes out to a big list and people market-order into a thin stock, the fills get worse for everybody, including the ones who did it right.
A limit price sets the most you’ll pay to buy or the least you’ll take to sell. If the stock runs past your number, you don’t get filled.
You have to be okay with that. Missing a fill on a microcap is not the disaster people think it is, and it’s cheaper than getting filled well above where you wanted to be.
Most people remember the limit on the way in and forget it on the way out.
The exit is when you’re most likely to be in a hurry. Set your sell limits at the same time you set your buys.
The next issue of Monument Trend Advisory comes out with all three plays, the buy ranges, and the exact limit prices I want you using.
Use them.
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FUN FACT FRIDAY
Leopold Aschenbrenner – a German AI researcher and investor – launched the “Situational Awareness” fund in late 2024 and exploded to a reported $45 billion peak by early July 2026 on heavily leveraged AI infrastructure bets.
Just weeks later, a sharp July sell-off triggered margin calls. July 29-30 the firm held an emergency overnight auction and sold more than $10 billion of public stock to Citadel at a discount. Brutal reminder: leverage can turn even the sharpest, best-timed ideas into a rapid wipeout when markets reverse.
