Member Rated: posted April 05, 2004 11:56April 05, 2004 11:56 -------------------------------------------------------------------------------- I HAD POSTED SEVERAL MONTHS AGO. MAYBE THIS WILL HELP PEOPLE. DIANA ESTABLISH A SET OF TRADING RULES THAT WORK FOR YOU. THESE ARE MY RULES. YOU HAVE TO COMPILE YOUR OWN. MAYBE THIS WILL GIVE YOU SOME GUIDELINES TO GO BY.
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 DAYTRADING) 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. ie THE DEAD CAT BOUNCE. 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. NOW LOOKING A BUYING AGAIN. 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". THATS 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 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). Remember it is us against them. 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 A COMPANY MAKES OR PRODUCES OR SELLS 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..30YEARS+ 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 $1.00. 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, IRA, TO ELIMINATE PAYING TAXES. INCORPORATE AND PROTECT. 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 A 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 SOLD HALF AND RECOUP INVESTMENT AND KEEP 5000 SHARES FOR FREE. 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. IT IS CALLED DUE DILIGENCE. LEARN THE RHYTHM OF THE CHARTS. 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.
DIANA
-------------------- DIANA Posts: 4447 | From: USA | Registered: Jan 2004
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The stock market is a money machine for a small number of people. Most investors, including mutual fund managers in nice suits, don't beat the stock market. You should accept this fact if you are investing in stocks.
That does not mean there are not lots of people who are making money in stocks. The problem is that they are only doing it from time to time. There are few who consistently do it, the rest are just getting short term loans when they hit a winner. Eventually, most investors give back their gains.
The result is that the average investor, whether they are making their own investment decisions or letting someone else do it for them, is earning what the market earns over the long term. Historically, that is about 7% per year.
Who is making all the money?
For the most part, it is the insiders. The people who start the companies that are the basis for the paper the financial industry calls stock certificates. The game is simple; sell the paper to the investing public, make a lot of loot, buy big houses in Florida.
Admittedly, my cynicism is over the top, but you get the idea. The stock market favors a small group of people who know more than the rest of us. For a long time, I have been telling people that to do well in the stock market, you have to do what the insiders do, but I have come to realize that doing this alone is not enough.
My preaching over the past ten years has focused on using market activity to figure out what the smart money is doing, and then do the same thing. One step behind the smart money, but 10 steps ahead of the public, and most anyone with access to stock charts can do well in the market. I made a lot of money trading stocks because I focused on the stock that are behaving abnormally and traded them well using simple technical analysis.
However, there is more to the game of trading stocks than just good analysis. There are good chart readers and well informed insiders that have the same thing in common; they can not make money in the stock market. Their lack of performance shared the same reason.
They don't have their head screwed on straight.
Actually, they do have their mental faculties properly aligned, but they are just not set up properly for stock market trading. From the time we are small children we are taught to avoid pain and seek out pleasure. We can all hear our parents warning us to not touch the stove, but to have a good time when we joined our friends. Our upbringing is destructive to our performance in the market. To be successful, we must learn to be behavioral deviants.
To make my point, I outline the life cycle of a stock, and how the successful trader differs from the minion who has the typical psychological responses to the stock market;
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 own 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. Calls for short selling to be made illegal are made by the Average Investor, 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
-------------------- DIANA Posts: 4447 | From: USA | Registered: Jan 2004
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posted
btw, watching your moves on tnog helped me get going. Thanks--don't know whether I've mentioned that before or not, but I appreciate you and your good posts...
posted
Remember the internet bubble of just a few years ago? So much money was made and lost in that period. Best of times, worst of times.
Posts: 5729 | From: Wisconsin | Registered: Sep 2003
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Train, I'm not disagreeing with you that money can be made now but it's damn hard work. You seem to be able to devote the bulk of your day to it and that's what you have to do now in order to succeed. Back a few years ago it was easy and didn't require the time commitment of todays market.
Posts: 5729 | From: Wisconsin | Registered: Sep 2003
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posted
i quit my job to do this chit.......so i take it pretty serious.......but i like to have fun at the same time.....wouldn't give it up for nothin'
-------------------- "IT'S NOT LUCK IT'S DAYTRADIN'"
"HERE'S MY 2 CENT'S, SEE IF YA CAN TURN IT INTO A BUCK" Posts: 5641 | From: Florida | Registered: Sep 2004
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no need to admire.......just put in the time, the goal is to minimize losses and maximize gain's.......all day'z won't be green but hopefully most of um are ......
-------------------- "IT'S NOT LUCK IT'S DAYTRADIN'"
"HERE'S MY 2 CENT'S, SEE IF YA CAN TURN IT INTO A BUCK" Posts: 5641 | From: Florida | Registered: Sep 2004
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That's just it though, putting in the time. To succeed nowadays you've gotta do what you're doing, make it a full time job. So many people come and go here, throwing in a couple hundred bucks thinking they'll be rich and it just doesn't work that way. It's gotta be viewed as a job.
Posts: 5729 | From: Wisconsin | Registered: Sep 2003
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i agree, i try to go in each trade with atleast a grand...that way even a 10% to 20% gain add's up quick .....if i make $300 a day im happy....but usually atleast one day outta the week i'll pull close to a grand if not more, not every week but it's been good to me as of late.
-------------------- "IT'S NOT LUCK IT'S DAYTRADIN'"
"HERE'S MY 2 CENT'S, SEE IF YA CAN TURN IT INTO A BUCK" Posts: 5641 | From: Florida | Registered: Sep 2004
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quote:Originally posted by realityinc21: It's more than a full time job. At least 10hrs a day and sometimes more.
I usually talk to the CEO--Tranfer Agent yada yada. Get first hand info. Spend hours reading sec filings etc. You all know the deal..
It's not for everyone.
It's nice to see you back crazy lady I often wonder if you are still swinging.
-------------------- Be Careful Of The Toes We Step On Today, They Could Be Attached To The Butt We Have To Kiss Tomorrow Posts: 4727 | From: Elk Grove ( Sacramento )CA USA | Registered: Jun 2004
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Yep I think that everyone gave up on QBID a long time ago, of course for everyone who leaves there are 2-3 more believers. I am not sure if Lil is still holding any as she does post on the thread sometimes. Just not the same on that thread with all the regulars gone
-------------------- Be Careful Of The Toes We Step On Today, They Could Be Attached To The Butt We Have To Kiss Tomorrow Posts: 4727 | From: Elk Grove ( Sacramento )CA USA | Registered: Jun 2004
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WOW--I just read thru a couple of threads. I am not sure if there will ever be the good old days again....
Doc--we were always nice to each other...lol
We knew who each other was...lol
Now it is a crapshoot. who is who???
I just try to read the chart and trade. Make my little 10% to 30% and Bail. Sometimes I jump in and out and make 0%. Just glad I got out with just the fee's. lol
I still get tips from the message boards. That is what they are for. Most of the time--I just see the symbol. No time to read the thread... Do my own DUE and take a lickin and keep on tickin. lol
FYI--have been trading GTRD for a few days. Started at .04 on TUES.and closed at .010 plus on FRIDAY. It has been gapping up everyday. I will take .02 a day--anyday....
Good to see ya posting...
Posts: 4447 | From: USA | Registered: Jan 2004
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posted
Yea been making a few bucks here and there, playing PLNI lately, but holding a core position in the event that it runs soon. As for QBID I am still holding, some of the old gang are still in on the "Q" but others come and go. Those who try to swing it only stay for a short while, it seems like I have been holding this so long if I let it go it would be like loosing a leg Always keeping in mind to never invest more that I can afford to loose.
-------------------- Be Careful Of The Toes We Step On Today, They Could Be Attached To The Butt We Have To Kiss Tomorrow Posts: 4727 | From: Elk Grove ( Sacramento )CA USA | Registered: Jun 2004
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I often wonder if you are still swinging.
