Introduction
In this Q&A, I share how my OTC exit strategy evolved through regulation changes, liquidity shifts, and years of tracking. Over 20 years full-time, I learned that consistent exits beat discretionary decisions, especially in a changing OTC market.
Trader Talks QnA
What changed in the OTC market from 2019 to now?
From 2019 it was steady with hot months here and there. In 2020-2021, covid made everything go crazy. At the end of 2021, regulations changed—non-reporting stocks got removed, a lot disappeared. The pool got smaller. They crack down more now. A symbol like NRH crept from around 1 to 10-11, then opened near 1 from 10 after a Caveat Emptor label. That used to be the Wild West; now it opens 90% down. Promoters are mostly gone or afraid. It’s cleaned up, which isn’t great for OTC traders.
Did volume and trade counts change?
Weirdly, overall volume isn’t way less, possibly because of foreign stocks like Canadian names. But the number of trades dropped dramatically, which kills liquidity. You can have big volume on 10 trades—that’s not tradable. My scanners now often show nothing because I need liquidity.
How did you adapt your exits in 2022 and 2023?
In 2022, my best exit stopped working. I tested other exits and found one that made more with a smoother equity curve. In 2023, my original exit worked better again. My core exit is previous day’s close—if it goes red, I’m out. But OTCs now breach that a lot. I’m considering adding a bit more risk and using a low-of-day type stop for some names, like I might on listed stocks, to avoid getting shaken out when it flips green-to-red then rips back.
Will you change fully to the new exit or balance both?
It’s a balancing act. Do I keep small risk on the new stop and stick with the old proven exit, or size more into the new exit? I haven’t decided. I have data from 2015 onward because in 2018 I went back three years and started tracking exits systematically.
How did tracking exits change your results?
A friend had me execute fixed exits in a system. That made me test my own. I tracked four exits—and every single exit beat my discretionary numbers. It showed me that picking one exit and sticking to it consistently would beat what I was doing. Switching exits trade to trade creates a psychological mess. Consistent exits were a real game changer.
How did you mentally adapt to fewer opportunities?
In 2022 I tried a different exit; 2023 my original exit worked best. I got more selective but still take the trade if I like it. I stopped scanning low-liquidity names. If I look for something I shouldn’t, I’ll find it, break rules, and 9 out of 10 times it’s a loser. That’s financially and psychologically damaging. I removed those tickers from scans and focused on tracking and process when nothing’s on the scanner.
What about sub-penny stocks?
I don’t trade sub-pennies. My equity curve goes the wrong way. Over about 4–5 years I lost around $45,000 there. Even if I win one, long run I lose per my data. So I just don’t touch them anymore.
When do you give up on a strategy vs. stay patient?
It’s personal. Psychologically I can handle about a year. In 2022 I basically broke even. 2023 made up for it. If 2023 had been like 2022, I might have pivoted to listed stocks—or left the business. Also, in 2022 if I had executed perfectly, I almost would have covered bills. So part of it was me adjusting to a choppy market I hadn’t seen before.
How do you handle strings of losses on the same setup?
I keep taking them because of tracking. Every trade is unique, like Mark Douglas says. Losing eight times on the same ticker doesn’t mean I’ll lose on the ninth. The sample size matters. My strategy makes the year on a handful of trades or a single month—like about 30% of 2023 profits came in December. I have to stay ready and keep executing.
Best ways to improve psychology and consistency?
Mark Douglas was key for me—hours of his talks. Psychology is huge. Figure out why you’re trading: if you want excitement, you’ll get it, but not profits. Treat each trade as one of a sample—he talks about 20-trade samples. Track everything. I give new traders a tracking template and tell them: track exits first, then we’ll talk. You might be losing now, but a different exit could turn you profitable.
Jay Z Trade Statistics
I’ve been full-time in the OTC market for about 20 years, with data-driven exits since 2015. Results cluster: a few trades or one month can make the year. I avoid sub-pennies and low-liquidity stocks and stick to my tracked exits.
- Full-time OTC trader for ~20 years
- Exit data tracked since 2015
- About 30% of 2023 profits came in December
- Avoids sub-penny stocks (historic losses approx. $45,000 over ~5 years)
Key Trading Insights from Jay Z
Consistent execution, fixed exits, and strict liquidity filters matter more than finding action. Tracking exits can improve results without changing entries or risk per trade.
- Pick one tracked exit and stick to it
- Respect liquidity; low trade counts can mask risk
- Treat losses as part of the sample; every trade is unique
- Remove non-core scans to prevent rule-breaking and FOMO
Jay Z Trading Strategy
I center on OTC momentum and rule-based exits. The core is previous day’s close as an exit trigger, with consideration to add a low-of-day stop to reduce shakeouts when tickers flip green-to-red before moving higher.
Rule-Based Exits with Previous Day’s Close
My main exit is the prior close line—if price goes red on the day, I’m out. It’s proven over years of data to be my best overall performer when the market regime matches.
Supplemental Low-of-Day Stop for OTC Shakeouts
Because OTC names now frequently breach the prior close, I may add a bit more risk and use a low-of-day type stop on select trades to avoid repeated stop-outs during intraday reversals, similar to how I’d approach listed names.
Jay Z Tools
I rely on tracked data across TraderVue and Excel, focused scanners for liquidity, and educational content like Mark Douglas. I removed non-core scans to avoid low-liquidity temptations.
- TraderVue for trade journal data
- Excel for exit tracking and analytics
- Scanners filtered for OTC liquidity (trade count)
- Mark Douglas (Trading in the Zone, YouTube talks) for psychology
Common Trading Mistakes to Avoid
Chasing volume with low trade counts, switching exits midstream, and scanning low-liquidity names create losses and psychological damage. Respect your data and sample size.
- Breaking rules to “find” action in illiquid tickers
- Trading sub-pennies despite a losing equity curve
- Exit hopping due to fear or FOMO
- Ignoring that every trade is unique within a sample
Conclusion
OTC markets changed, but disciplined OTC exit strategy, strict liquidity rules, and psychological resilience still drive results. Track your exits, remove distractions, and let a handful of quality trades make your year. Share your questions or exit-tracking wins in the comments.