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Author Topic: Making money in the Penny Market!
rickpic
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I posted that I had a 900% gain this month and was asked "How did you do that. I'm playing the same stocks you are" Well let me start by saying It wasn't easy!

I'm not going to list all the stocks. Many of them I posted threads on and some I played were posts from others, but I will say that out of 20 or so stocks that I played there were only 2 that I got out of with a small lose! All of the rest returned some sort of gain!

Now let me add that 900% is an exceptional month, but not undueable over again!

Heres the principal I used and I hope it helps some!

I took a beat up account I had with $740.00 left in it, and its now over $6600.00 this month!

I read every news release that came out in the AM and afterhours. Here http://www.stockhouse.com/news/
and I read every new post to Allstocks and a few other boards.
I had decided that all I wanted was a gain of some kind on every stock I played. Be it 5% or 100% but that I was certainly not going to risk losing gains of any kind!

When it comes to News some things run a stock and others don't, I have learned this over time. Getting in early is the best way to take profits from a run. I sell while its running not at the top. Even though some stocks keep going once they peek for the day, many more retrace and settle, making it harder to take a good gain out.

I stick to acquisition, spin offs, very large contracts, buybacks, and news of a large caliber.

I can scan a stock in less than 5 minutes to see if the chart is down and how badly, what the O/S A/S is if its available, what past news is out, and how much volume does it trade to make it move!

because of the low amount I was starting with I decided that all in was the best means of bring up the value.

the numbers!

$740. x 10% is a $74. gain less $22. in/out commitions or $52.

add $52. to the next play!

$792.00 + 10% is a $79. gain -$22 for brocker. Add $57. to the next play.

$871 x 10% is $65. added after brocker!

These are only examples and as we all know 10% could be 30% or even 100% in a day on the right news, and at least three of my plays this month returned 100% or better, but the point is to take some kind of gain at the end of the day, be it 2% or 100% and find another breaking news story to invest in!

There is no long in penny world and if there is, what is the benefit? Holding for a month or 2 for what a 100%-1000% gain and hoping? There are stocks running every single day while you wait for gains and sometimes even just to get your original investment back. Is it worth it?

Lets say your gonna hold $500. in xyz company for 2 months! Verses playing the momentum of news worthy of a run!

$500. X 500% after 2 months is $2500. if it runs after your long hold!

$500 + 10% every trading day for 2 months compounded! Thats about 45 trading days

Day 1 $500
Day 10 you have $895 after $22. brocker fees on every round trip in/out! just under 80% gain!
Day 20 you have $1874. after brocker fees or a 375% gain!
I'll let you do the math beyond here!

This is all based on 10% a day compounded daily and after brocker fees of $22. per round trip! As you can see it adds up pretty dam fast! Add in one or 2 30% or higher gains and see just how fast it adds up! Even throw in a 10-20% lose a couple of times a month. It still comes out green!

My point is that only making 10% on every play every day, adds up faster than any 500% gain after a 2 month hold! With only minimal risk due to the fact that I'm not staying in beyond the momentum, and playing only the best news stocks every day.

This is not a guaranteed win/win situation, but its working for me. I have herd it over and over again how high risk should bring high reward. I say "At what cost and how many have lost"

Lets face it the penny market is a day traders market, and when we realize this it is easier to take profits and play the game.

I like trading alot more than sitting and watching!

Good Luck
Rick

--------------------
Nothing moves a sub like news!!!

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Rules
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Nice post!
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Akira_Lapin
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On behalf of ... well, no one ... because I only speak for myself as a newbie.

Thanks for the info and advice, Rick!

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jack85
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rick this is one of the best posts i ever read! I'm going to print it and hang it next to my computer and read it every day before trading begins.
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Chas35
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great post rick...the hard part is figuring out which ones will run on news..I see a lot of stocks on this board drop on good news...like the company puts out a great PR and dumps a few million shares into the market at the same time
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Thorn
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Lol. If I had all day (or even an hour) to do that, I suppose that would be a great strategy. Thanks for the info tho.

--------------------
May your trading build your character as well as your portfolio.

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J3
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Ric,

Isn't there a required $25,000 account minimum for pattern day traders?

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vinnie filoia
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RIC WHATS THE NEXT ONE TO GET INTO THANKS VINMAN
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futurama08
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J3: I think if you use "Settled Cash" only to make these trades it doesn't matter. It's if you are using the proceeds from one stock sale immediately to buy another stock and sell that second stock without the first one clearing that you need the $25,000/day trader minimum.
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rickpic
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J3 yes there is which makes the gains I have for this month even better because they are based on only 2 trades per week all in all out! You can however get around this by trading day over day! Buy today sell tomorrow!

Vinnie I don't see much today! CALI was running hot but the momentum is down so I passed on it. I did however just get back into BTSI which I traded earier this week buying at .032 and selling at .038 and now I'm in at .032 again with more capitol!

Don't however buy anything without doing your own DD first please! I would hate for people to follow me and lose. That would suck for you and for me!

--------------------
Nothing moves a sub like news!!!

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Thorn
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One of these days I'll gain the insight to sell high and "know" that it will go down. Nice call, on BTSI, rickpic.

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May your trading build your character as well as your portfolio.

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binnocent
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Excellent Post Rick!

I have to agree with your strategy 100%.
I got back into trading about 2 & 1/2 years ago with $20,000 and thought I'd try pinks and OTCBB stocks. Well I learned the hard way dropping my portfolio down to $4,500 about 6 months ago. I then decided there are no long holds in these companies. Just way to many crooks. So I decided no more holds long. I have been doing 1,2 or 3 days, which I am also leaning towards going max 1 day or next morning gappers only. I am happy to say I've increased my portfolio back to $9,700. Still a long way to get back to my starting point, but I'm having fun again and pretty sure I'll get back and beyond.

Good Luck to All!!!!

Bob

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rickpic
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binnocent

Nice turn around! This is the info that the MMs, hedge funds, and theves don't want us to know! Its a fast market and only the fast survive!

rick

--------------------
Nothing moves a sub like news!!!

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Big Green 1
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WOW - thanks RICKPIC - this is awesome info!!
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J3
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Ric,
I've been trying to follow your advice and watch the news looking for the next runner. I've noticed that one of the problems I've found is that when really good news hits and I check into the stock, either the pps is too high, or the volume is too low, or both. Have you ran into this? Any suggestions?

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Jerm
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Ric,

Great post... much thanks! I have been doing something similar to you the past couple of weeks with some success... I'm still learning when it comes to picking the right news that will move a stock. I've always thought it would be cool to have a live chat room running with mature individuals (i.e. ban pumper/dumpers, jerks, etc) discussing the day's stocks, etc.

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Superbee383
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I'm curious about something too. Ric, you say you only pick 2 (on average) stocks per week to buy/sell? This question is for all of you though. Approximately how many different stocks do you hold on average? And/or buy-sell per week? And what do most of you put into a purchase? $200? $500? $1000 or more? I'm still a newbie, and still don't put alot into one stock except for a couple. But I'm curious how you all play it. Thanks in advance!

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"As long as there are dreamers, there are dreams that will come true."

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rickpic
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As I said at the begining of this thread I've been going all in with this particular account and taking profits ASAP to make sure that I stays green! Typicaly 2 trades a week with this account.

--------------------
Nothing moves a sub like news!!!

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Jerm
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Superbee,

FWIW, I have been playing with $500-$1000 trades depending on how much I have free and how I feel about the stock... just remember though... the commission fees can really eat up a profit especially if you are buying with small chunks.

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Leardron
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Ric? What chart or charts do you look at and what site do you go to?
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Superbee383
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Jerm, you are so right about the commissions! I once read on here, someone 'SAID'he was able to talk Ameritrade into lower commissions since he did so many trades. He said he was paying 7.00 instead of the 10.99. Has anyone else ever tried calling any of the brokerage firms and negotiated lower commissions?

--------------------
"As long as there are dreamers, there are dreams that will come true."

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rickpic
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just banked another $1700 from EEGC now at $8300 up 1100% this month! All it takes is the right news and the bank to play it! Oh yes and the smarts to take a profit!

--------------------
Nothing moves a sub like news!!!

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Andreas
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Rickpic:

Great postings!!


How do you determine the right time to get out and is there some kind of rule, which news (content) is favorable for a higher price?

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rickpic
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well EEGC coming out with a 1.1b announcment is my kinda news and I take profit when the momentum turns. As long as volume is coming in strong I feel its ok to ride a dip but when that volume slows way down its time for me to move on!

--------------------
Nothing moves a sub like news!!!

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bmarley5780
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best damn post I have seen in awhile...

stars for ya brotha!

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Andreas
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quote:
Originally posted by rickpic:
well EEGC coming out with a 1.1b announcment is my kinda news and I take profit when the momentum turns. As long as volume is coming in strong I feel its ok to ride a dip but when that volume slows way down its time for me to move on!

That makes a lot of sense!!

I bought exactly 1 minute after news came through and riding it right now [Smile]

Just have to keep an eye on it and sell at the right time....


Thanks Ric!!

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Polarbear17
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Nice stragety Rick , Put as my aviable cash is lower than what you started with , and i have some stocks that i have held long term tying up cash , i wonder if i have left my self to spread out .

CMKX 100,000
LBTN 550
PCCR 250,000
CWMF 250,000 BEFORE F/S
ECUI 5,000
ICMH 25,000

AND $150 IN CASH CURRENTLY

I did manage to pick up some Amhd last week at .004 and sold for a $13.00 profit in 3 days.

An ideas Rick?

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rickpic
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Polarbear thats a mess! Looks like you are the last man out! My idea would be to switch to being the first man out! Little bites add up!

--------------------
Nothing moves a sub like news!!!

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rickpic
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Leardron I'm just using the chart provided with Ameritrade. I'm not to much of a tech guy but I can hold my own when reading a chart! LFWD was a chart play and payed off big time this week! Most of the time its news that I'm running with though. The bigger the better!

--------------------
Nothing moves a sub like news!!!

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Polarbear17
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And how do you suppose i do that , Rick. I understand that little bites add up but i've held some of these stocks for over two years waiting for the big pop. With nothing to show but r/s and dilultion. My best bet is to hope that i could flip PCCR at .0002 and hope CWMF isn,t a scam and i see a little pps rise with the next PR. I need to get some more cash so i can buy enough so my $5.00 commsion at choice trade is of little effect on my selling price.
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Great Job rickpic!!

You the man!!!!!!

Joe

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DQ.
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Good post Rickpic. I wish I had the luxury of being able to sit at the computer every day and trade like that but I don't. I do think there are long term pinks though. I have held PLNI for a long time and am up about 13 grand on it and it is going to move way above that in the next few weeks. JPHC is another example.
I have a blast trading and really do wish I could trade daily like that. Maybe after a couple of these longs make me rich I'll be able to trade more often.
Thanks for the post and keep up the good work!!!

--------------------
It's only money..We'll make more tomorrow!

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podcaster
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rickpic i gotta hand it to ya-- brilliant post!! i have been thinking exactly the same thing last couple of weeks but couldn't quite convince myself it wasn't fantasy... thanks for posting. one important difference- you added a whole new dimension to my thinking on this: news and pr. my approach was strictly TA
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rickpic
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DQ

Great job on PLNI, but you are playing one in a sea of red! My point is for every OTCBB or Pink stock that goes up and stays there, there are 99 that go up and come back down! By playing news I reduce the odds to the here and now! Meaning that by playing huge breaking news I'm swinging the odds in my favor that the stock will go up in the first place and by being on top of breaking news I am able to be one of the first one in! By selling as the stock rises I am also swinging the odds n my favor to get back out with a gain. I understand that many can not play stocks all day, but many more could if they figured out that even a small gain adds up, instead of going for the gold on each play. Just the length of some of the threads here at Alstocks tells me that many hold for months and months after letting a gain pass them by! I have gotten to the point where I don't even want to hold stocks over night, because while the stock I hold over night may go up tomorrow, at the same time another stock may present itself pre market and be a better choice for that day!

--------------------
Nothing moves a sub like news!!!

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rickpic
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Polarbear

If all your stock was cash, instead of the waiting game for them to save you, you would be playing the waiting game for the next really big PR to start you in the right direction! Its not about rushing into the first fairly good PR, its about waiting with cash for something big! While waiting with cash there is no risk!

Point of fact: If you held CWMF below .0004 prior to the run it had 2 weeks ago and you still hold it today then you let an opportunity to take a profit pass you by. I on the other hand was holding CWMF at .0002 and got out at .0004 missing the major fun, but taking a 100% gain and moving it to another gainer for more profit!

IF is a very key word here! You said if they put out news and it runs up! This is the position you are in because you are holding. I on the other hand being on the outside looking in say. It they put out news I will buy back in and gain on the run!

Your broker fee is low so you should be able to make 10-20% gains on even $200-$400 and not have to worry about them. Go back to the top to see what 10% compounded for 20 days is!

--------------------
Nothing moves a sub like news!!!

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