Question: Swing trades, day trades, long-term investments. Exchange-Traded Funds (ETFs). NASDAQ, NYSE, AMEX, Pink sheets, and Over the Counter Bulletin Board (OTC BB) trades. Is it business or gambling? Can the small guy ever really win, or is the system rigged against the masses?
As part of my continuing attempt to find unique and insightful stock-market trading advice -- especially in the volatile world of penny stocks and micro-penny stocks -- I now present to you another post from the mighty Ric at the discussion thread “So how do I make money then?” at the Allstocks.com’s Bulletin Board.
Things you need to know
By Ric.
Best two pieces of advice for pennies:
1) Don't let people convince you that a penny is a long hold. You will get burnt. Buy low, sell high, and never look back.
2) Due Diligence.
Two things that you must learn about charts immediately are RSI (the relative strength index) and Bollinger Bands. They are so important. Now there is so much you can learn in charts that will help you make choices but I consider the above the most important things to learn for any investors. RSI will let you know if there is buying pressure or selling pressure. It will also confirm a run. Bollinger Bands also show price pressures and are used to support other indicators. There are links below under TA for education on understanding charts.
Relative Strength Index
Definition:
Relative Strength Index (RSI), an oscillator introduced by J. Welles Wilder, Jr., could be more appropriately called the internal strength index, for it compares the price of a security relative to itself. The RSI is based upon the difference between the average of the closing price on up days vs. the average closing price on the down days over a given period, and is plotted on a vertical scale of 0 to 100. An oscillator refers to a momentum or rate-of-change indicator that is usually valued from -1 to +1 or 0% to %100.
Wilder advocated a 14-day RSI, although shorter and longer periods have gained popularity when the market exhibits certain characteristics. Generally, RSI is measured in a period between 5 and 25.
Interpretation:
There are several possible interpretations for the Relative Strength Index, any of which can be very powerful depending on the market conditions and trading/investment approach: One interpretation is that buy signals are triggered when RSI is in oversold (20-30) area, potentially meaning that the stock is about to reach its low for this trend, and sell signals are triggered when RSI is in overbought (70-80) area, potentially signaling a market top.
A second mode of interpretation is to look for support and resistance lines or common chart formations such as head and shoulders in the RSI itself, indicating potential reversals that the stock chart may not.
A third mode of interpretation is to recognize divergences in the RSI, such as when the price is moving up when the RSI is moving down or vice versa. This can mean that the price is going to "correct" and move in the direction of the RSI.
A fourth mode of interpretation for the RSI is to view it as a bullish or bearish signal when it crosses 50. When the RSI crosses above 50 it can be considered bullish, and when it crosses below 50 it can be considered bearish.
Bollinger Bands
Definition:
Investors use trading bands, lines drawn above and below the moving average, to isolate a range of prices for a given security, based on the concept that a stock generally trades within a predictable range on either side of the moving average. When a stock is near the upper or lower limits of the trading bands is when an investor should pay closest attention, according to conventional wisdom.
Bollinger Bands are considered some of the most useful bands in technical analysis, for they vary in distance from the moving average of a security's price based on the security's volatility. During periods of increased fluctuation, the bands widen to take this into account, and when the fluctuation decreases, the bands are tapered for a narrower focus to the price range. The upper band is the standard deviation multiplied by a given factor above the simple moving average, and the lower band is the standard deviation multiplied by the same given factor below the simple moving average.
Interpretation:
The standard interpretation is that Bollinger Bands do not give absolute buy and sell signals, but instead indicate whether the price is relatively high or low, allowing for more informed confirmation with other technical indicators.
Bollinger Bands are typically drawn two standard deviations from a twenty day simple moving average for intermediate-term analysis, ten day for short term with 1.5 standard deviations, and fifty for long-term studies with 2.5 standard deviations. According to John Bollinger, for the most accurate average "choose one that provides support to the correction of the first move up off a bottom. If the average is penetrated by the correction, then the average is too short. If, in turn, the correction falls short of the average, then the average is too long. An average that is correctly chosen will provide support far more often than it is broken."
Mr. Bollinger also contends that:
Sharp moves tend to occur after the bands tighten to the average, when a stock is less volatile. The greater the period of less volatility, the higher the propensity for a price breakout.
When the price hits the upper or lower bands, it is suggested to confirm with other indicators whether that price movement shows strength or weakness, respectively, which could indicate a continuation. If indicators do not confirm this movement, it can suggest a reversal.
Tops or bottoms made outside the bands, followed by the same inside the bands, indicate a trend reversal.
A move originating at one band tends to go to the other band.
Resources for IQCharts & DD for otcbb and pinksheets
Try these two DD tools to be quick and good with your facts. At pinksheets in a matter of seconds under Company Info I can give you o/s, any r/s, company name changes, or planned changes and more. Quotetracker is a program you install on your computer. I wouldn't survive without it in a quick paced market. Tons of TA and FA with dd. Shoot pinksheets is my homepage on Firefox browser for quick reference. This is the first two places I go for fast due diligence.
www.pinksheets.com {Company Info tab is loaded with information} {SEC Filing Tab - wow} {News Tab - Pr's at your finger tips}
www.quotetracker.com - after you set it up add a symbol quickly then charts, news, research, and raw data at your finger tips. Great charts.
DD is mainly knowing where to go.
FA – Fundamental Analysis
www.pinksheets.com - first place to look!!!! Go to Company info for o/s. r/s, name changes, and many other facts. Go to SEC tab to look for filings. News tabs for latest news that may not show up through normal wire service.
www2.barchart.com - after you enter stock symbol select opinion to see trend spotter
www.otcbbtrader.com – otcbb loser/winner by volume, price, shares, transaction, and more
www.otcbbtrader.com/portal/n_letter/ gen/Microcap_Recap_Report.html - otcbb market recap on otcbb and pinksheet market for the day
tinyurl.com/9s2wr - DD site that is great.
www.otcbb.com – otcbb news
www.boardcentral.com/ index.php?view=Main – most popular stock search
www.smallcapcenter.com – otcbb resources
smallcapcenter.com/ tools_QuickSearch.asp?page=QUICKSEARCH.ASP - free filter
www.stockfetcher.com - stock filter
knobias.10kwizard.com - SEC Edgar filings
TA – Technical Analysis
www.stockcharts.com – charting web site
bigcharts.marketwatch.com – charting web site
www.iqcharts.com/education - TA, candlesticks, chart patterns education
www.stockcharts.com/education/ChartAnalysis - teaches chart analysis
www.transitionstrading.com/Chart_Studies.htm - teaching about charts
General DD (Due Diligence/Research/Fact-Checking)
www.allstocks.com/edu/index.html - Research links
www.quotemedia.com/results.php - Free level II (not pink)/Delayed
www.nasdaqtrader.com/aspx/regsho.aspx - “Sho” list
www.nasdaq.com – Tons of information (insider trading/IPO’s/Most active/much more)
www.tradetrek.com/online.asp - General but with 5 day and 6 month forecasts
www.secform4.com – Free real time insider trader monitor
www.otcbbtrader.com/portal/goto.dll - Market Data
www.stockmarketyellowpages.com – search tool
www.rookiedaytrader.com – Some good advise here
www.epubsinc.com/ index.php?pageName=formtypes – Edgar form types and descriptions
www.shellstockreview.com/ssrShellsBySym.htm - Shell companies
www.daytradingcoach.com/index2.htm - trading tips, education, quotes and charts
www.investopedia.com/ - dictionary of stock terms, tutorials
www.stockcharts.com/education/ MarketAnalysis/dowtheory1.html - theory of market movement
www.stockcharts.com/education/ TradingStrategies - well known trading strategies
our-street.com/home.htm - list of scam companies
www.sec.gov – latest filings, litigations, proceedings, or suspensions
————————————————————
Secretary of States (Protect Yourself!)
Alabama - arc-sos.state.al.us/CGI/ SOSCRP02.MBR/INPUT
Alaska - www.gov.state.ak.us/ltgov
Arizona -www.azsos.gov
Arkansas - www.sosweb.state.ar.us
California - kepler.ss.ca.gov/list.html
Colorado - www.sos.state.co.us
Connecticut - www.sots.state.ct.us
Deleware - www.state.de.us/sos/default.shtml
Florida - www.dos.state.fl.us
Georgia - www.sos.state.ga.us/default800.asp
Hawaii - www.ehawaii.gov/dcca/ bizsearch/exe/bizsearch.cgi
Idaho - www.idsos.state.id.us
Illinois - www.sos.state.il.us
Indiana - www.in.gov/sos
Iowa - www.sos.state.ia.us
Kansas - www.kssos.org/main.htm
Kentucky - sos.ky.gov
Louisana - www.sec.state.la.us
Maine - www.state.me.us/sos
Maryland - www.sos.state.md.us
Massachusetts - www.sec.state.ma.us
Michigan - www.michigan.gov/sos
Minnesota - www.state.mn.us/ebranch/sos
Mississippi - www.sos.state.ms.us
Missouri - www.sos.mo.gov
Montana - sos.state.mt.us/css/index.asp
Nebraska - www.sos.state.ne.us
Nevada - esos.state.nv.us/SOSServices/ AnonymousAccess/CorpSearch/CorpSearch.aspx
New Hampshire -www.sos.nh.gov/index.html
New Jersey - www.state.nj.us/state
New Mexico - www.sos.state.nm.us
New York - www.dos.state.ny.us
North Carolina - www.secretary.state.nc.us/ corporations
North Dakota - www.knowx.com/northdakota/ northdakota-corporate-records.jsp
Ohio - www.sos.state.oh.us
Oklahoma - www.sos.state.ok.us
Oregon - www.sos.state.or.us
Pennsylvania - www.dos.state.pa.us/dos/site/default.asp
Rhode Island - www.state.ri.us
South Carolina - www.scsos.com
South Dakota - www.sdsos.gov/index.htm
Tennessee - www.state.tn.us/sos
Texas - www.sos.state.tx.us
Utah - www.utah.gov/ltgovernor
Vermont - www.sec.state.vt.us
Virginia - www.soc.state.va.us
Washington - www.secstate.wa.gov/corps
West Virginia - www.wvsos.com
Wisconsin - www.sos.state.wi.us
Wyoming - soswy.state.wy.us/corporat/ corporat.htm
Phone Numbers provided by HitMe101
Knight Equity Markets, L.P.
NASDAQ TRADING
800-222-4910
NASDAQ TRADING
888-515-0031
BULLETIN BOARD
800-232-3684
DELISTING/BANKRUPTCY
212-336-8656
DELISTING/BANKRUPTCY
212-336-8791
DELISTING/BANKRUPTCY
212-336-8792
INTERNATIONAL
800-762-0271
BROKER/DEALER DESK
888-302-9197
INSTITUTIONAL DESK
800-222-4895
FOREIGN BULLETIN BD
212-336-8841
HELP DESK
888-931-HELP
NITE UBS Capital Markets L.P.
JERSEY CITY, NJ
N/A
DOMESTIC TRADING
212-514-5140
FOREIGN/ADR TRADING
212-804-3354
OTC BB/PINK TRADING
800-631-3094
DEALER/SALES TRADING
800-213-2923
TD Waterhouse Capital Markets, Inc.
OTC TRADING
201-369-8830
BULLETIN BOARD
201-369-8889
BULLETIN BOARD
800-500-3905
DEALER/INST SALES
201-369-1000
DEALER/INST SALES
800-369-5775
JEFFERIES & COMPANY, INC.
BULLETIN BOARD TRDG
212-336-7007
BROKER DEALER
877-350-2855
NASDAQ TRADING
972-701-3100
DALLAS TX
800-527-6816
AGENCY TRADING
972-701-3250
DALLAS TX
877-273-9728
LOS ANGELES
310-914-1163
STAMFORD CT.
203-708-5910
866-682-2398
INTL TRADING
203-708-5890
800-525-8620
877-350-BULL
LISTED TRADING
973-912-2790
CONVERTIBLES
203-708-5868
BROKER/DEALER DESK
212-336-7007
JEFF Tradition Asiel Securities Inc.
NASDAQ
212-791-4770
OTCBB
212-791-5335
VANDHAM SECURITIES CORP.
NEW YORK NY
212-223-7510
CloseVNDM 07:30
0.015 50 Oppenheimer & Co., Inc.
NEW YORK, NY
212-422-7813
CONVERTIBLE BONDS
212-668-5764
800-682-5381
NASDAQ/OTCBB TRADING
212-422-7813
LISTED DESK
212-668-8033
INSTITUTIONAL DEPT
212-943-9055
Hudson Securities, Inc.
JERSEY CITY, NJ
201-216-9100
JERSEY CITY, NJ
800-624-0050
JERSEY CITY, NJ
212-227-7733
INSTITUTIONAL SALES
800-419-9187
201-216-0375
COLORADO
888-576-1828
BOCA RATON, FL
800-898-2777
INTERNATIONAL
888-306-1998
561-361-0951
CANADIAN ARB
201-216-1475
WM. V. FRANKEL & CO., INCORPORATED
JERSEY CITY, NJ
201-434-5005
NEW YORK, NY
212-943-6633
NEW YORK, NY
800-631-3091
SEABOARD SECURITIES, INC.
NASDAQ/OTCBB
973-514-1699
FLORHAM PK, NJ
973-514-1500
AGENCY DESK
973-514-1678
JUNO BEACH FL.
561-630-6170
Hill Thompson Magid and Co., Inc.
JERSEY CITY, NJ
201-434-8100
JERSEY CITY, NJ
212-233-2200
NASDAQ TRADING
800-631-3083
ADR TRADING
800-879-9842
CANADIAN EQUITIES
866-235-7016
BANK STOCKS
866-291-6316
CHICAGO, IL
800-999-8073
CHICAGO, IL
312-372-3828
Maxim Group LLC
NEW YORK, NY
212-895-3680
800-261-0498
OTCBB
212-895-3874
FOREIGN TRADING
212-895-3897
INTL Trading, Inc.
ORLANDO FL
407-741-5399
800-541-1977
OTCBB DESK
800-327-5703
OTCBB DESK
407-741-5394
NEW YORK, NY
212-485-3545
Bear, Stearns & Co. Inc.
NEW YORK NY
212-272-4810
OTCBB/PINK SHEETS
212-272-4975
NASDAQ TRADING
800-247-7882
EMERGING MARKETS
212-272-9297
INTERNATIONAL
212-272-4580
ARBITRAGE
212-272-4506
PREFERRED
212-272-5104
PREFERRED
800-231-8892
CONVERTIBLES
212-272-4484
HIGH YIELD DEPT
212-272-5100
OTCBB/PINK SHEETS
212-272-4975
VFINANCE INVESTMENTS, INC
OTCBB/PINK SHEETS
800-487-0577
OTCBB/PINK SHEETS
561-981-1314
NEW JERSEY
908-782-4469
NEW YORK
908-782-4469
PHILADELPHIA
856-234-2900
PERSHING TRADING COMPANY, L.P.
JERSEY CITY NJ
201-413-3531
NASDAQ TRADING
800-305-0161
BULLETIN BOARD
201-413-2700
DEALER DESK
201-413-2465
866-880-9410
Fulcrum Global Partners LLC
OTCBB DESK
212-803-7046
OTCBB BROKER/DEALER
212-803-7070
CANADIAN/FOREIGN DSK
212-803-9026
Sterne Agee Capital Markets, Inc.
BOCA RATON, FL
561-368-8373
BOCA RATON, FL
800-930-3536
DEALER SALES, FRANK
800-979-4568
DOMESTIC SECURITIES, INC.
EDISON, NJ - OTC
732-661-0300
MONTVALE, NJ OTC
201-782-0009
MONTVALE, NJ HQ
201-782-0888
BILTMORE INTERNATIONAL CORPORATION
TRADING DESK
732-791-4000
ALTERNATE
732-287-6535
—————————————————————————
Recovering a Loss
Loss vs. Gain-Needed-to-Recover-the-Loss
10% - 11.1%
20% - 25.0%
30% - 42.9%
40% - 66.7%
50% - 100.0%
60% - 150.0%
75% - 300.0%
90% - 1000.0%
Timing your entry and exit from the market is critical to making money and controlling losses.
MM Signals
100 > I need shares
200 > I need shares badly but don’t take it down to get them.
300 > Take the price down to get shares......
400 > Trade it sideways based on Supply and Demand
500 > Gap one-way or the other, usually to the direction of the 500 trade. Sometimes -if in the middle -keep the price right where it is.
Invest with your brain not with your heart. — Ric
****
Check out the Spam Stock Tracker project. -- L.B.
Penny Stocks Part 1: Psychological Trappings
Despite the dire risk of boring many readers, I've decided to blog up some investment advice.
The following is taken from a post by the mighty Ric at "So how do I make money then?," a recent discussion thread at Allstocks.com’s Bulletin Board.
PRICE IS CONTROLLED BY THE PSYCHOLOGICAL TRAPPINGS OF THE MARKET.
By realityinc21/Diana
Stage 1 - Accumulation. Stock is quiet, trading sideways and without a lot of volatility. Most everyone ignores the stock because it has no sizzle. Insiders hold large blocks of stock and quietly gear up for the distribution.
Stage 2 - Breakout. Volume jumps up, psychological barriers are broken. Insiders begin to tell their friends of upcoming significant fundamental change. Pros take notice and buy the stock on the coat tails of the well informed. The public ignores it because they have not read about the company in the paper yet. It must be a scam.
Stage 3 - Uptrend. As a larger audience learns of the company and its promise, more buying comes in to the stock and it begins to climb. Pros begin to sell, but slowly. Average investor begins to buy.
Stage 4 - Pullback. The stock has gone up too fast, and some profit taking arrives. The jumpy investor who got the entry timing right but lacks confidence in his or her decision sells the stock with a small profit, and smiles in the mirror. The Pro holds on, Average Investor looks through the newspaper to find justification for ownership of the shares.
Stage 5 - Resumption of the Uptrend. The pull back is short lived, and the stock bounces and continues higher. The wannabe regrets the sell, but provides self counsel on the merit of making a profit, albeit a small one. The Pro might sell a little bit more, but still holds the majority of the original position. The Average Investor is getting excited now, and thinks about what could have been if only he had bought when he first noticed the stock.
Stage 6 - Exhaustion of the Uptrend. The media takes notice, and communicates the company's merits to the masses. The masses buy the stock, and it goes up sharply with strong volume. The Pros sell with enthusiasm. The Average Investor owns it now, and is telling everyone who will listen. The wannabe Pro jumps back on, after all, he was smart enough to buy it when the trend started, so he knows the stock well. Will hope make it go higher?
Stage 7 - Gravity Works. Pro selling begins to weigh on the uptrend, and the stock fails to go higher despite high volumes. The stock starts to go down instead of up, and the Pro is almost sold out. The Average Investor continues to cheer lead, hoping to rally support. The wannabe ignores what the market is telling him, taking a loss is too painful to consider. The company is featured on the cover of a magazine.
Stage 8 - The Second Guess. The stock bounces and starts to go back up. The wannabe Pro averages down while the Average Investor gets back to advising friends of his stock picking acumen. Pros sell their remaining holdings and begin to look for another deal to play, or perhaps start short selling the stock.
Stage 9 - Out of Gas. The bounce is a fake out, and the stock moves lower again. The public owns this stock, and they have no more power to buy. The Pro are making money on the short sales now, but are despised by the masses. The Average Investor makes calls for short selling to be made illegal—after all, the short sellers are the demons causing the sell off.
Stage 10 - Dead Cat Bounce. The Average Investor and the wannabe Pro have no pain tolerance left, and finally sell for a big loss. The short selling Pros are the only buyers to take the share off their hands, and provide the needed liquidity. The stock bounces, and some short-term traders make a quick profit. The Average Investor either swears to never buy a stock again, or tells lively stories over drinks about the one that could have been.
Stage 11 - Post Mortem. Pros have forgot about the stock and are considering carpet samples for their new home in Florida. Average Investor continues to follow the company and buys loads of cheap stock to try and overcome the regrettable loss.
The stock market is mean. You can be a good analyst, but if you can't overcome the psychological traps of trading, you will do what the crowd does. To be successful, you have be one step ahead of the crowd, and trade with unemotional discipline. There are strategies to take advantage of each stage of the market cycle that can be applied just by looking at a stock chart. They just require a bit of knowledge.
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Everyday for the next 30 days, read this 10 times a day.
Ask yourself 10 times a day "what kind of trader am I going to be??" Am I going to be a crying whining little bitch or am I going to shake it off?? Am I going to buy to high because I do not know how to read a chart or am I going to f**cking learn how to read a chart?? Am I going to be the entertainment for this board or am I going to go the library and check out all the books that I can read on day trading and investing and stock charting. Am I going to learn how to do my own due diligence or am I going to buy on the recommendation of people from this board?? (It is pretty obvious that is what happened) they were great recommendations but you were about 5 steps behind. It looks like by the time you were buying everyone else was selling. Am I going to take this laying down or am I going to get my Goddamn money back. No one can make those choices for you!!
May seem like I am being a cold hearted bitch but this the real world baby. The question you have to address right this minute is… am I going learn on the fly or am I going to back it up and learn about what the f**ck I am doing?? You dove in headfirst now you have to learn how to swim. If you are not willing to learn how to swim—bail and take your loss. Day trading is time consuming. I would venture to say that most of the people on this board spend 5 to 10 hours a day researching-charting-reading sec filings-going over financials—reading news releases—communicating with other traders on strategies—then finally buying—then the same process begins for the exit. It may not seem like it right now but I am trying to help you. As will others. Sugarcoating the facts will not help you. You need a good dose of reality and I just gave it to you!! I.e. reality incorporated....
The only consolation that I can give you is: I have been in your shoes. After over 20 years of dealing with the market I still was not prepared for the depth of day trading. I learn new things everyday and make mistakes everyday. After 4 years of making at least 5 trades a day I am a newbie just like you. It is a process. Welcome to day trading and good luck with your choices. Reality incorporated Establish a set of trading rules that work for you. These are my rules. You have a adapt your own. Maybe this will give you some guidelines to go by.
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MY PENNY STOCK RULES:
1. I never buy on impulse or get emotionally attached to a penny stock—think LOGIC—I buy it, I sell it, I make money and I rarely look back.
2. I never buy a stock JUST because I like it or worse someone else likes it.
3. I rarely buy a micro penny stock trading under a volume of 50,000 mil—80 to 100 mil is better (always remember there has to be buyer for every stock you buy)...
4. I rarely hold a micro penny stock over night.... My definition of micro penny is under .10 cents ...Rarely over a weekend...NOTICE I SAID RARELY. THERE ARE SOME STOCKS THAT HAVE A BUILD UP AND IF THE VOLUME IS GOOD AND I FEEL CONFIDENT ABOUT MY DD I WILL HOLD IT FOR THE RUN. At $7.00 to $10.00 a trade I can buy and sell it every day on news or hype or earning whatever. .(THAT'S WHY IT'S CALLED DAY TRADING)
5. I never buy a penny stock on the way up. IE CHASING I watch the pre market trading and set a buy price and a sell price and stick to it (missed out on NEOM by sticking to my rules—I noticed it at .11 and refused to buy to high) UPSIDE IS I DO NOT HOLD 500,000 SHARES OF NEOM AT.43 CENTS—-DOWNSIDE I DID NOT MAKE 50,000 DOLLARS. I DID MAKE A COUPLE OF GRAND BY PLAYING THE GAP AFTER THE RUN. IF YOU MISS THE RUN PLAY THE GAP. LIKE THE MAN SAID—THERE IS ANOTHER STOCK JUST WAITING TO BE BOUGHT.
6. I never think about GETTING RICH OR RETIRING on penny stocks...My goal is to make $200.00 a day and not lose my original investment. Most often I exceed my goal. (When I lose money it is usually because I have not followed my own rules)
7. I never ride a stock down—I will sell it and re-buy it. EXAMPLE: BOUGHT CTKH AT .002 AND .0022. SOLD HALF AT .0046. SOLD HALF OF THAT HALF AT .0069. IT STARTED GOING DOWN AND I BAILED OUT AT .006. BOUGHT AGAIN TODAY AT .0032. LOGIC-DO YOU ACTUALLY BELIEVE MUTUAL FUND MANAGERS WOULD HAVE HELD ONTO IBM IF IT DROPPED 50%?????—(WELL SOME WOULD) LOL I THINK NOT...RIDING A STOCK DOWN IS LIKE THROWING 50% OF YOUR MONEY OUT OF A CAR WINDOW AT 75 MILES AN HOUR AND HOPING IT FLIES BACK TO YOU. OR BETTER YET "IF YOU LOVE IT LET IT GO—IF IT LOVES YOU IT WILL COME BACK TO YOU". THAT’S BULL****—IF IT LOVED YOU IN THE FIRST PLACE IT NEVER WOULD HAVE LEFT... I have actually bought and sold the same stock 3 times in one day. ATNG WAS A RECENT 3 TIME BUY AND SELL. BOUGHT AND SOLD IBZT 3 TIMES ONE DAY. (not usually but it does happen).
8. I never insult or bash another fellow trader...I respect other people's trading methods. I LEARN FROM THEM. What the hell—It's not my money.... ( It's not like they are setting on third base at a black jack table and take a hit on 15 and the dealer has a 6 showing and I have $500.00 dollars riding on that hand). I DO LISTEN AND LEARN AND BENEFIT FROM THEM.
9. I never trade with MONEY that I am not willing to lose.
10. I follow the market and market trends (not just the stocks)
11. I never buy a stock without reviewing, analyzing and understanding the charts. I learned how to read charts and believe in them....They do not lie...I MAY NOT KNOW WHAT THEY MAKE OR PRODUCE OR SELL WHEN I BUY IT BUT I DO REVIEW THE CHARTS ON THE FLY AND PUT IN A BUY ORDER FOR SMALL AMOUNT TO GET IN THE DOOR. MOST TRADERS KNOW WHEN A RUN IS COMING AND HAVE ALREADY DONE THE DUE.
12. I never get gambling and investing confused. I INVEST IN REAL ESTATE.... MY BUSINESS....SMALL, MEDIUM AND LARGE CAP STOCKS WITH A HISTORY-MANAGEMENT TEAM-FINANCIALS—ASSETS—CASH—ETC...30 YEARS+ GROWTH AND INCOME MUTUAL FUNDS WITH 12% OVERALL GAIN IN GOOD AND BAD TIMES (THEY ARE PROFESSIONALS AND THAT IS THEIR JOB). I GAMBLE WITH PENNIES... MY DEFINITION OF PENNIES IS ANYTHING UNDER $5.00.
13. I always take 50% of earning from each week and e-transfer into INTEREST BEARING TAX account. THEN I LEARNED HOW TO INVEST THAT MONEY IN REAL ESTATE TO MINIMIZE TAXES. INCORPORATE, PROTECT AND SHELTER.
14. I ALWAYS TAKE MY ORIGINAL INVESTMENT OUT OF THE EQUATION WHEN IT IS FEASIBLE TO MAKE ENOUGH MONEY ON THE TRADE TO MAKE IT WORTHWHILE .IE...WHEN THE STOCK IS ON A RUN UP SELL PORTIONS AT TIME TO RECOUP ORIGINAL INVESTMENT. IF IT IS A STOCK I PLAN TO KEEP LIKE TFSM—I BOUGHT AT 1.06. AT 2.12 I WILL SELL HALF AND RECOUP INVESTMENT AND KEEP 5000 SHARES FOR FREE. HOPEFULLY THAT WILL BE THIS WEEK.
15. I ALWAYS HAVE FUN.........ACTUALLY I HAVE A BLAST....
16. I LEARN SOMETHING NEW EVERYDAY....
17. I CAN'T SPELL, TYPE WELL OR USE PROPER GRAMMAR—AND I SWEAR LIKE A SAILOR...BUT IF YOU PUT A DOLLAR SIGN IN FRONT OF IT—-I WILL FIGURE IT OUT..........THAT CERTAINLY DOES NOT MAKE ME STUPID...IT MAKES ME SMART BY RECOGNIZING MY LIMITATIONS. LEARN YOURS.
18. I ALWAYS MAKE MY OWN DECISIONS AND TAKE ALL RESPONSIBILITY FOR MY ACTIONS.
19. I LAUGH EVERYDAY...MOSTLY AT MYSELF AND SOMETIMES AT OTHERS....
20. LAST AND MOST IMPORTANT—THE MARKET HAS A RHYTHM—EACH STOCK HAS A RHYTHM—LIKE GREAT SEX—A RHYTHM...FIGURE OUT YOUR OWN RHYTHM WITH THE MARKET AND DUE YOUR OWN DD... LEARN THE RHYTHM OF THE CHARTS. IT IS CALLED "HARD WORK". THE REST WILL FOLLOW. TAKE THE TIME TO PASS ON YOUR GOOD FORTUNE TO OTHERS. WHAT GOES AROUND COMES AROUND AND YOU CAN TAKE THAT TO THE BANK.
-- realityinc21/Diana
***
Some other reliable gurus I've run across at Allstocks.com’s Bulletin Board are FatherOfTwo and QuestSolver, but there are a lot of talented folks on this forum and on other sites online. No matter how highly or lowly rated anyone is, however, your best bet is to track their advice for a while -- and look at their old recommendations -- to see how often they're right and wrong.
Once you've found someone who can find the winners, also think about whether or not their advice and trading style fit your needs and your own style and attitude. This vetting process will help you figure out whose picks you should follow in the future, which in turn will speed up your own ability to make money on the fly. -- L.B.
The following is taken from a post by the mighty Ric at "So how do I make money then?," a recent discussion thread at Allstocks.com’s Bulletin Board.
PRICE IS CONTROLLED BY THE PSYCHOLOGICAL TRAPPINGS OF THE MARKET.
By realityinc21/Diana
Stage 1 - Accumulation. Stock is quiet, trading sideways and without a lot of volatility. Most everyone ignores the stock because it has no sizzle. Insiders hold large blocks of stock and quietly gear up for the distribution.
Stage 2 - Breakout. Volume jumps up, psychological barriers are broken. Insiders begin to tell their friends of upcoming significant fundamental change. Pros take notice and buy the stock on the coat tails of the well informed. The public ignores it because they have not read about the company in the paper yet. It must be a scam.
Stage 3 - Uptrend. As a larger audience learns of the company and its promise, more buying comes in to the stock and it begins to climb. Pros begin to sell, but slowly. Average investor begins to buy.
Stage 4 - Pullback. The stock has gone up too fast, and some profit taking arrives. The jumpy investor who got the entry timing right but lacks confidence in his or her decision sells the stock with a small profit, and smiles in the mirror. The Pro holds on, Average Investor looks through the newspaper to find justification for ownership of the shares.
Stage 5 - Resumption of the Uptrend. The pull back is short lived, and the stock bounces and continues higher. The wannabe regrets the sell, but provides self counsel on the merit of making a profit, albeit a small one. The Pro might sell a little bit more, but still holds the majority of the original position. The Average Investor is getting excited now, and thinks about what could have been if only he had bought when he first noticed the stock.
Stage 6 - Exhaustion of the Uptrend. The media takes notice, and communicates the company's merits to the masses. The masses buy the stock, and it goes up sharply with strong volume. The Pros sell with enthusiasm. The Average Investor owns it now, and is telling everyone who will listen. The wannabe Pro jumps back on, after all, he was smart enough to buy it when the trend started, so he knows the stock well. Will hope make it go higher?
Stage 7 - Gravity Works. Pro selling begins to weigh on the uptrend, and the stock fails to go higher despite high volumes. The stock starts to go down instead of up, and the Pro is almost sold out. The Average Investor continues to cheer lead, hoping to rally support. The wannabe ignores what the market is telling him, taking a loss is too painful to consider. The company is featured on the cover of a magazine.
Stage 8 - The Second Guess. The stock bounces and starts to go back up. The wannabe Pro averages down while the Average Investor gets back to advising friends of his stock picking acumen. Pros sell their remaining holdings and begin to look for another deal to play, or perhaps start short selling the stock.
Stage 9 - Out of Gas. The bounce is a fake out, and the stock moves lower again. The public owns this stock, and they have no more power to buy. The Pro are making money on the short sales now, but are despised by the masses. The Average Investor makes calls for short selling to be made illegal—after all, the short sellers are the demons causing the sell off.
Stage 10 - Dead Cat Bounce. The Average Investor and the wannabe Pro have no pain tolerance left, and finally sell for a big loss. The short selling Pros are the only buyers to take the share off their hands, and provide the needed liquidity. The stock bounces, and some short-term traders make a quick profit. The Average Investor either swears to never buy a stock again, or tells lively stories over drinks about the one that could have been.
Stage 11 - Post Mortem. Pros have forgot about the stock and are considering carpet samples for their new home in Florida. Average Investor continues to follow the company and buys loads of cheap stock to try and overcome the regrettable loss.
The stock market is mean. You can be a good analyst, but if you can't overcome the psychological traps of trading, you will do what the crowd does. To be successful, you have be one step ahead of the crowd, and trade with unemotional discipline. There are strategies to take advantage of each stage of the market cycle that can be applied just by looking at a stock chart. They just require a bit of knowledge.
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Everyday for the next 30 days, read this 10 times a day.
Ask yourself 10 times a day "what kind of trader am I going to be??" Am I going to be a crying whining little bitch or am I going to shake it off?? Am I going to buy to high because I do not know how to read a chart or am I going to f**cking learn how to read a chart?? Am I going to be the entertainment for this board or am I going to go the library and check out all the books that I can read on day trading and investing and stock charting. Am I going to learn how to do my own due diligence or am I going to buy on the recommendation of people from this board?? (It is pretty obvious that is what happened) they were great recommendations but you were about 5 steps behind. It looks like by the time you were buying everyone else was selling. Am I going to take this laying down or am I going to get my Goddamn money back. No one can make those choices for you!!
May seem like I am being a cold hearted bitch but this the real world baby. The question you have to address right this minute is… am I going learn on the fly or am I going to back it up and learn about what the f**ck I am doing?? You dove in headfirst now you have to learn how to swim. If you are not willing to learn how to swim—bail and take your loss. Day trading is time consuming. I would venture to say that most of the people on this board spend 5 to 10 hours a day researching-charting-reading sec filings-going over financials—reading news releases—communicating with other traders on strategies—then finally buying—then the same process begins for the exit. It may not seem like it right now but I am trying to help you. As will others. Sugarcoating the facts will not help you. You need a good dose of reality and I just gave it to you!! I.e. reality incorporated....
The only consolation that I can give you is: I have been in your shoes. After over 20 years of dealing with the market I still was not prepared for the depth of day trading. I learn new things everyday and make mistakes everyday. After 4 years of making at least 5 trades a day I am a newbie just like you. It is a process. Welcome to day trading and good luck with your choices. Reality incorporated Establish a set of trading rules that work for you. These are my rules. You have a adapt your own. Maybe this will give you some guidelines to go by.
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MY PENNY STOCK RULES:
1. I never buy on impulse or get emotionally attached to a penny stock—think LOGIC—I buy it, I sell it, I make money and I rarely look back.
2. I never buy a stock JUST because I like it or worse someone else likes it.
3. I rarely buy a micro penny stock trading under a volume of 50,000 mil—80 to 100 mil is better (always remember there has to be buyer for every stock you buy)...
4. I rarely hold a micro penny stock over night.... My definition of micro penny is under .10 cents ...Rarely over a weekend...NOTICE I SAID RARELY. THERE ARE SOME STOCKS THAT HAVE A BUILD UP AND IF THE VOLUME IS GOOD AND I FEEL CONFIDENT ABOUT MY DD I WILL HOLD IT FOR THE RUN. At $7.00 to $10.00 a trade I can buy and sell it every day on news or hype or earning whatever. .(THAT'S WHY IT'S CALLED DAY TRADING)
5. I never buy a penny stock on the way up. IE CHASING I watch the pre market trading and set a buy price and a sell price and stick to it (missed out on NEOM by sticking to my rules—I noticed it at .11 and refused to buy to high) UPSIDE IS I DO NOT HOLD 500,000 SHARES OF NEOM AT.43 CENTS—-DOWNSIDE I DID NOT MAKE 50,000 DOLLARS. I DID MAKE A COUPLE OF GRAND BY PLAYING THE GAP AFTER THE RUN. IF YOU MISS THE RUN PLAY THE GAP. LIKE THE MAN SAID—THERE IS ANOTHER STOCK JUST WAITING TO BE BOUGHT.
6. I never think about GETTING RICH OR RETIRING on penny stocks...My goal is to make $200.00 a day and not lose my original investment. Most often I exceed my goal. (When I lose money it is usually because I have not followed my own rules)
7. I never ride a stock down—I will sell it and re-buy it. EXAMPLE: BOUGHT CTKH AT .002 AND .0022. SOLD HALF AT .0046. SOLD HALF OF THAT HALF AT .0069. IT STARTED GOING DOWN AND I BAILED OUT AT .006. BOUGHT AGAIN TODAY AT .0032. LOGIC-DO YOU ACTUALLY BELIEVE MUTUAL FUND MANAGERS WOULD HAVE HELD ONTO IBM IF IT DROPPED 50%?????—(WELL SOME WOULD) LOL I THINK NOT...RIDING A STOCK DOWN IS LIKE THROWING 50% OF YOUR MONEY OUT OF A CAR WINDOW AT 75 MILES AN HOUR AND HOPING IT FLIES BACK TO YOU. OR BETTER YET "IF YOU LOVE IT LET IT GO—IF IT LOVES YOU IT WILL COME BACK TO YOU". THAT’S BULL****—IF IT LOVED YOU IN THE FIRST PLACE IT NEVER WOULD HAVE LEFT... I have actually bought and sold the same stock 3 times in one day. ATNG WAS A RECENT 3 TIME BUY AND SELL. BOUGHT AND SOLD IBZT 3 TIMES ONE DAY. (not usually but it does happen).
8. I never insult or bash another fellow trader...I respect other people's trading methods. I LEARN FROM THEM. What the hell—It's not my money.... ( It's not like they are setting on third base at a black jack table and take a hit on 15 and the dealer has a 6 showing and I have $500.00 dollars riding on that hand). I DO LISTEN AND LEARN AND BENEFIT FROM THEM.
9. I never trade with MONEY that I am not willing to lose.
10. I follow the market and market trends (not just the stocks)
11. I never buy a stock without reviewing, analyzing and understanding the charts. I learned how to read charts and believe in them....They do not lie...I MAY NOT KNOW WHAT THEY MAKE OR PRODUCE OR SELL WHEN I BUY IT BUT I DO REVIEW THE CHARTS ON THE FLY AND PUT IN A BUY ORDER FOR SMALL AMOUNT TO GET IN THE DOOR. MOST TRADERS KNOW WHEN A RUN IS COMING AND HAVE ALREADY DONE THE DUE.
12. I never get gambling and investing confused. I INVEST IN REAL ESTATE.... MY BUSINESS....SMALL, MEDIUM AND LARGE CAP STOCKS WITH A HISTORY-MANAGEMENT TEAM-FINANCIALS—ASSETS—CASH—ETC...30 YEARS+ GROWTH AND INCOME MUTUAL FUNDS WITH 12% OVERALL GAIN IN GOOD AND BAD TIMES (THEY ARE PROFESSIONALS AND THAT IS THEIR JOB). I GAMBLE WITH PENNIES... MY DEFINITION OF PENNIES IS ANYTHING UNDER $5.00.
13. I always take 50% of earning from each week and e-transfer into INTEREST BEARING TAX account. THEN I LEARNED HOW TO INVEST THAT MONEY IN REAL ESTATE TO MINIMIZE TAXES. INCORPORATE, PROTECT AND SHELTER.
14. I ALWAYS TAKE MY ORIGINAL INVESTMENT OUT OF THE EQUATION WHEN IT IS FEASIBLE TO MAKE ENOUGH MONEY ON THE TRADE TO MAKE IT WORTHWHILE .IE...WHEN THE STOCK IS ON A RUN UP SELL PORTIONS AT TIME TO RECOUP ORIGINAL INVESTMENT. IF IT IS A STOCK I PLAN TO KEEP LIKE TFSM—I BOUGHT AT 1.06. AT 2.12 I WILL SELL HALF AND RECOUP INVESTMENT AND KEEP 5000 SHARES FOR FREE. HOPEFULLY THAT WILL BE THIS WEEK.
15. I ALWAYS HAVE FUN.........ACTUALLY I HAVE A BLAST....
16. I LEARN SOMETHING NEW EVERYDAY....
17. I CAN'T SPELL, TYPE WELL OR USE PROPER GRAMMAR—AND I SWEAR LIKE A SAILOR...BUT IF YOU PUT A DOLLAR SIGN IN FRONT OF IT—-I WILL FIGURE IT OUT..........THAT CERTAINLY DOES NOT MAKE ME STUPID...IT MAKES ME SMART BY RECOGNIZING MY LIMITATIONS. LEARN YOURS.
18. I ALWAYS MAKE MY OWN DECISIONS AND TAKE ALL RESPONSIBILITY FOR MY ACTIONS.
19. I LAUGH EVERYDAY...MOSTLY AT MYSELF AND SOMETIMES AT OTHERS....
20. LAST AND MOST IMPORTANT—THE MARKET HAS A RHYTHM—EACH STOCK HAS A RHYTHM—LIKE GREAT SEX—A RHYTHM...FIGURE OUT YOUR OWN RHYTHM WITH THE MARKET AND DUE YOUR OWN DD... LEARN THE RHYTHM OF THE CHARTS. IT IS CALLED "HARD WORK". THE REST WILL FOLLOW. TAKE THE TIME TO PASS ON YOUR GOOD FORTUNE TO OTHERS. WHAT GOES AROUND COMES AROUND AND YOU CAN TAKE THAT TO THE BANK.
-- realityinc21/Diana
***
Some other reliable gurus I've run across at Allstocks.com’s Bulletin Board are FatherOfTwo and QuestSolver, but there are a lot of talented folks on this forum and on other sites online. No matter how highly or lowly rated anyone is, however, your best bet is to track their advice for a while -- and look at their old recommendations -- to see how often they're right and wrong.
Once you've found someone who can find the winners, also think about whether or not their advice and trading style fit your needs and your own style and attitude. This vetting process will help you figure out whose picks you should follow in the future, which in turn will speed up your own ability to make money on the fly. -- L.B.
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