I have to disagree.
The idea is to become a pennydreadful expert.
You see, with anything, someone is always the expert, it may as well be you.
Since excessive shorting, online trading (gambling for most) has come into existence, along with ability to get info fast from internet sources, generate psychological hype and momentum from HC and the like, the rules have changed in favour of the brokers, hedge funds, shorters, etc, you need to live with this and play by the rules.
Do not fight the above, embrace it.
As the great man says, its time in the market, not timing of the market, however, its the exact opposite IMO for penny stocks.
Most of my trades are for between 2 minutes (yes 2 minutes) and 3 days, that's it.
here are some ramblings to digest:
First up, understand that 99% of the penny dreadfuls will never make any money, so don't buy thinking they will, if you do, and you continue to hold, you will lose, guaranteed.
They will either never make the money projected, or by the time they do you will be so highly diluted from capital raisings, they may as well make $0.
Dont buy at the peak of the hyperbole cycle.
Some good examples are AZK (60c now?) , TON (90c now?, LYC ($2 now?) , VTX (this is the current one that is in the middle of its hyperbole BS and will get smashed shortly, it is 90% inevitable) there are so many I could go on all day.
Sidenote: If it's a mining stock turned new tech, and you can see the SP has doubled from the lows prior to the big new tech anns, then have great caution buying it.
DO YOUR OWN RESEARCH AND BE FIRST OUT..
Other rules I use for trading minnows
1. Only buy before or and the near start of the hype, and sell around the middle.
2. Tight stoploss, yes you will get knocked out more often than not, but a small loss or a large win is what will keep you in the game.
3. Make sure there is not a massive capital raising or positive anns and capital raising coming soon, you will 100% get caught with your pants down, especially positive anns/capital raising combined, the stock will drop to near the cap price, and as the stock comes out of the TH, your stoploss wont trigger as the stock will open lower than your stoploss price, so you are screwed.
4. Be one of the first to talk about the stock on HC, not the last, you need to be first in, first out, not last in, last out.
5. Dont listen to anyone (including me) on HC if they are talking up a stock, do your own research, if I buy a stock, ill be talking it up, as will any other holders, dont be fooled, i will be selling my shares to you eventually.
6. There are no friends on the ASX or HC, if you think there are, ask one to give you your money back when you listen to them, then buy a stock and make a loss.
7. Try to find responsible posters that seem to know their stuff, whether it be how to interpret drilling results, or some other industry results, check their track record, use their knowledge, ask them questions, I do, there are a lot of very very smart people on HC.
If im asking questions on a stock, then I have either already bought, about to buy but need convincing, asking questions to get a market reaction from the holders, or some physiological reason, so be wary.
If I ask you a direct question, its usually because I simply do not know the answer and respect those that have further knowledge than I.
8. Know where your exit is. Most buy on hype, sell at a loss and then try work out what went wrong. You are simply an idiot. its ok, we all are, just try be less of an idiot than the idiot buying from you. Set your sell price before you buy.
9. Never mind leaving profit for the next buyers. What I mean is, when that little am in your head says this stock has further to run, sell out then, do not hold, you need those buyers in the run to buy from you, if there is no further run, then you have left it too late, which means you bought in too late, or sold too late, buy early and sell early.
10. Profit is NOT a dirty word, take it always as early as possible. Sometimes, if I am sitting on a 30/40/50%+ profit in a few hours, i will take my initial investment out, then leave the profit in to do its thing, thats ok too.
11. 5 small losses should be less in total than 1 large gain. In other words, expect to lose small on 5 out of 6 trades and make large return on 1, and your winning one should be more than double $$ your 5 losses. By small losses I mean 10% or less on each trade.
12. Do not believe directors, assumptions, announcements, posters, projected incomes without serious research by yourself.
13. Don't listen to me, set your own rules and stick by them.
Good luck gamblers.
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