I have a question to the forum, whats everyone's Sweet spot when it comes to Shares on Issues (SOI) and no go zone? does everyone base Each SOI against company and investment plan LT invest or ST trade?
What are the pro's and cons for each? Can it affect a companies ability to raise or Instos and brokers buying on Market?
examples too little could produce high volatility in either direction and limit exiting or buy man without affecting SP either way (A3D only one I can think of from memory).
Too many and limits movement if stuck at low prices 0.001c-0.003 CAD-WCN examples
is there a logical effect that SOI have on a company which psych-out investors?. the largest MC I can find is FMG with 3bill SOI obviously being that large SOI won't matter too much but compared to AGO 9 billion SOI every pip movement drastically can change overall valuation of company
SOI can be a problem for a Co that wants to dual list... I don't trade other exchanges, so my info is suspect... but I believe brokerage rules are different in Europe and are sensitive to the number of shares traded.... and in the US/Canada the SP can determine how a company is listed and there is buyer resistance to billions of shares trading in the penny range.
Down in speccy land the attention is on the market cap ...100's of millions of shares doesn't seem to bother people. How well the management care for the register is important if you are looking at a company for a long term [many years] investment. The example of FMG came about due to success... management did a 10 for 1 stock split when the SP was north of $60.
A company with a couple of billion shares probably got that way because of multiple CR's... the question to answer is ... did all of that new money raised grow the company or has it disappeared... was it spent on company development or did it go into administration expenses [cough, cough]. The so-called 'boiler rooms' have been a facet of the penny end of the market for a very long time. The stocks being traded [or better described as pumped and dumped] historically almost never rise above a few cents. For them to do so is an undesirable outcome for those seeking to exploit the market because the profit comes from the percentage changes, which are greater if the price trades in a perpetually low range.
There are many levels operating in the market. A lot of successful traders make money because they are closer to the deals in the early stages... so ... brokers will have a list of go-to clients for IPO's and CR's. Those people who are networked in this way will receive discounted placements in exchange for taking large positions... the amount of shares on issue is not an important factor for them because their risk is mitigated [they don't always make money but usually they do] but for the retail person outside of that loop [and therefore the person targeted as the exit for the large holders] it is a question of how much 'meat is left on the bone' and whether the funds raised are actually sufficient to produce a commercial outcome which offsets the dilution of the register [i.e. are more CR's likely, which further increases the SOI]. There are a number of Co's which over time have demonstrated themselves to be only money printing operations dedicated to maintaining director lifestyles and they eventually fail.
Another thing which occasionally happens is a Co is a genuine business but the management is less so... in which case greed is satisfied through a series of steeply discounted issues which consistently are placed into the same hands .. resulting in a change of control away from the retail holders who have been diluted out of any meaningful ownership. Many 100's of millions of shares is something to examine carefully.
In short term trading what you are looking for is a stock which is miss-priced and also [crucially] has a near term catalyst which fairly soon leads to re-rating and a price discovery which reflects its intrinsic value. The number of shares on issue is not a significant factor in that.... the important info is the market capitalisation, cash position and enterprise value.
With long term trading [investing] the SOI is an important consideration because it can give an indication about the quality of management..... if, after several years, management has not issued millions and millions of shares it says quite a few things. Firstly those shareholders who bought early on have retained maximum value [assuming the Co is a viable concern] and it is an indication that management might be concerned about shareholders. It also is some evidence that management actually knows how to control expenses and can accurately forecast the financial needs of the company [i.e. they raised the correct amount in the original IPO or the Co has some cash flow and earnings which are well managed]
Morning all, I have a question that I think will be very hard to answer. How many trades per week or month do you regular traders do? My reason for asking is I have this FOMO and tend to hang on to a stock hoping it will go up. It may not go down, it may not lose any value, it may not go up in value, but I do not free up any cash and miss out on possibles such as JAT which I looked at Thursday. I need to learn to cut the strings, suck it in and trade more often. I have all day to do it but just sit there too scared to press the sell just in case then watch what I may have bought go up, and what I should of sold just sit there. Your thoughts appreciated.
I am just a beginner mate but after many years of trying, I came to one conclusion. I have to have a plan and STICK TO IT. I wasted a lot of money over time doing just what you are doing now. I was putting all my hard earned into the markets every payday. I lived and worked in the Pilbara as a single man with no living expenses whatsover. I am scared to look back on how much I threw away.
I have been a long term member of HC but do do contribute much for fear of making a fool of myself.
As times have changed, and I am no longer on easy street, I needed to find a way to generate an income. I am no longer physically able to carry out my trade, and where I currently live is in recession. Thus this year I decided to set some ground rules.
I started a new trading account by letting go of some of my longer term holds, all losing, some up to 60% of their value. I put this cash into a trading account with which I aimed to make 2% on a weekly basis. It may not sound like much, but I did some figures and if this 2% is maintained cumulatively it is amazing how fast this adds up. I have had to really tighten my belt as I have no other income and cannot foresee any for some time.
Now I layed my self some ground rules. Once I have made 2% for the week. Thats it. Stop. No more until Monday. Find something else to do. Example I was out by Thursday am this week and went and started cutting down a huge gum tree in my yard with a hand saw. I had to leave the screen until after 4pm as the the temptation to buy is too great for me, I am very impulsive. Plus climbing 20ft ladders can help physically after spending hours in front of a screen every day.
I open up HC at 3am everyday and gravitate towards the STT. I get some ideas from here and I have 4 hours to go a little bit further into the stocks before the market opens. This is my most productive time as I am an alcoholic and have usually succumbed to my first light beer by 10am. (WA time). I do not have the intelligence nor the attention span to study/understand charts and technicals except the very basics. I also follow the daytraders forum before open, and if a stock comes up that I have a little time to look into I will add it to a watchlist. I clear this watchlist at the end of everyday otherwise things get too confusing for my addled brain.
When I buy a stock, I have an idea what sort of stop loss I will put in. This can be problematic, as all my buys are penny stocks. Since I started this new regime, I cannot believe the change it has made to my bottom line. No more sitting for months with thousands tied up in some dog that is going backwards, all the while missing out on the runners that so often get picked up on this thread. I also make great use of the trailing sells, since my broker recently allowed me to access them free.
I setup a spreadsheet so that all my stocks buy/sells are there for me to study any time I get the inclination. I have also included what if scenarios on the sheets so That I may see what happens to my earnings/losses at certain price points.
I only started with a small amount as of this year, and my two percent is not enough for me too live on, and will not be for some time. As it turns out my average gain is 2.44% since Jan 1. I do not have the funds nor the brains as do some of the guys here and on the DTT, but I think back and realise that had I started this regime when I first entered the market in 2009, I would have done so much better.
I lso have an agreement with my broker that helps reduce my eagerness to buy impulsively. This is that funds must be available in my trading account at time of purchase. None of this having them allow me to purchase when no funds in the account. Even if waiting 2 days for settlement in my favour no buying until funds IN MY ACCOUNT.
So far I have had no big % wins, but it is a work in progress and I am sure I can improve. For example, I had only 3 trades this week CTM 23% AAJ 10% and GSW 8%. Only small wins but they are not losses. In total they added up to over my 2% so I stopped for the week. As many here say, no one goes broke taking a profit.
Anyway, I did not mean for this post to become a novella, but once I started it got out of hand, hope you can relate to this as you are just beginning, just like we all were at some stage.
Cheers and thanks to all the STT's out there.
Great post. Huge thanks for sharing. I am not Robinson Crusoe either. Same thing. Started 2 years ago with one stock in lithium. After 6 months I had tripled my money. Ahhh... how easy is this I said. Money for jam. I read you needed a plan. Tried to sit down and do one. It is like starting an essay. The first part is the hardest as it involves searching inside yourself for your motivations and ideas on how to achieve your goals. This is definately not my strength. So I did a half assed job and put it in a draw. Done.
So I started frantically trading everything that moved. No prizes for guessing what happened then. I became a teller machine for the market. Probably gave lots of you good people a great deal of money. I will put it down as education expenses. After I couldn't sit down for a few months because my butt hurt so much due to an unlubricated rogering from the market I realised I obviously had to change.
I then said no more trading until I have done a proper detailed plan that I stick to.
I have fallen off the wagon a few times and impulsively bought stock. Lost again. Evaluated why I did it. What was I thinking and what did I do wrong.
Its now been 6 month writing my plan inbetween living my life and for the past 2 months I have not bought anything!! I am up to the testing stage of the trading part of my plan. Backtesting, writing down my thoughts, entries and exits.
I am not sure when I will be confident to start again. I have kept my conviction hold shares, everything else went. Starting again. So far on paper its looking pretty good in theory. Just need to work on exits a bit more. Already I feel much more comfortable that at least if I lose some, it will not be due to lack of preparation.
So in summary,
Yes, get yourself a plan and practice sticking to it.
Research is critical. Limit your watchlists ( thanks PJ and HAC30). Test your trading plan. Dont be disheartened if you break your rules, learn from it and limit it. Keep a cunning kitty of cash ready for unexpected opportunity but use it very, very rarely and only if it conforms to you plan. Take the right trade and not almost good enough trades. Everyones plan is different, it has to suit you and be your work.
These are some of the things I will try and practice.
Have a good weekend all and thanks for your wisdom over the past few years (intended and unintended). This weekends music posts have been great and uplifting. Thank you all.
It's not that it's hard question, it's more of that fact what do you want to do about it ?
When i first started out, i was jumping in and out of stocks like crazy, having done FA on the ones i owned and sitting waiting, i couldn't help jumping in to others that where on the pump. But quickly i learned my timing was all wrong. By the time i jumped in, the gains where relatively small and the chart was to far extended and i would end up selling at a loss, was even worse when the stock i sold out of started to run.
At that point, i got sick of losing trades and fomo, so i sat back on my well researched stocks and waited.
After awhile i still had some fomo but instead of trading in and out, i wanted a way to make fomo my bitch.
There was only a few way's to do that, 1 is have money on the side for other stocks and 2 learn to buy the break out rather then sitting on stocks for to long and buy the pull backs rather then the pumps.
I think it all comes down to what type of trader you want to be and also how much time do you want to invest in learning the deferent ways of trading. All styles take time to learn, i would say about a year of full time learning, well that was how long it had taken for me to learn the basics of TA, even then it's not all levels of TA that i learned, just learned what worked with my style of trading.
I don't think there is anything wrong with a little bit of FOMO, if anything it should tell you that you have timed your entry wrong with the stocks your holding. If you don't know that you have timed your entry wrong, then you need to learn how to read break outs on a chart. If you can't do that, then your plan of trading while having fomo will blow up your account so just sit tight on the stocks you own if you think they are decent.
The biggest position you should take is in your self, learning and working out what works for you IMO
I have also struggled with this for a long time, but more recently I've really started venturing out of long-termers and trying to learn the STT gig. I've done this before too, in particular for a time a little after the GFC. What has really stuck out to me though is that there are a number of companies that I was investing in back then that I am stumbling across now after having completely forgotten about them. I'm sure some of them have had their ups and downs, but from then to now, most of them seem to have done absolutely nothing. In the better part of 10 years! And some have been completely remade into something else.
Anyway, I've recently realised that whenever I find stocks that look like they have great potential, the 'need' to buy always comes over me, but never with any consideration as to what is actually coming up that is going to send it on its merry way. So now (and I mean like only in the last few weeks) I've realised that this is a huge part that i've been missing from what i've been doing. What is actually imminent that is going to get this going?? So far i've decided that I don't think it matters too much, so long as there are at least a few good things coming up, coupled with the right TA setup. I've personally even concluded that the Strauss' and FF's (and the rest!) starting to tweet about a stock is also as good as half of the real catalyst factors... I guess the fundamental importance of a catalyst is that it will generate demand for the stock.
I think the next thing i'm going to put of a lot of importance on is using some form of TA (nothing too complicated) to routinely exit positions... entry is pretty easy imo, unless your trying to jump into something that's volatile because it's already started running (which is a LOT of the stocks that are posted about on the STT forum), but exiting is so damn hard... so many FA and TA variables to consider and FOMO is as strong as ever when you're making good profits. I'm hoping that TA will help with this, providing the stocks i'm entering are already compatible with the TA i'm trying to use. That seems to be another problem with these bottom dwellers though... most of them are so illiquid and/or volatile that they seem to often operate outside of most of the easily applied TA 'laws'.
I've also recently been wondering whether I should move away from pennies and go towards trending small/mid caps. I have had really consistent success trading a slightly larger stock in a solid up trend, even though i've put jack all time into trying to do it. MMI being the stock. I seem to only make 10-30% with each trade, but then I pick it up again for less than it's previous high and cumulatively the profits are adding up to way more than the overall gain of ~50% for the stock... I don't know if it satisfies my junkie cravings for spec volatility , but maybe long-term success will come with what seems to come most naturally to me...
, but maybe long-term success will come with what seems to come most naturally to me...
