Tips on trading Penny stocks

[docrew0]

Staying up to date using a Web Monitor

Here is a tool that can check the Internet for you. It has some limitations yes but it can check for page & search result changes once you master it. For instance you should always have a link to the SEC filings page of whatever stock your monitoring. Here is one example, this URL would be entered into Webmon. Webmon will look to this address as often as you tell it to and let you know when any filings are received by the SEC. It also has an editor allowing you to customize what part of the web page to monitor. This can help you avoid false hits on pages with advertising or date and time features. This one is free and you can find ones for purchase with many more features. Good luck
http://www.btinternet.com/~markwell/webmon/

[Yoda0629]

Pretty interesting thoughts by Chartinator

Posted by: chartinator
In reply to: None Date:6/7/2006 11:32:36 PM
Post #of 136077

Novice traders are often puzzled by their inability to put on winning trades. Everything seems plausible in the planning stages of a trade, but when it comes time to execute the trading plan, they choke. Why? Many times it is because of performance anxiety. When their money is on the line, they worry about how well they will do, and they can't get the idea of losing out of their mind. What's the solution? If you can think like an independent-minded trader, you will trade freely, creatively, and profitably.

Going against the crowd isn’t easy. We have a natural human, adaptive tendency to follow the crowd. Following the crowd usually keeps us safe, like fish that swim in schools for protection. The old adage, there’s safety in numbers, is true most of the time. As adaptive as conformity is, however, it prevents us from looking inward for guidance. We have a habit of looking outward and thinking of what we "should" do rather than what we want to do.

It’s amazing how conformist humans can be. Have you ever been at a party and done something you would never think of doing just because everyone else was doing it? It's hard to break away from the crowd. It is difficult to look completely inward for direction. But, ideally, we should be able to look inward and not care what anyone thinks. For example, imagine going to the financial district during lunch hour, taking off all your clothes, and walking around nonchalantly (believe or not, you can actually see this happen in San Francisco occasionally). It would be difficult to do, but if one were completely independent minded, he or she would have no trouble doing so. He or she wouldn't care what anyone thought. If only we could always be so secure that we naturally traded like rugged individualists.

Rugged individualists are not driven by money, fame, or recognition. They are resilient and persistent. At their core, their self-esteem is genuine and unwavering. As Dr. Nathaniel Branden observes, “When we appreciate the true nature of self-esteem, we see that it is not competitive or comparative. It is not about making myself higher by making you lower. It has nothing to do with you. It is the joy of my own being.”

Winning traders are extreme individualists. They see trading as an art form. They aren't concerned with the status and prestige that riches may bring. They love what they do and enjoy the benefits of working for themselves and being accountable to no one. They go their own way and know deep down that they are meant to be traders. It’s not just a job; it’s a calling. The more you can think like an individualist, the more you’ll be trade freely and creatively. The profits will soon follow.

[Yoda0629]

#8 Treat this as a business Part Duex

I thought this needed a little more because there is more to treating this as a business than just hard work.

Ask this question to yourself ? How much time and money do I want to put into this.

Again it amazes me that there are so many people that will work there ass off to make money trading stocks yet they wont put out the cash to get the right tools.

Let's say you want to start a landscaping business. What is the first thing you do ? Before you even have one client.

Well myself I would go out buy a scag lawnmower or a riding lawnmower and a trailer to tow behind my truck. Cant quite cut grass without them. Right ?

It shocks me how many people do this same thing trading stocks. They wont invest in their business.

I am not talking about going out and getting Esignal today. But if you are going to trade get the necessities to start. They arent expensive

Get level 2 get a good charting program get a few monitors

It's crazy think about this.

Alphatrade costs roughly 65 bucks or so for what you need. 1 trade will pay for it !!!!

Goto to a yardsale and buy a monitor, I see them all the time for 5 bucks. Heck you fo later in the day you can prolly haul it off for free because lets face it, no one is prolly gonna buy it.

Goto ebay.com goto craigslist.com , there are so many places you can get cheap stuff now a days

Anyway

This is what I did as a got more money.

I started with 1 monitor and computer roughly 10 years ago

got level 2 and charting back then from mytrack.

After making a little money I invested in 2 monitors.
A month !!!! A month later I realised how much of an advantage I had with 2 monitors to watch the market and make more money I got 3 more monitors and another computer.

Made some more money

I went to yardsales and bought 4 more monitors and bought 2 Matrox Quad cards from Ebay ( 32 bucks each )

Well I dont have to go on I think you get the picture. I still do this tho. Every Year I either update my computer or monitors or at least I buy a chair. I just recently upgraded to Esignal. Best thing I ever did !! I didnt want to becayse I was so used to Alphatrade but man this thing pays for itself in droves !

Fact is I invest in my business. I now pay 320 a month for all the crap I have. Is it worth it ? You're damn right it is. 1 trade pays for that

Treat this as a business and invest in it !!!!!!!!!!

[Yoda0629]

#7 Treat this as a business

Whether you are new to this or have been in a long time. Treat this as a business.

I am shocked at how many people dont treat this as a business. Whether you are doing this for fun or fulltime you are still talking about making and losing money. Why wouldnt you treat this as a business ? Fact is when you treat this as a business you will strive more to make money and do just that little extra sometimes.

Let me tell ya a story of another friend of mine. Lets call him Bob.

Bob has investing all his life yet he cant ever make money. Well he knew I did this fulltime and have been rather successful at times (lol cant always be a winner ! ) Anyway he asked me what's the secret ?

I told him I get up at 6am and I dont leave my desk till 5 or 6 everyday and sometimes I work nights and weekends. This is my job, my business and I have to work hard to make money at it and support my family.

Fact is Bob doesnt do this when I asked him. I said you do this part-time but that doesnt mean you dont have to work at it. I am not saying do this the hours I do.

But it is amazes me how many people think they can just pick a stock out of no where and make money. I told him to either go get a broker or buy a lotto ticket.

[Yoda0629]

#6 Losses #2

I thought I might mention this again as I think this is the hardest thing for a new person. After a while like I said in the other post, you dont think of it, you get used to it. You take your loss and move on.

I was explaining my philosophy to someone on losses and I have actually told many people this. Is it right ? I dont know, you can decide.

My philosophy is to never hold losses in my accounts. If they go red, I might on special occasions hold them a day or 2 but usually I sell them that day ! Just so I dont have to look at them. No matter how big they are.

For several reasons.

1. I think waking up in the morning and looking at my account first thing in the morning with a loss puts me in the wrong state of mind to begin my work day.

Why do I want to come in ready to take on the market and look at red. It makes me think of that bad trade all day long. Makes me think of how stupid I was. All in all I think you need to come in everyday ready to kick ass and think that all day till the close.

Yes you will have ups and downs during the day but to start first thing I dont think it is the best idea.

You think Derek Jeter when he gets up to bat everytime thinks of his last at bat and thinks he's gonna strike out ? Hells no

2. I always use this analogy.

Think if you own a liquor store and you have this swahili vodka in the corner you just cant sell. What would you do ?

You would prolly put it as cheap as possible so you could to get rid of it. Sell it at a loss, give it away, anything, to just get rid of the crap and replace it with something that would make you that money back.

Now why is it people cant do it with a stock ? My thinking is the same for stocks. If it isnt making me money I am getting out because I can put that money to work somewhere else.

[Yoda0629]

#5 Losses

Part of the game. If you cant take a loss then you are in the wrong game.

A baseball player only bats .300 if he is considered good. That means as you prolly know he is getting out 7 out 10 times. Belive it or not you can actually make money trading doing that as well.

You can say Yoda how the heck is that. Well if you average say 1k every good trade and lose 100 every bad trade. you would make 3k and lose 700.

I dont do it anymore but a few years back I actually calculated my so called winning percantage and was surprised to find I actually made something like money on 40% of my trades. Yet I had a great year !! Crazy isnt it !! Well doing this made me strive to get a better percentage.

Here is another quick story and if you are really new I recommend it. I had a friend come over a few months ago because he wanted to learn a little from me. First thing I told him is we are goning to buy abcd stock and then sell it for a loss
Do that 10 times and we will move on
Now I am not talking alot of money here. Total he might have lost 200 maybe. 100 in commissions and 100 in total loss.

Now why did I do that ?

Well I told him he had to get used to losing,

why he said.

Because you are gonna lose everyday you trade. Not all the time but at least once a day. So you best get used to it.

To end the story. He left and thought I was nuts. 3 months later he lost almost all his money and I felt bad for him.

Why did he lose ? He held things to long hoping he would make them back. It doesnt happen but 10% of the time that they come back.

Anway to end this

Take your losses and move on

[Yoda0629]

#4 Filings

You really need to keep up with the filings. The actual reason I started this board was because of the PAIV scenario. I profited from it but I still felt bad for those that didnt pay attention to the filings and still sold even know they knew it was wrong.

If you own the stock you should know everything it is about. This is all comes back to Due dilligence.

Anyway

Keep up with the filings !!

[Alexis1]

Thank you

[Yoda0629]

Tip #3 Notebook

This always kills me how simple it is and yet not many people do it

Keep a notebook, write down every trade. Why u bought, what price whatever you feel comfortable with.

Why ?

You will notice patterns in your trading. You selling early all the time, selling too late ? News plays working ? bounce plays working ? You will notice all pf which will help you.

I started this at first thinking it would be a hassle, now I do it for fun and because after many years it is just soething I am used to. Now at christmas, one present I can count on from my wife is a box full of notebooks. lol

Yoda

[Yoda0629]

Tip #2 Greed

So many people think this is something they can control, if you are a good trader you usually can.

It is hard for everyone, this is prolly the biggest reason people fail. Everyone wants a home run (ala 10 bagger).

I tell everyone who I know that wants to start trading the easiest way to win at this game is to hit singles and if you are wrong, get out and reconsider what you did. You can always get back in. Problem with this is, people are impatient, they want the big run now. Again greed !!!


Famous quote by JP Rockefeller when ask how he got rich :

" I always sell early "

Fact is if you can get a hold of a your greed you will be a better trader, you will make alot of money and in the long run you will be in this game a long long time. Which when it all comes down to it, is the name of the game.

Yoda0629

[Yoda0629]

Tip #1 Due dilligence

Do it !!! If you are buying a car you want to know everything about it. Gas mileage, does it have power windows, big engine, 4 wheel drive, will it go 0-60 in 4 seconds ?

Everyone asks those things when buying a car but funny how it comes to stocks alot of peoeple wont do it. They just want to ride on people's coat tails and believe what they read on here.

I created this board because of the misshap with PAIV, so many people were blaming everyone and anything because they sold restricted shares and were being told they had to buy them back higher. Fact is you should know the stocks you own. Those people who sold, sold because they either didnt know there stock ( hard to believe ) or they thought they could get away with it. Fact is they got caught with their hand in the cookie jar.

Again do you Due dilligence ( ie research ) and you will be better prepared.

Good Luck

Yoda0629