Replies to post #1187 on Triple 000 and Sub-penny Chart Plays

[trader53]

Re-post > Educational Post: "Trading Gaps"

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=76226544

[trader53]

SUGO: An example of "The Breakaway Gap"

Breakaway Gaps are usually closed over time.
You see them in a multiday emotion run,
or "walkdown",
where the stock price is trending around,
over several months.
The retail mindset returns to logic,
and fills the gaps with the retrace.


In the January and February "walkdown",
you will notice 3 - "Breakaway Gaps".

> 0.001
> 0.0007
> 0.0005

ALL of the "gaps" got filled,
as the stock climbed in late Feb/Mar!!

The "short volume" in SUGO was increasing from Jan to Feb,
and caused the "Gaps" and the "walkdown" in the price of the stock.

Then, several "Promoters" began a Promotion Campaign,
announcing the stock was undervalued,
and this produced a Buying frenzee,
and a "short squeeze",
as the "short" players were forced into covering their short positions.

As the shorts began buying the stock,
this put Buying pressure on the stock,
which caused the stock to climb,
and ultimately fill the "Breakaway Gaps".

[trader53]

Educational Post: "Trading Stocks"

There are a couple of rules you must live by
if you wish to be profitable in trading stocks.

> Always take profits on the way up.
Secure your gains!
It’s not money in the bank until you sell.

> Trust your gut instinct,
if something feels wrong it usually is.
It’s much better to take a 5%-10% loss
than to eat a 50% loss
because you “hoped” it would bounce back.

> Know your exit strategy before you even buy it,
set a goal and achieve it.


> Where Do I Want to Get Out?

Why, you may ask, would you want to set a take-profit point, where you sell when your stock is performing well?

Well, many people become irrationally attached to their holdings and hold these equities when the underlying fundamentals of the trade have changed.

On the flip side, traders sometimes worry and sell their holdings even when there has been no change in underlying fundamentals.

Both of these situations can lead to losses and missed profit opportunities.

Setting a point at which you will sell takes the emotion out of trading.

[PoemStone]

re posting this one
and from time to time other great posts
taking them to my boards on another site.

With credit and a link back here of course.

Great stuff trader !!