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What are the best site, the best books, the most helpful resource you have found be reading stock charts. Things like bid/ask history, MACD, Bollinger Bands, MA, EMA, etc. It seems as though many guys use many resources in their DD work and I assume that many did not go to school for this, it was self taught! Thanks
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Here is some helpful email - although long was very helpful from one of the traders that used to be in here. I hope it helps and best to you in your trading.
This is going to be very long but the best read you'll find on this board!
These are Post's on how to make money in this market by three of the greatest people I have had the pleasure of trading with!
Learn ALL(LOL) of their tips and you'll do fine. And.........Yes, I do make money. My biggest tip?... DON'T HOLD ANY OF THESE PENNYS! Make money and sell....If it goes up more, Good for the other guy holding it, You've made money. MOVE ON!
I updated my dd for all so here it is. I am writing a more detailed things you need to know section and will post when I finish.
Things you need to know
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 is RSI 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.
"Resource from 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
Timing your entry and exit from the market is critical to making money and controlling losses.
These are MM signals. 100 > I need shares 200 > I need shares badly but dont 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.
Pennies are all about volatility and trends. The only reason to look at a 6 month chart or longer is to see the overall trend of the stock. Is it going up, down, or staying the same with little bumps in the road. Look for peaks and valleys and do they happen on a regular basis. If so then look for a bottom and buy then sell at the top and wait for the next valley.
Never let people tell you after a run that it will run again. That rarely happens. Usually after a run it slowly drops back down. Never average down. Sell and buy back at bottom. Holding until bottom never makes you money, it only makes your loses harder to bare.
Longs in a penny stock want you in so they give you the pretty picture. They hope they can get enough new investors to make their stock move and it won't until the stock is ready. Learn to follow trends and how to find the bottom plays. Usually if a stock has more then a couple pages then the stocks has already done something and hope is what keeps the thread going of it moving again.
Be smart, think, learn, and research.
Next our wonderful and lovely Queen of daytrading...Diana! I miss you girl!!!!!and Hello Sunny, If you are still reading!
Realityinc21.
IT'S CONTROLED BY THE PSYCHOLOGICAL TRAPPINGS OF THE 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 Inves
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