In such illiquid stocks, how do you get out if it trades against you?

Pleadership asked
"You did not really answer the question? In such illiquid stocks, how do you get out if it trades against you? This is at best a 50-50 business so you must have a rule to ensure your position size does get too big relative average volume. Or not? Maybe 10% of 30 day average volume? In general, I do not think you are trading much money, because otherwise you would have such a risk parameter."

As I have said I do not trade Goldman size portfolio but a decent sized account.
My max positions in number of shares in last year have been in 5000-7000 shares range. My strategies are designed for aggressive growth in my current account. I do not worry too much about its size, I worry about growing it aggressively, while prudently managing risk.

After a initial year brush with major draw down in one thinly traded stock where I lost 30% within matter of minutes, I am extremely cognizant of risk.

How do I exit such stocks:

• I exit on trailing stops. Trailing stops move more aggressively as profit in my position increases.The moment I have more than 50% plus profit in a position, I move stops aggressively to try and protect profit as much as possible.
• I exit if I see volume increase but price is not making corresponding move up indicating churn. This is very common in stocks after they made major moves.
• I exit if stock goes in to a climax run.
• I reduce my risk by timing entry after a 65 day weakness in strong trending stocks.
• I use a liquidity filter on all trades except the earnings trade, where the nature of trade s such that the earning acts as a catalyst on such stocks. Here again I am buying after an event, which reduces risk.
• I buy stocks after they have already moved 100% plus from 260 days lows. The first 100% move is where the liquidity comes in on neglected stocks. Anyone who makes an effort to go though all the stocks in 100% plus universe will understand that by the time a stock makes 100% move, the liquidity has increased in majority of cases.
• In Episodic Pivot, which is the main method which contributes to my profitability currently, anyway the minimum volume requirements for a stock to come on scan itself are significantly high. That automatically weeds out low liquidity stocks.
  
• Above all I use a market filter to identify less risky and more risky periods. It is my observation that the stocks I trade and some of which are thinly traded, have big adverse moves only during certain periods. By trying to avoid such periods the risk is lowered. When 50% plus movers in month are above 20, I have least amount of money at risk and willing to go in to cash at any moment.

I am very conscious of risk in everything I do and try and control as much as possible by controlling what I can control.

I have also given lot of thought to how I will play this once my size account size increases. At a bigger account size in few years, I will trade this with anywhere between 50 to 100 positions in portfolio with each individual position ranging from .5 to 4% of account size based on liquidity.

Besides that I think I have an inventive mind and confidence that I can design strategies even if I have to trade billions. Besides the strategies which I have talked about publicly, I have in my arsenal many strategies suitable for trading higher liquidity stocks or the large caps or the Index. So I will trade the big account differently.

When I last checked the list of successful traders and studied their biographies, at least in my studies it shows that most of them started with small accounts and built them up.