Short Term Trading Week Starting: 20 November, page-88

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journeyman

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20/11/17

23:07

Post #: 28966547
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Originally posted by Freehold ↑

Well this strategy will not work on just any stock. You need to to do a some heavy research into the FA of a stock and sector to ensure that have a hot sector and a hot stock with that sector. If the stock price trajectory is flattish you will continually get stopped out and it will fail.

So as of Today you have 2 options

1. Sell aparcel to reduce you avg entry to below your pilot entry price (If you are risk adverse )

2. Hold full position and hope that it does not fall below your pilot avg price (If you are more aggressive)

So the stock will pull back after the initial rally so you wait. Assuming it does not fall to your avg entry and starts to show signs of support entering (starting swing back up) you enter with a larger position (pyramiding) which will raise your avg entry price upwards but still remain below the lowest retrace point. The key is to reduce or maintain as low avg entry as possible but maximise exposure by increasing position size.

Rinse and repeat for further rallies and pull backs

If at any time the stock fall below your avg entry (+plus your predefined loss your willing to take ) then you sell the lot instantly. If this is the case your entry timing was obviously wrong and you have taken a small hit. So this trade campaign is now over.

Now look to time another pilot entry at a better time with the hope of successfully pyramiding in ( new campaign).

I remember piloting 1 stock 4 or 5 times (small loss on each one) before it eventually took off and 5 bagged

Be disciplined and and do your FA well if the stock is a dud and will never fly you will just lose $$ ...I look for world class FA on a stock the more world class the harder I pursue it trade wise.

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Thanks Free, I'm with you now. I was thinking it was a strategy that could be applied to most penny stocks that have decent potential.

So basically it is only for stocks that have enormous potential (i.e. loads of bags if all goes well). And the only way to know which those are is to have done the FA to be certain that it is the hottest of the hot.

Now, just to find one...

Cheers
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