I'm still very new to trading penny stocks and have found myself in a bit of a slump ever since I got caught up in the JPHC disaster. Any advice on how best to DD and make smarter plays - I'm not looking to pick the next 1000% gainer..just trying to figure out what i can do differently to improve my trading. I feel like there are quite a few newbies in my same position. Thanks for anyone who can help.
Lib
Posted by Mr. Berbician Seventy Seven on :
Begin with a winner, for sure. That way you'll feel confident for the next one, and so on. Click on Allboards, then search, make a search on "CBAY" over the last 15 days. Do your DD, which means search for information on that company, on what they did over the past 2 years actually, and see figures. Understand that current figures are VERY bad, on one hand, but on the other hand, that this is perfectly NORMAL, since CBAY is a starter. However bad figures of today is the result of very smart investments: read SanDiego journal, see properties they have, look at the prices they sell it, and imagine what will be their next figures. See that they'll have 40 people working there by the end of next week. See that they just acquired another company. Now see the chart, imagine that this is the bottom. Come back the next day on the same chart. You get it.
Posted by The Owl on :
There is no certainty - specially on OTC! so take care.
Make sure you know your 'mental' stop loss before entering a trade, and only trade what you can afford to loose.
Nothing wrong with taking losses as long as YOU choose what they are!
Be very careful, and keep trade no's low. You must have a strategy so get hold of some books to help. E.g to time a stock you need a weekly one year chart, a 50 & 200 MA, and need to know how to tell if 'oversold', or breakout situation. Also need volume.
When you enter, scale in. I.e. you want 5000 shares, so go for 2000, then 2000 then 1000. - gives you 3 chances to get in. If you buy 5000 all at once and it doesn't go your way, you'll be tempted to buy another 5000 to cost average - now you're immediately in trouble as it's twice your position size! What if that doesn't go your way either???
I'm in one OTC stock only PMHH (Oil services), and have a thread running here. Even then, I have a wide stop-loss e.g. if you buy at 50c you must be able to have a 30c or so loss on an OTC stock, otherwise don't enter.
Hoep this helps. Go easy and build gradually, the aim is survival as this is NOT easy.
Posted by The Owl on :
I'd say how do you know when there is a bottom, or top for that matter. Let the market tell you when a breakout is occuring, otherwise guess-work. If you can see a bottom, so can everyone else - so what happens if they're all wrong, well everyone piles out together - taking it lower.
There is no certainty - specially on OTC! so take care.
Make sure you know your 'mental' stop loss before entering a trade, and only trade what you can afford to loose.
Nothing wrong with taking losses as long as YOU choose what they are!
Be very careful, and keep trade no's low. You must have a strategy so get hold of some books to help. E.g to time a stock you need a weekly one year chart, a 50 & 200 MA, and need to know how to tell if 'oversold', or breakout situation. Also need volume.
When you enter, scale in. I.e. you want 5000 shares, so go for 2000, then 2000 then 1000. - gives you 3 chances to get in. If you buy 5000 all at once and it doesn't go your way, you'll be tempted to buy another 5000 to cost average - now you're immediately in trouble as it's twice your position size! What if that doesn't go your way either???
I'm in one OTC stock only PMHH (Oil services), and have a thread running here. Even then, I have a wide stop-loss e.g. if you buy at 50c you must be able to have a 30c or so loss on an OTC stock, otherwise don't enter.
Hope this helps. Go easy and build gradually, the aim is survival as this is NOT easy.
Posted by toomuch1 on :
stay out of pinkies if you are a new penny trader....lot of $$ to make but much more to loose!
JMO by the way....good luck!
Posted by Repoman75 on :
Buy FRPT, and forget all nightmares by EOY.
Posted by GreenBaronZ on :
never buy on emotions... never be tempted to buy a stock because someone told you to.
just for practice, pretend you are buying a stock that you like. Follow the message board for it and listen to what the people have to say. I say do this for a week. Most of the time, the stock will be coming down. THen be happy that you actually didnt buy it. That's how you save money!!!
most importantly of all, get a margins account!!! you will definitely not survive in the penny market if you have to wait 3 days for your buys and sells to settle! And dont be greedy.
Posted by Doniboy on :
When you ask for advice and people instead pump their stocks...Ignore them. Look for a slow gainer and you learn a lot from it. I learned a ton by trading RSHN and even more trading NDOL. I have been in a slump since then, but I learn from my mistakes. Never chase a runner, never be afraid to cut your losses, never be afraid to take profits, and never ever trade with money you cannot afford to lose. Good luck.
Posted by daytrader1 on :
daniboy..hit the nail right on the head.
Posted by Skyman on :
Ignore everybody. Make your own system.
Posted by jakeo on :
Watch the news releases. www.stockhouse.com look for aquistion news, and contract deals with big numbers. Post it and if its big enough to get noticed, you'll have your gainer right there.
Posted by imakmony2005 on :
ROB banks its easyer.lol
Posted by TickTrader on :
Hey lib, best thing to do is...
1. Find a company YOU like. Take your time, be thorough.
2. Follow Skyman's advice.
If you go with a company because it is on a message board or touted in an email, then you will either lose money or be too late for good short-term gains.
There are some good people at allstocks that post great leads for others, no names (will, JimSC, others you will learn). If you don't have time to research before buying, then don't buy. Great leads don't require you to jump in first, learn later.
All IMO and GL!
Oh, yeah... JPHC disaster defies description and you have lots of company. Funny, if today's APOA press release is any indication, the merger may be a no-go. They were set for both ways from the start.
[ May 11, 2006, 22:21: Message edited by: TickTrader ]
Posted by imakmony2005 on :
i still say banks,lol
Posted by J_U_ICE on :
paper trade for a while scottrade has a demo that you can use to practice so you get the feel of it. Don't just jump in without first learning the "ropes". You can't go skydiving without lessons and trading penny stocks without knowledge is like skydiving without a parachute
Posted by cactus33 on :
quote:Originally posted by Skyman: Ignore everybody. Make your own system.
that's good advice...
Posted by Moneymaker46 on :
What is the rules of day trading?? I dont have a margin acount or 25,000 in equity... Can I still day trade 3 days out of the week legally?? Somebody HELP!!!Thanks
Posted by cougarfeather on :
Especially don't listen to people who tell you to buy a certain stock in the same thread when you ask for advice on trading penny stocks.
Always make your own decisions, do not let others dictate your actions.
Take everything with a grain of salt. Remember that for every positive post there is a person holding the stock who wants it to go up so they can sell. Always remember that when considering what others say.
Read as much as you can....
I am still learning each day, I think everyone is.
Posted by Mu Meson on :
avoid all pinks and live happy
Posted by Moneymaker46 on :
Good point Couger, but can somebody answer my question please??
Posted by cactus33 on :
quote:Originally posted by Moneymaker46: What is the rules of day trading?? I dont have a margin acount or 25,000 in equity... Can I still day trade 3 days out of the week legally?? Somebody HELP!!!Thanks
no... dont daytrade that much, or you'll risk being flagged.. call your broker for advice. dont mess around or they may freeze your account
Posted by Moneymaker46 on :
thanks cactus....
Posted by BuyTex on :
quote:Originally posted by Moneymaker46: What is the rules of day trading?? I dont have a margin acount or 25,000 in equity... Can I still day trade 3 days out of the week legally?? Somebody HELP!!!Thanks
You get three "round-trips" per rolling five days. That's not a week...in other words, your five days starts from the first round-trip. If that's on a Thursday, the interevening weekend means nothing. You can use them all in one day, or you can spread them out. Keep track carefully. Alternatives: second account; trade only three days a week; find good picks at the end of the day, planning sale the next day...
Posted by Moneymaker46 on :
thanks cactus....
Posted by Moneymaker46 on :
So if you buy some shares at the end of say on Tuesday and then sale them Wednesday morning that doesnt count as a roundtrip??
Posted by imakmony2005 on :
STAY IN SCHOOL
Posted by undefined on :
Here's my advice, for what little it is worth:
1. Don't chase a run, they are always faster than you.
2. If it is running, you've already missed the boat.
3. IF you make the mistake of ignoring 1 & 2 because of A) Gut B) Instinct C) Chemical Intoxication follow 4 & 5 closely, they *may* save your behind.
4. Set a limit on your losses. Can you live with 30 - 50% loss in one day. Before you think about how much money you will make if a stock goes to x or y, determine how low it can dip before you bail and try something else.
5. Never throw good money after bad. If you buy and it tanks, cut your losses and move on. If it becomes a good buy down the road, chances are it went down further and you can buy in cheaper.
6. Set an acceptable profit and live with it. If you buy a stock and happen to get in before or at the early stage of a run, don't expect 200% - 2000%. Pick a price point and unload your shares, or at least some of them to lock in your profits. Yes, this may piss off other traders, but you need to watch your own back. If a stock goes up 20% in a day you should be drinking a nice glass of wine that evening to celebrate, not hitting your head against the keyboard because you held for 25% and it ended up closing down 10%.
7. Never become emotional about a position. It does not matter how cool, good, nice, impressive, or any other adjective you can think of a company is - what matters is if YOU are making money. If a PR comes out that is all good and the position doesn't move up, there may be something wrong.
8. If you want to gamble, play with free shares. If you bought a position and it doubled, take your original principal out and go play it on a new position. Let the "free shares" (the half you did not sell) ride for free if you feel the position will continue to rise (or fall, if you shorted).
9. DO NOT INVEST MORE THAN YOU ARE WILLING TO LOSE. IF YOU CANNOT LIVE WITH A 99% LOSS GO FIND A STABLE MONEY MARKET FUND.
Oh, and before you spend any significant real money, establish a list of rules and criteria you will make your trades based on and make sure your family, SO, or other governing household bodies are onboard with your decision to day trade.
Good Luck!
Posted by MoMoMoney on :
quote:Originally posted by Moneymaker46: So if you buy some shares at the end of say on Tuesday and then sale them Wednesday morning that doesnt count as a roundtrip??
The way i understand it is if you have less than 2000, you cant apply for a margins account. Therefore you must let your buys and sells settle for at least 3 days before you can sell your buys and buy another stock.
If you have 2000 in your account, you can apply for a margins account, which lets you buy and sell the same stock at most 3 times a week. Say I buy NDOL on the low on Tuesday and sell high on the same day. Say I do that again on Wednesday and Friday. If im right, that's legal for a $2000 margin account.
If however im a heavy day trader, who constantly buys and sells more than 6 times in 5 days, I would need 20 grand in my account for a day trader account.
am i right? can someone correct me?
Posted by BuyTex on :
quote:Originally posted by Moneymaker46: So if you buy some shares at the end of say on Tuesday and then sale them Wednesday morning that doesnt count as a roundtrip??
correct--round-trip is buy/sell in same trading day.
Posted by undefined on :
quote:Originally posted by MoMoMoney:
quote:Originally posted by Moneymaker46: So if you buy some shares at the end of say on Tuesday and then sale them Wednesday morning that doesnt count as a roundtrip??
The way i understand it is if you have less than 2000, you cant apply for a margins account. Therefore you must let your buys and sells settle for at least 3 days before you can sell your buys and buy another stock.
If you have 2000 in your account, you can apply for a margins account, which lets you buy and sell the same stock at most 3 times a week. Say I buy NDOL on the low on Tuesday and sell high on the same day. Say I do that again on Wednesday and Friday. If im right, that's legal for a $2000 margin account.
If however im a heavy day trader, who constantly buys and sells more than 6 times in 5 days, I would need 20 grand in my account for a day trader account.
am i right? can someone correct me?
I believe it is 3 round trips TOTAL, not per stock. So if you flipped NDOL twice in one week you could do one other roundtrip on anything, but no more.
Margin account and >25k is about the only way to do it. If you aren't comfortable with playing the penny's all the way, use the rest for more stable taxable investments (blue chips, mutual funds, you pick).
Posted by imakmony2005 on :
Your funds would have to settle with no margin so you could not do that.momommoney
Posted by BuyTex on :
quote:Originally posted by MoMoMoney:
quote:Originally posted by Moneymaker46: So if you buy some shares at the end of say on Tuesday and then sale them Wednesday morning that doesnt count as a roundtrip??
The way i understand it is if you have less than 2000, you cant apply for a margins account. Therefore you must let your buys and sells settle for at least 3 days before you can sell your buys and buy another stock.
If you have 2000 in your account, you can apply for a margins account, which lets you buy and sell the same stock at most 3 times a week. Say I buy NDOL on the low on Tuesday and sell high on the same day. Say I do that again on Wednesday and Friday. If im right, that's legal for a $2000 margin account.
If however im a heavy day trader, who constantly buys and sells more than 6 times in 5 days, I would need 20 grand in my account for a day trader account.
am i right? can someone correct me?
$25k some brokers require more, as the $25k is minimum.
Posted by imakmony2005 on :
Whats up TEX? Im Just having some fun how about you?
Posted by bomber on :
there correct buy slow gainers at 1st,like cwpc,then take some profits,and buy something more risky like lfwk,then take some profits from that buy more risky like,rshn.
but be careful that if you sell something like lfwk and it blows high up you will regret that big time. you make your money buy holding long.
Posted by imakmony2005 on :
HMM NOT WHAT I WOULD DO BUT HEY IF ITS WORKING.
Posted by BuyTex on :
quote:Originally posted by imakmony2005: Whats up TEX? Im Just having some fun how about you?
just trying to keep things sorted out...peeps get confused re settled funds and roundtrips.
Posted by imakmony2005 on :
NIGHT.
Posted by jazzy1 on :
Ok so it appears Bomber is pumping LFWK >>> Must say he's got a point, i believe Loftworks is going to really move up next week ! IMO Do youre DD .... IPRE is a safe bet toooo!!! Have fun..
Posted by Moneymaker46 on :
What do you mean when you say the level 2's are looking good or they are looking slim... what are level 2's??
Posted by BuyTex on :
When you see the "normal" stuff, the last price, Bid/ask, etc...that's Level I. Level II basically shows the MMs lined up on Bid/Ask, in order...look at some screens at lowtrades or quotetracker. The idea is helps determine bid support, how much a play might run, etc
Posted by MoMoMoney on :
do some brokers give you level 2's for free?
Posted by undefined on :
quote:Originally posted by MoMoMoney: do some brokers give you level 2's for free?
Seldom will you get free l2 for pinks.
Posted by jump'em&pump'em on :
If you trade with E*Trade and have more than 30 trades a quarter they provide L2's free. If no 30 trades it is 29.99 a month.
quote:Originally posted by MoMoMoney: do some brokers give you level 2's for free?
Posted by Prdponce on :
If you have a cash only account as long as you money is settled there is not restriction on round trips not balance minimum in your account ..... You can daytrade all you want...
quote:Originally posted by undefined:
quote:Originally posted by MoMoMoney:
quote:Originally posted by Moneymaker46: So if you buy some shares at the end of say on Tuesday and then sale them Wednesday morning that doesnt count as a roundtrip??
The way i understand it is if you have less than 2000, you cant apply for a margins account. Therefore you must let your buys and sells settle for at least 3 days before you can sell your buys and buy another stock.
If you have 2000 in your account, you can apply for a margins account, which lets you buy and sell the same stock at most 3 times a week. Say I buy NDOL on the low on Tuesday and sell high on the same day. Say I do that again on Wednesday and Friday. If im right, that's legal for a $2000 margin account.
If however im a heavy day trader, who constantly buys and sells more than 6 times in 5 days, I would need 20 grand in my account for a day trader account.
am i right? can someone correct me?
I believe it is 3 round trips TOTAL, not per stock. So if you flipped NDOL twice in one week you could do one other roundtrip on anything, but no more.
Margin account and >25k is about the only way to do it. If you aren't comfortable with playing the penny's all the way, use the rest for more stable taxable investments (blue chips, mutual funds, you pick).
Posted by greenman on :
quote:Originally posted by Prdponce: If you have a cash only account as long as you money is settled there is not restriction on round trips not balance minimum in your account ..... You can daytrade all you want...
[QUOTE]Originally posted by undefined: [qb]
I have one account that is a cash account (lowtrades) and sometimes daytrade it. I think this week I have done 8 or 9 trades. As long as I use settled funds I think I am ok. No flag yet. You can do the same with a margain account as long as you use settled funds.
Posted by Prdponce on :
Same here... With margin you will need to have and maitain the $25 K...
quote:Originally posted by greenman:
quote:Originally posted by Prdponce: If you have a cash only account as long as you money is settled there is not restriction on round trips not balance minimum in your account ..... You can daytrade all you want...
[QUOTE]Originally posted by undefined: [qb]
I have one account that is a cash account (lowtrades) and sometimes daytrade it. I think this week I have done 8 or 9 trades. As long as I use settled funds I think I am ok. No flag yet. You can do the same with a margain account as long as you use settled funds.
Posted by Mr. Berbician Seventy Seven on :
ROFL... If that poor guy just followed my advice (first reply of this thread) he would already get +30%. What a shame to some of you, especially the one who whishes to give lessons... that one should for sure go back to school. Good run CBAY.