was looking through some of my 2000 - 2002 memos to myself, thought i'd post this for the fun of it, and if you can apply anything, then great..
as you read this a lot of it has changed with the market ( i was typing these notes when everything was tanking, and the otcbb was super tough, so you'll notice the penny naz fad has run it's course, the sub .05 stocks are way better than later 2000 and 2001, but maybe there's still something good to learn...
FWIW:
Memo to self:
Well, as we all know, things have really changed over the past 18 months. I have taken some time to reflect on my trading over this time, how it has adapted, how it has not adapted, and how I think I can improve.
I try to always learn from each trade, positive or negative, and find myself taking notes from time to time in an effort to better myself as a trader. As most of us know, it’s one thing to KNOW something, it’s another to DO it – I still make stupid mistakes that go against everything I have learned, mistakes that should not happen. SOMEDAY I HOPE TO ELIMINATE THOSE BAD CHOICES…especially when I know better…
That said, here are some random notes and thoughts, basically just speaking to myself, all FWIW:
-Bounce plays are still great plays, mostly on the naz, always scan and monitor those that are down 40% or more, there’s usually one or two a day, most of them bounce, some for quick 20%, 15 minute bounce, others gradually work there way back until they are nearing pre-tank levels by the close ( therefore holding half can be good at times )
-BB stocks in the .1 - .5 range are good plays when volume is high and walls of mm’s are falling on L2…do not chase or average up, sell some on the ask or in the spread while volume is still strong…AND DON’T TAKE THEM OFF YOUR SCREEN AFTER SELLING – many of them become eod plays in the last 20-40 minutes…
-Low floater BB stocks that are moving on nothing but air = risk very little, do not buy a lot, they can be great for quick 2-3 baggers, but they’ll also kill you on the spread, so don’t be greedy.
-Scalping off bid/ask on the penny naz stocks – Usually a good play, take the money and run on each quick flip, or, if she’s not in halt territory, and has rumors of potential, flip several times to accumulate a ton of free shares…
-Naz penny plays – there are a ton of these now, BE CAREFUL OF HALT POSSIBILITIES…Most of them that have a surge in volume at open and show up on scan, have been running during the 3rd hour of trading…
-Shorting naz stocks on the huge up-side move…-a fantastic play, but important not to short till that one last big move up has occurred ( you know, the one that always happens right after I sell on the long side lol )
-Sub Nickel stocks – Usually not a good play for me these days…If the volume is there and news or a rumor or something is moving it, buy a nice block, but make sure there are several mm’s in the ball park…how many times have I lost money buying when it’s .028 x .03 and up she goes to .035 x .045, can’t get out on ask, can’t get out on bid, nite goes red, volume stops, spread goes to .022 x .04 and I’m scrambling to get out for a 30% loss…
-Always run your eod scans starting with 60-90 minutes to go in the otcbb trading day – these are your favorite plays, the IMDS, ISCO type plays…these are the plays where I like to lay the money out…the pattern is usually there, stock has news in morning, runs from say .4 to .6 on news, comes back to .48 or .5 during lunch and then starts slowly picking up steam, 40 minutes to go and she’ll have that one last dip, volume stays strong, THAT IS WHEN YOU LOAD UP…I have no problem trying for 3 blocks of 5k each of a .5 or .6 or .8 stock, whatever…then, remember to sell one block the 10 minutes to go or so ( during that huge run – up, and dump the rest at the close, or, at best, hold that last block for the next morning )
-Speaking of gap plays – they are few and far between these days, there are the exceptions, but for me, cash is usually king eod ( nothing like watching a gap – down premarket on L2 and getting that helpless feeling )
RULE: Never buy a stock with little or no volume...hoping for volume isn't good enough
EXCEPTION: News, like a f/s that is undiscovered - even then, only throw a little money at it until L2 starts taking shape
RULE: Get out when the volume slows…better to pay a bit more when the volume comes back if needed
RULE: Don’t let a profitable trade go in the negative
RULE: If the stock is heading down, sell it, you can always buy it back
EXCEPTION: Buying for a bounce and averaging down if necessary, as long as there is volume – the rare monster bounce plays where you actually buy 2 or 3 times before the turn…
RULE: When buying a stock that follows the naz, once I clear break-even and have a cushion, get off L2 and watch intraday 1-3 minute chart along with naz compx chart….many times this will help you get past all the little headfakes on the way to a nice run…examples: think of the many SDLI, EPNY type runs I’ve missed by taking small profits when the general market was clearly gaining momentum or tanking – depending if I was long or short…
EXCEPTION: When market is uncertain and you have a profit, take it before the downticks
RULE: Don’t trade out of boredom or anger….One good trade can make a good day, and one good day can make a good week…one good week can make a good month and one monster month can make for a decent year…SO DON’T FORCE THE TRADES…
RULE: Always run newswatch for bb’s
RULE: Always start checking dividends list at 10:15am
RULE: Always run scans for momo plays and walkdowns
RULE: Always run night scans for volume/price to find possible next day runners…
RULE: Concentrate on the flow of a stock, especially nasdaq, not the profits, but the flow – trade it like paper trading…
RULE: Set mental exit points, but be flexible – and still take some off the table as she goes onward and upward
RULE: No pride – if it’s a good buy, buy it, even if you sold for less 30 seconds before…and, if it’s a losing trade, get out and move on
RULE: After making a trade, profitable or not, review it, what was done well, what can I do better…STOP COMPLAINING and start being a professional – learn from mistakes and become a better trader…
RULE: have fun : )
I’ve learned recently, that many days, the best trade I can make is none at all. Do not force the issue, let things come to you. And then, when they do, when you get that gut feel, don’t be afraid to buy large. Not that your looking for a homerun, rather trying to take advantage of the rare diamond. I’ve learned that my best days are when there are huge swings in the nasdaq and dow – and when they turn, up or down, jump in with a couple of the remaining “high-flyers” and ride those suckers till they run out of gas – let the market move them, L2 is useless unless it’s a 30 second quick flip…
NEVER, EVER LET A TRADE GO PAST YOUR STOP LOSS ( mental or real ) How many times have you decided that she’ll turn soon enough and you watch a winner turn into a loser and watch a naz trade go from a $400 gain, to a $500 loss, when my trailing stop would have locked in profits, or minimized a loss to $100 or whatever…
Take a break during the day, if you nail a monster, go take a walk outside, and start over with a clean slate ( you didn’t just make $3k on that trade, you’re starting over again : ) otherwise you become careless )
If I make a mistake or get taken to the cleaners on a trade, take a walk outside, relax for a few minutes…some of the worst trades I’ve ever made came immediately following a stupid mistake trade – I get pissed and then try to make up for the loss by buying big on anything that comes along next – stupid stupid stupid.
Holding a position short or long going into a/h’s on earnings is a scary proposition, you may miss it, but better it is to wait and see news and reaction and try to get in then…
Best trade out there right now? Halt plays that are halted on good news – fire off all the buys you can on island, and be quick, cause there’s a guy named wayne in france who will be on it for sure…
