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Penny Stocks
- Thread starter TheCaymanIsland
- Start date
Quote from OTCkrak:
from my nickname... i do trade the OTC market and the truth is that alot of experience traders are missing out on alot of action
If you have been sucessful in your trading perhaps you could shed some light on the approach that you use.
Is it more TA or FA or a combination of both? Or do you follow some of the promoters like Mark Schultz, Michael Cohen, etc?
What filter criteria do you use? Do you use Stockfetcher, stockweb or something similar? Enlighten us as to what has been the most successful approach thus far
I have a question on t/a in otc or pinkies.... since so many people paint the tape in those markets and the rules allow those dealers to trade with each other for a wash, basically putting up trades at prices all over the place to make it appear as if there is real buying or selling going on how does t/a help in those cases?
the idea with penny stocks and when i say penny stocks im talking about all otc and pink issues under $1.00 ...
Etrade is a technical "pennystock" as it is but for the purposes of understanding how to consistently profit in this market you have to look at the low volume traded issues that are basically POS companies dilluting the hell out of the float with no hopes of ever making a real profit...
every day in the OTC world there is the "IT" stock or the stock that is getting the most volume and most intrest. I suggest you look up every spam email you have ever received and notice that the volume on those stocks around the time before and after you get the email SKY ROCKETS... these stocks really do move...
the amount of equity required to make a stock go from .01 to .02 is suppringly low... hit the ASK with 10 times using $100,000 with market orders and see what happens.. youll have one thousand people holding bags at your doorstep DYING to get out.
back to the "IT" stock of the day.. generally every OTC/pink will have its day.. and i mean a day that for whatever reason the volume surges and a flock of retail money comes swooping in rallying the price share. you want to be in the "it" stock of the day before the day!
RULE #1 dont ever hold a penny stock for more then ~2weeks
my biggest windfall was 800K shares at .015 go to .07 in one day that was the most excilirating experience of my life. $45,000 profit in one day at the age of 19 changed my life. the actual run on the "IT" day was 267% right around a fibonacci level that im sure in hind sight was a pivot point for many traders that day..
obviously that trade was special and i hope to be part of something like that again.... if seen greater percentage increases in one day but never with that much money.
Rule # 2 dont ever trade more then $10,000 in a penny stock for whatever reason.
the idea is that penny stocks are a form of controlled gambling and more controlled then roullette but less controlled then trading naked options. if you have 1,000 to blow i would suggest you play 2-5 poker with 2 buyins at a Casino... but if you must.... OTC is not a bad way to go.
Alot of OTC/pinks trade on some kind of cycle... not exact but i have seen some amazing correlations... like one stock that was like a regressive count down FLY up... crash 5 weeks the FLY.. crash 5 weeks.. the FLY... crash 5 weeks.. FLY crash 5 weeks.... just something to think about....
my advice or strategy is that i keep an elaborate watchlist of OTC/pinks some are in somekind of evolving pattern while other have just been tanking forever. and at the first sign light ill take a postion... for my purposes i trade $500 per lot. I use the charts but often times because the volume is so low.. the charts are meaningless but therer are MAJOR execptions.
RULE # 3 always buy at the BID
if the train is taking off use discretion but you may get killed. you still wanna think about R/R ratios
RULE # 4... DO NOT READ THE PENNY STOCK forums (ihub - hotstockmarket.com)
the whole idea behind those forums is that these people are trading under the clause of the efficient market hypothesis that small firms have too much of a cost in gathering information to be analyzed by the institutions so the "PRESS RELEASE" that is comming out that they know about will make the stock fly...
true.. new releases can make these suckers fly but more often then not the posters are dying to get new money into the stock so they can unload there bag. MAKE your own decisions using the charts and price actions... trading OTC/pinks on news releases is for losers..
too many people are holding bags and are emotionally attached and further more have no f**king clue whats going on... make your own decisions based on the charts and price action.. when the stock is taking off... youll see it on the tape... get in proft and get out... XZYZX is not gonna find the cure for cancer.
Rule #5 trade with the market
BUY with momentum.. dont buy a falling OTC stock EVER EVER
BTW if you want to be signed up on a member list of a group of traders that actually MOVE these stocks
http://www.bloomfieldinvestmentclub.com/pages/public/subscribe
they send out releases that i WATCH sometimes they move... and they have so many people reading this that they literally make the stocks move..BUT BE WARNED they are loading up on these stocks before the word gets out and can unload at any time,.... my guess is that these guys are making a killing but they have a good free service
Etrade is a technical "pennystock" as it is but for the purposes of understanding how to consistently profit in this market you have to look at the low volume traded issues that are basically POS companies dilluting the hell out of the float with no hopes of ever making a real profit...
every day in the OTC world there is the "IT" stock or the stock that is getting the most volume and most intrest. I suggest you look up every spam email you have ever received and notice that the volume on those stocks around the time before and after you get the email SKY ROCKETS... these stocks really do move...
the amount of equity required to make a stock go from .01 to .02 is suppringly low... hit the ASK with 10 times using $100,000 with market orders and see what happens.. youll have one thousand people holding bags at your doorstep DYING to get out.
back to the "IT" stock of the day.. generally every OTC/pink will have its day.. and i mean a day that for whatever reason the volume surges and a flock of retail money comes swooping in rallying the price share. you want to be in the "it" stock of the day before the day!
RULE #1 dont ever hold a penny stock for more then ~2weeks
my biggest windfall was 800K shares at .015 go to .07 in one day that was the most excilirating experience of my life. $45,000 profit in one day at the age of 19 changed my life. the actual run on the "IT" day was 267% right around a fibonacci level that im sure in hind sight was a pivot point for many traders that day..
obviously that trade was special and i hope to be part of something like that again.... if seen greater percentage increases in one day but never with that much money.
Rule # 2 dont ever trade more then $10,000 in a penny stock for whatever reason.
the idea is that penny stocks are a form of controlled gambling and more controlled then roullette but less controlled then trading naked options. if you have 1,000 to blow i would suggest you play 2-5 poker with 2 buyins at a Casino... but if you must.... OTC is not a bad way to go.
Alot of OTC/pinks trade on some kind of cycle... not exact but i have seen some amazing correlations... like one stock that was like a regressive count down FLY up... crash 5 weeks the FLY.. crash 5 weeks.. the FLY... crash 5 weeks.. FLY crash 5 weeks.... just something to think about....
my advice or strategy is that i keep an elaborate watchlist of OTC/pinks some are in somekind of evolving pattern while other have just been tanking forever. and at the first sign light ill take a postion... for my purposes i trade $500 per lot. I use the charts but often times because the volume is so low.. the charts are meaningless but therer are MAJOR execptions.
RULE # 3 always buy at the BID
if the train is taking off use discretion but you may get killed. you still wanna think about R/R ratios
RULE # 4... DO NOT READ THE PENNY STOCK forums (ihub - hotstockmarket.com)
the whole idea behind those forums is that these people are trading under the clause of the efficient market hypothesis that small firms have too much of a cost in gathering information to be analyzed by the institutions so the "PRESS RELEASE" that is comming out that they know about will make the stock fly...
true.. new releases can make these suckers fly but more often then not the posters are dying to get new money into the stock so they can unload there bag. MAKE your own decisions using the charts and price actions... trading OTC/pinks on news releases is for losers..
too many people are holding bags and are emotionally attached and further more have no f**king clue whats going on... make your own decisions based on the charts and price action.. when the stock is taking off... youll see it on the tape... get in proft and get out... XZYZX is not gonna find the cure for cancer.
Rule #5 trade with the market
BUY with momentum.. dont buy a falling OTC stock EVER EVER
BTW if you want to be signed up on a member list of a group of traders that actually MOVE these stocks
http://www.bloomfieldinvestmentclub.com/pages/public/subscribe
they send out releases that i WATCH sometimes they move... and they have so many people reading this that they literally make the stocks move..BUT BE WARNED they are loading up on these stocks before the word gets out and can unload at any time,.... my guess is that these guys are making a killing but they have a good free service
Ask timmy, he has always promoted penny stock trading. thats how he made his millions. but thats how he also lost his hedge fund. i don;t think all stocks under $10 are penny stocks. Is ford a penny stock?
its those companies out there that have a share price of $0.005 or 0.00067 that are really penny stocks. i put a $1000 into one a couple months ago. dont remember the share price but i do remember i held 95,000 shares of it because thats the max i have ever held. it went to $0.67. i was the happiest fucker in town, i mean making 60k a day. i obviously got greedy and decided to wait another day. next morning it had no volume and i was stuck. i thought oh well, why not just wait then, it doesnt matter anyway. nothing happened. got 400 of the 1000 back. but i do believe there is money to be made in those. i personally like stocks that gap up or down. price range $1-$15. usually $5-$6. just scalp those stocks all day. the problem is though most ofthe scalps are on the long side because not enough inventory for shorting. sometimes they do, but often they dont.
its those companies out there that have a share price of $0.005 or 0.00067 that are really penny stocks. i put a $1000 into one a couple months ago. dont remember the share price but i do remember i held 95,000 shares of it because thats the max i have ever held. it went to $0.67. i was the happiest fucker in town, i mean making 60k a day. i obviously got greedy and decided to wait another day. next morning it had no volume and i was stuck. i thought oh well, why not just wait then, it doesnt matter anyway. nothing happened. got 400 of the 1000 back. but i do believe there is money to be made in those. i personally like stocks that gap up or down. price range $1-$15. usually $5-$6. just scalp those stocks all day. the problem is though most ofthe scalps are on the long side because not enough inventory for shorting. sometimes they do, but often they dont.
I appreciate the answers, to be honest I am not really interested in that market from a trading standpoint. I am sure, just like in any market from cars to concrete there are people who make a living moving it around, just not a market I would get involved with.
My original question had to do with t/a which someone mentioned they used on otc and pinkies. I wonder how they use the t/a when the rules allow the dealers to wash trade putting in essentially bogus volume. Anyone can tackle that one?
My original question had to do with t/a which someone mentioned they used on otc and pinkies. I wonder how they use the t/a when the rules allow the dealers to wash trade putting in essentially bogus volume. Anyone can tackle that one?
I only hold one name but we use two brokers, Ameritrade and IB.