Plans and Ideas Archives - Page 4 of 6

My First Week In Penny Stock Land!

23rd November 2015 by Christopher Leave a Comment

With the first week of freedom now gone I feel happy with what I’ve learnt and how I’ve progressed from a terrible trader that knew very little about penny stocks, to a much more confident trader that can now pick out stocks with an actual plan to trade them.

I am waiting for my brokerage account to go live at the moment, and it should be up and ready this week come thanks giving time.

I have recently purchased a new book called “The Day Trader’s Guide to Technical Analysis“
By Chris Lewis, and what an excellent book it is. I’m not entirely sure if they still publish it, as it was published back in 2000 and I haven’t spotted any new or updated editions as of recent. I’m even more surprised about the crappy reviews it has on amazon which just goes to show you that what some traders find works for themselves, most likely doesn’t work for others, and most likely this is when what ever is read is not understood which results in confusion!! Understand?!…

This book may as well have been written by Timothy Sykes in some areas though as a lot of the skills, strategies and the mentality required is very much identical to that of Tim’s. So a great book and I highly recommend it to further anyone’s education with day trading penny stocks.

Any hows lets take a look at how the first week of freedom went:

This Is What Happened In The First Week Of Freedom

The first thing that I was happy with is of course owning your own clock, meaning that I didn’t need to worry about anybody else or any other schedule to adhere to other than my own, which is such a great feeling.

Best of all with no distractions or parcels to deliver I could fully focus on the market and my potential trades before they happen.

The main two stocks that I studied were that of $KBIO and $AVXL as you can see in my last post.

I won’t go into too much detail with them as I’ve seen what they can do, but my general thesis on $AVXL is short at the moment unless some juicy news comes along like last week, which created a bit of a short squeeze.

As for the crazy and completely unpredicted spike with $KBIO that no one could see coming other than insiders in the know, this stock is now in the $18-$20 range area and although I will keep an eye on it for educational purposes I would not be looking to trade it at present.

There were a few other stocks that I watched and divulged into, but these were the main two that reacted, and had I been trading I would have traded $AVXL and banked!

I’m keeping an eye on $BIOS at the moment as there is some activity going on there and there is also a high percentage of shorts in play and they will be covering at some point or get squeezed with positive news.

Keeping a watchful eye on high short rations on penny stocks is one of my favourite strategies as all you need to do is sit and wait for the predictable spike to commence with the usual catalyst of positive news.

Of course sometimes the short position traders will start covering before any catalyst occurs which makes it more difficult to enter a trade and often it will be best to not enter a trade if this is the case.

Lessons learnt last week

One of the most important lessons learnt this week was to not only be prepared with your planned thesis on your stock picks, but to also know your stock inside out!

Knowing as much as you possibly can will give you a great advantage over a stock that you know little about.

You need to know how it reacts, what it’s past support and resistance levels have been as of recent, it’s credentials and of course why you have it on your list!

Now the $AVXL chart that I scribbled on below is my idea of what could happen next this week starting on the 23rd November 2015.

The red lines being that of technical resistance and the green ones support, my thesis is overall bearish at the moment and here’s why:

I believe that this stock spiked on the 18th due to the news release that morning at 7am which created a bit of a panic among the shorts by making them cover their positions which in turn made the stock price increase.

The very next trading day it started out with high volume again, dipped down to around $5.80 and bounced off of support back up to $6.50, but gradually faded for the rest of the day.

Notice how demand (Volume) has dramatically reduced around mid-day onwards on the 19th and even more so on the 20th, where it looks like the bears are gaining control.

It will be interesting to see if there is a consistent battle with a short happening and then a squeeze again this week, similar to that of $KBIO, but as the volume is fading I believe that the price will keep going down.

Of course if the volume picks up again we will likely see the short squeeze short pattern again, but you just have to wait and see what it does come market open.

Ideally I would like to see it bounce a little if I were to short it, but I could also go long if it holds support at the $5.45 area and has price action. Without volume you can not really make a trade on this, as it is harder to exit your position if you are going long, so if the volume is very choppy or low then all you can do is sit and wait or simply move on to another stock for the time being. Of course my bias is Short overall at the moment, so I would like it to spike a little possibly to the $6.20 area which is where I would attempt to short it if I were playing that move. For now I am just going to stick to the long side though and get consistent results with that first.

Lessons Learnt

Know your stock inside out
Know the past resistance and support levels
Only trade when there is volume in play (Price Action)
Be prepared to exit a trade when the stock does not do what you thought
Don’t EVER take your eye off an Open Trade!

What I’ve got my eye on this week so far: $AVXL $BIOS $MCUR $BONT $ZINC

With $AVXL and $BIOS being the main two stocks i’m watching, there will be others that most likely come along the way. I have not done enough research or homework on my list this weekend as i’ve been busy house hunting, and I will also be away in a meeting come market open today.

It’s ok to miss trades as there will always be opportunities and I am here to make consistent quality trades and not just role the dice in the hope to make money. As I have not planned enough to commence trading today (Monday) and I am waiting for my brokerage account to go live also, I am taking the time to sort other things out in my life which is cool.

So lets see what happens with the market this week, as it is said that thanks giving week is known to be historically active! Until next time, prepare yourself ahead of the action and be ready to trade with your stock picks and plan of action to trade, should your chosen picks react as you expected. 🙂

Mid Week Lessons learnt & Why I’m Confident To Trade

19th November 2015 by Christopher Leave a Comment

With having the first three days of freedom fly by so fast already, I’ve finally gotten the chance to focus on the stock market and be more prepared to trade with precision.

Unfortunately I am still waiting for my account to go live to commence trading, but so far I am very happy with the trades I’ve called mentally and how I will approach trading penny stocks once my account is good to go.

Just like a doctor or nurse practices and studies before treating a real live patient, I must do the same by testing what works and how to approach trading penny stocks before I treat and look after my patient! The patient being my money of course…Another good analogy from my mentor.

I could be frustrated that I’ve made several great calls without actually making any trades, but I feel great about the fact that I am on the right path with the right strategy thanks to my mentor Timothy Sykes.

I would never have understood or spotted these trades before I started learning from Tim.

So many traders get annoyed if they miss an opportunity to make money, and I personally don’t look at it like that!

If I miss a trading opportunity it will be because I was not prepared for it or did not know about it and that’s fine.

You can’t trade what you don’t see or understand.

So while carefully watching the market in general and of course keeping an eye on my list of penny stocks, this is what I spotted and learnt this week so far…

The 3 Main Stocks That picked up on my radar this Weak

Beginning On Monday it was actually Michael Goode that got me to notice the stock ticker symbol $KBIO in more detail. $KBIO is a biotech stock and it was the fact that it is, or should I say was going into liquidation that it caught my eye!

Funnily enough I was looking at this stock on the 5th/6th November, checking to see the reaction on its earnings release. Don’t believe me, then check out my post on it here(Scroll to the bottom of it).

With a public float of just over 4 million shares and around 8% of that being in a short position, this was a given catalyst that was going to create a short squeeze. Here’s the news article on it.

I’ve nick named this stock the “Pinball Stock” because that’s pretty much what it is this week! Literally you would get the short squeeze, then a short, a short squeeze, a short and then a short squeeze again which seemed predictable.

The thing is, with the news out that it’s going into liquidation got everyone thinking that it’s going to crack and plummet somewhere very soon, but then a crazy thing happens on the 18th November soon after the market close!

A hedge fund manager comes in and buys 1.2 million shares and the stock price ROCKETS from $2.07 after the market close to $19+ which is over 800%+ price increase!!!!!

Now this sort of thing can and does happen as we’ve just witnessed, but to know it’s coming is near impossible unless you have direct information with this kind of news, and it’s very hard to ride this spike after market close.

I was not considering entering a trade on this stock, simply because most people were biased on shorting it due to the liquidation news and rightfully so. Never the less it was fun to watch it move the way it did and learn more about what can happen to a stock with certain criteria in affect.

Here’s $KBIO getting Squeezed and Shorted continually since Monday 16th

$KBIO Short Squeeze Due To Liquidation Process

Then this news is released soon after the market close (click here) and this little floater launches into orbit 800%+!!!

$KBIO At Market Close

$KBIO Soon After Market Close!!!!!

$KBIO Before, During and After Market Close!!!

As awesome as it is to see a stock do this type of crazy super nova move, there is no way I would have been in this trade simply because of the news out that it was going into liquidation and everyone was preparing to short it! As always anything can happen in the stock market and you really can’t predict these kind of moves happening.

Having said that, I know of one trader that banked $14,000 with a position of just 1000 shares Long!! Looking at their entry position it was not a good trade at all as he/she should have cut their losses ages ago or even taken their profits early, but he/she crazily sat tight and held on with the hope that it spikes some more and got lucky!

Then again, maybe their plan was to hold, but with the liquidation news out it is most unlikely that this trader had a valued exit plan other than hope!

I don’t mean to slate this trader off as it is awesome that he/she banked big, but there is really nothing to learn from this trade other than how NOT to trade and just hope to get lucky, which is not a precise winning plan at all!

It is a very lucky trade for this person in my eyes, but maybe I am wrong and he/she had a different view to it.

Either way fair play to this trader for banking big and an awesome result for them. Screen shot he/she shared just below. Awesome result with just 1000 shares!

$KBIO Is another great example of how low supply (Small public float) can sky rocket with huge demand/volume and a tonne of shorts in position as well.

The Second Volatile Stock I Spotted was $AVXL

Now $AVXL was on Tim’s watch list and I took a look at it and noticed that there was a very consistent pattern every morning for the past 5 trading days. I even wrote a quick post about it on profitly before market open.

Here’s the chart:

My Thesis On $AVXL

I am on the same page as Tim and agree that this is a sketchy biotech stock and maybe even manipulated!

To trade a stock like this is risky UNLESS you have a catalyst, such as an earnings winner, big contract or positive news with facts.

It is interesting to see that looking at the chart above of $AVXL, how consistently it dipped and then spiked with relative volume at the market open for the past five trading days.
I prefer to trade stocks with news behind them that gives me a good reason to get into a trade.

The article I wrote on my profitly page I wrote at 6:30am, and at 7:00am a positive news release occurs and low and behold $AVXL reacts.

Had I been trading with my account up and ready (still waiting!) I would have waited for the break out and got in at $4.30ish and my exit would have been $4.65ish.

Here’s the technical chart with a 3 minute candles chart (18/11/2015)

With this stock on a bit of a down trend you want to wait to see if it breaks out going lower. As it failed to break out going down and held support, there was a good opportunity to get in with the anticipation of a break out going higher or simply by waiting for the breakout with the new morning high as long as there was volume to back it up, which there was.

So I have learnt that you can go long either by waiting for the break out or dip buying with a bounce off of support, but only when there’s factual positive news backing it.

The 3rd Stock I spotted was…

The third stock I spotted was that jolly old $YOD stock again! It’s earnings release came out which was no good at all, so no trade, but along with the earnings release was the news of a billionaire investor that of Bruno Wu which was and is positive news.

However low and behold nothing much materialised on this stock once again and so there would have been no trade to enter, as with very little or no REACTION to the stock there is nothing worth entering a trade for.

Remember that I trade reactions to earnings, contracts, billionaire plays etc and NOT what the numbers or some article says! This is one of the main key ingredients that Timothy Sykes has taught me and it seriously works time and time and time again!

What I’ve Learnt This Weak So Far:

Do homework the night before or early morning to pick up on any good news on watch list
Do technical Analysis on charts before market open with chosen picks (Support/Resistance etc)
Don’t worry about trades you miss, can’t see or don’t understand
The more I learn and understand, the more I get it and the more my confidence grows
Don’t take your eye off an open trade EVER or you risk losing it all!
A Small Float with Shorts in Position and a very Big Buyer can create the Super Nova effect
Be Prepared for news like this after the market close

Confidence is very much like a muscle; the more you work it the stronger and better it becomes.

Most of all even though I’m still not trading real money yet, I am very happy with my calls and thesis on these 3 picks in particular here. Several times I have concluded or thought the same thing as Tim, before he has commented on it or mentioned it in the chat room, and that’s not to say this in a look at me, big ego kinda way, but more so I know that I’m heading in the right direction with my trading and I have a strategic plan that works thanks to Tim..

It makes me feel confident to train myself by learning from Tim’s teachings and see that my thesis is correct. Of course I won’t always be right and don’t expect to be, but trading consistently well is the name of the game to success.

I aim to trade consistent quality trades with a planned thesis, as opposed to trading in the hope to make money!

On a final note for this post today, I learnt a great analogy from Tim:

“Just like a set of traffic lights, if you ignore the red light to stop you will likely crash!”

Too many traders enter a trade and when they get it wrong and go’s into the red, they carry on in the hope that they don’t get caught out and get to their destination quicker!

In other words if your trading plan is not going the way it should and it goes the other way against your thesis,

… YOU MUST CUT LOSSES NO MATTER WHAT YOU THINK… !!!

For the final final note today, anyone that’s unsure of what an earnings winner is, there’s a great video of Tim explaining it just below… Enjoy 🙂

How My Goal Of Trading Penny Stocks Is Now A Reality!

14th November 2015 by Christopher Leave a Comment

So now that my day job of delivering parcels has finished, I’m now in the position to commence trading and start living my life of freedom.

I made my decision to exit my day job two months ago, and I have been studying several trading strategies while also working hard-setting up this website since June time.

So now that I have finally finished my day job, trading penny stocks instead is now very much about to become a reality!

With lots to do and prepare before trading starts, I also have many other things to sort out away from the stock market and looking for somewhere else to live is unfortunately one of them!

With having to move home it does put more pressure on things, which also means that I will have to be very organised with my trading and fully prepared for the market in order to profit as much as possible with the strategies I’ve learned.

Meanwhile though I have been searching for the best broker to use, as although my mentor does recommend E-Trade and Interactive Brokers as two of the best brokers to use for penny stock trading, I can not use either of them.

E-Trade is now only available to use for American Citizens based in the United States and Interactive Brokers can only be used with a minimum start up account of $10,000.

Once I have increased my account to 10K+ I may move over to Interactive Brokers, but for now I have chosen to set up my trading account with OptionsXpress.

When I made my first ever trade back in August which was a fail by the way, I was using an English brokerage account and I can not say how terrible they are! I will not name them as there is no point, but when I made my first trade I thankfully learnt several of the most important lessons right away!

As it is the American market that I’m going to be trading, it is more advisable to use an american based brokerage firm, mainly due to the exchange rate, but also because they will have more stocks available to trade for the american market.

Challenges Ahead & How I Will Cope

I am fully aware that what I have put myself up for and how I am going to cope is definitely going to be a challenge, and I certainly don’t expect it to be smooth sailing. When did a sailor become a great sailor with a smooth ocean anyhow?!

Being prepared to trade does not merely mean sitting at my computer all day and waiting to see what happens in the market!

I will have done my homework each and every night, the night before the next trading day. Of course this does not mean that I spot everything and missing trades is going to happen no matter how ready I am.

By disciplining myself to only trade what sticks to my search criteria, this will narrow my targets down to precise strategies that will give me far better odds of success.

It would be all to easy to get over excited about trading stocks, in the hopes for fast big profits with a high amount of adrenalin rushing to the head!

One of my main rules is to trade exceptionally well and not just trade in the hope to make money!

Trading failure results from executing trading decisions based on the desire to make money, rather than a desire to trade well.

So while having to look for a new home to live, as well as being prepared to trade I feel that the best way to be successful at this game is to be prepared, but most importantly be disciplined with my strategies and trading goals.

I will not worry about the amount of profits, but I will focus on the risk/reward factor when placing any trades as I know that this is a long haul game and not just a fast sprint with the “lets hope for the best” mentality!

What The Market’s Up To Right Now

It is inevitable that in this long term bull market that we have been in, somewhere along the line we are going to have another crash or correction! No one knows exactly when it will be, but there are lots of signs at the moment with the market overall being slow right now and people starting to be more cautious with buying.

The NASDAQ, looking at it’s peek again since around the year 2000 is likely the main reason for the cautiousness of traders and the general market slowing down. Psychology of trading and traders is what makes the stock market tick!

The NASDAQ is at it’s Peak!

NASDAQ Yearly Performance since the year 2000

It really does not matter whether we are in a bull market or a bear market as there are always opportunities available and profits to be made. Being prepared for what’s ahead is key to making the best trading decisions and often the best type of trading decision to make will be NO trade at all!

With my trading account set up, I just have to wire money over to it which can take up to five working days. In the mean time I am going to use my first week to actually watch the market focused, with out having a day job in the way!

There is a potential opportunity with $SYPR as it has just secured a new contract deal as a major supplier for the Volvo automobile corporation.

The volume for this stock has been very quiet as of recent, but this is how the penny stock game works and why you get these spikes as apposed to consistent up and/or down trends like you get with major big companies like Apple or Google for instance.

Most importantly the past performance of this stock proves that it can spike decently with positive news.

If was to trade this on Monday I would wait for the market to open on the 16th November 2015 to see if there is any price action, and either piggy back a price increase before it hits $2.00 OR wait for a potential dip buy if it goes the other way. I would be looking to make 20-30 cents profit on this trade.

I’m not convinced that it will go past $2.00 unless there’s some big buyers in the room, but what ever happens it will be interesting to see how $SYPR reacts in this ugly looking market right now.

I honestly don’t know what this stock will do, whether it will spike some more again or slump back down. Waiting to see what this stock does first with price action is how you need to know whether to get into a trade or not. Remember that the market is always right and my thoughts or opinions are irrelevant whether I’m right or wrong.

So it is stock price action that I trade into and not my opinions of what I think about any stock!

Once my account is funded I can commence trading, but until then I will keep my eye on the market and do mental/paper trades and enjoy my first week of freedom doing what I want to do! 🙂

Oh and by the way, once leaving my day job it felt kinda strange at first, but once I got home it was bliss knowing that I’ve got more than just two days to enjoy before normally having to go back to work! 🙂

On a final note I can not thank every one enough for supporting me and wishing me all the best success on my new adventure. Especially my boss KTR or the Sheriff as I call him, as if it wasn’t for him I would not have been driven or inspired to pick myself up to embark on this journey! So here’s to you Sheriff 😉

I hope I inspire any of you that read my blog here and I hope you all realise that anything is possible when you want it bad enough!

My Final Day At Work with Less Than 24 Hours Left!

12th November 2015 by Christopher Leave a Comment

Well who would have thought that the final day at my day job with UK Mail is finally here! With really only twenty four hours left to go, it feels so sa-real that I am actually going to be trading penny stocks instead of delivering parcels very shortly! Pun intended! lol

As I’ve said before in previous posts, I have no problem with delivering parcels at all and it’s actually quite fun to meet different people with this kinda job.

A job is a job and to me it has been a stepping stone and given real perspective on my life and most importantly it’s made me appreciate how valuable time really is.

I will miss it, but my ambition is not in grinding away delivering parcels, but something much bigger! The bigger picture for me of course is freedom!

I think the Quality of a person’s Life is in direct proportion to what you go for, regardless of your chosen endeavour.

In other words, you need to know what you really want in order to get what you want and be happy! Money doesn’t make you happy, purpose and self fulfilment does.

Anyways enough jibber jabber on what I think, lets look at the stock market this week so far…

Overall Market Outlook — YIKES THE MARKET’S LOOKING RATHER RED THIS WEEK AND TODAY!!!

There hasn’t been all that many exciting opportunities this week with the kind of plays that I look for, and the market in general has been quite slow recently. Could this be a sign of the next crash about to happen?

Today being the 12th November 2015, looking at the overall market with the ticker symbols above you can see that there is very little buying activity going on, which to most people and stock traders would be a bad sign.

To me however, it doesn’t matter whether the market is going up or down, all that matters is that I’m on the right side!

While delivering parcels in my final week I have had my eye on a few possibilities with earnings releases and potential breakouts and news releases, but nothing has proved itself to have placed any trades if I had been trading for reel.

The best opportunity I saw is that of $EYEG today, which I actually missed the action on and even though it’s on my watch list I had not studied the past performance of this stock to understand it better, and I was not prepared for it to breakout.

$EYEG 12th November 2015 — $EYEG On a weekly chart with 15 minute candles

My lesson learnt on this stock is to be prepared for breakouts and see them happening before they happen by being prepared for it!! Make sense?!

I have not analysed this stock that much on it’s past performance yet and this is a valued lesson learnt, to be prepared before spikes like this happen. As I did not have my eye on this stock I missed the early gap up due to their third quarter earnings release, but having said that I actually think that the chances of getting into this trade would have been very slim.

Looking at the one minute candle chart below, you can see how fast this stock reacted to the market, and also how quickly it faded to no action at all!

So although I have drawn pretty arrows and diagrams on this chart to explain the potential trade that could have happened by being prepared for it, I would have most likely missed this opportunity regardless of what I’ve pointed out here.

$EYEG Day Chart with 1 minute candles 12th November 2015

I also noticed $YOD had some good news today, but as often as usual with this stock it seems, not much happened with it and there was very little reaction to today’s release.

$XOMA broke out again on the Tuesday, but I did not spot it this time as I had over 100 stops delivering parcels that day!

All in all I have not been able to pay close attention to the stock market this week, but this is all about to change. 🙂

So with just a small and quick look on the market today and this week, reality is just around the corner as I gear up next week and set up my trading account to trade penny stocks for reel. I’m in no crazy rush to trade trade trade!!

I am going to set myself up to trade successfully by being disciplined and I have got a lot of work ahead me.

Heck, I may even take a day off next week as my reward for getting this far!

On my final day at work I am going to enjoy it and cherish the fun times I’ve had and good people I’ve meat along the way, and probably play “What a Wonderful World” by Louis Armstrong as I set out the depot tomorrow morning to deliver parcels for the final time…

What a week it’s been for the penny stocking World! IF ONLY!…

7th November 2015 by Christopher Leave a Comment

Hindsight is a real mother whatsit and it’s all very well wishing you could have traded x,y and z stock before it spiked big, but there is no point at all in saying such nonsense as you will always miss some trades no matter how prepared and ready you are.

I have only five working days left at my day job before I start trading full time, and I am fully aware that I am going to miss trades along the way and I’m also not going to get it right all the time.

In the stock market game you can not afford to get greedy by trying to trade every stock that you see go up, but you must be prepared as much as possible by waiting for movement on your stock picks.

When I’m up and running, my watch list below will be my general guide as to what I trade, as all the stocks on my list I have hand picked myself to keep an eye on for various reasons. Of course I will add and change some of these picks along the way as well as listen to what my mentor Timothy Sykes says and has discovered too.

Here’s What Spiked this week (2/Nov/15-6/Nov/15)

$BIOS Earnings Release (Earnings Winner)

Now before I say anything else, I am fully aware that it is all very well detailing what’s happened in the past, but we shall just have to wait and see what happens when I trade for real in the future!

Remember, I am NOT an expert or a teacher of penny stocks or anything at all in the stock market game. I am just a normal guy that is fighting for his freedom and I know what I want!

So I am a student and not a teacher, but everything I write about and do is all based on what I’ve learnt along the way, with my own opinion of what works best for me.

So while delivering parcels at my day job, I was doing my best to keep an eye on the stock market for training purposes and I had several picks that I thought could spike for different reasons.

The first one I was watching was $BIOS, which had it’s earnings release on November 4th before market open.

With a positive earnings release I would have been ready and waiting to trade had I been at my laptop, but alas I was delivering parcels! Being prepared is the number one key to successful trading.

As you can see in the chart below $BIOS spiked at the market open on 4th November within the first fifteen minutes, and my goal had I entered a trade would have been around $2.30. If I’d gotten my position executed I would have made my 7-11% goal of profits and exited at around $2.55ish. So it could have been around 25 cents or a $250 profit with a 1000 shares in play.

With earnings winners, there is often the potential and possibility to dip buy later in the day if you missed getting your morning trade executed. As you can see by looking at the chart above, it pulled back to the $2.40 area and then picked up again, but started to fade towards the market close.

So there was more than one opportunity to enter your trade here. If you’re into shorting stocks then there was the other opportunity of shorting right into resistance with the morning spike, but I personally haven’t studied enough on this strategy yet, but will do once I have mastered the simpler trading strategies first. I know this is one of Tim Gritanni’s main strategy’s though, and he’s been mega successful with it.

With the high amount of shorts in play, it will be interesting to see if this goes past the $2.80 area and spikes above the $3.00 area with a short squeeze next week. Looking at the past chart performance of this stock, it is showing signs of an up trend as it is near it’s lowest price point, but anything is possible at this point. $BIOS is worth keeping an eye on for any more news and break outs, but you have to wait to see what the market does to it and NOT trade by just predicting what you think.

~The Market Is Always Right And You Are Just A Tiny Little Number Below Zero!~

$XOMA Short Squeeze & Earnings Release (Earnings Loser)

With $XOMA I noticed there was big price action happening on the 27th October which I think was due to this news release. Either way there appeared to be a short squeeze happening. Looking at the chart below you can see that it spiked on the 27th October, which was possibly due to the news the previous day. This chart just below is on a daily candle chart, so every candle represents one trading day.

Notice the tiny little green candle on Friday 30th October. Sign of support perhaps?

Now looking at the 15 minute chart view you can see the breakout happen, opening on Monday 2nd November and also you can see the increase in volume too. Interestingly when the earnings release came out on the 5th after the market close it gapped down due to no good reports on it’s finances and sales. So it was NOT an earnings winner.

$XOMA 15 minute candle chart — 15 Minute Chart Candles

Just to prove I had my eye on $XOMA before it spiked I posted a comment on my profitly wall as you can see below.

So again if I was prepared by being at my laptop instead of delivering parcels I could have made a trade here and it could have gone like this: I would have waited to see if there was any price action at the market open, which there was and waited to see if it broke past the $1.30 area. As it did, I would have attempted to enter my trade around $1.33ish and PLANNED my exit with my 7-11% profit goal at around $1.45-$1.50ish with 1000 shares in position. Keeping an eye on price action is vital to knowing when to get in and out of a trade, as you can see price increase and price fade by looking at level 2 action.

So this could have been around 17 cents profit or $170 gain give or take.

Surprisingly the very next day it spiked even more with fierce price action and loads of volume, so I could have potentially made another trade.

By being prepared, ready and waiting for a possible breakout on the 3rd November which was $1.65ish, I’d have been exiting at around $1.80ish with my PLANNED exit of 7-11% profit goal. so could have been around $150 profit with 1000 share position.

Although $XOMA is NOT my ideal pick that I go for, it has loads of potential for the short squeeze which is exactly what happened here. The main reason it’s not my best pick is that it has quite a large float which means that it generally requires a lot of volume in order to change the price quite a bit, but it is still tradable none the less.

$UNXL Vague news (SHORT Position)

I won’t go in to too much detail with this one as I’m still studying the Long game in more detail before attempting any Short trades. However I saw a news release on the 2nd November about a possible pre-production contract, and to me it meant nothing in order to attempt entering any long trades, as there were no facts or positive news as such other than rumours. Also this stock has a history of NOT holding it’s spikes, which is a good sign when to short a stock. So I would have been ready to short this one if I was ready and prepared.

$BNSO Nano Cap (Great Example)

Now this stock was NOT on my radar and I did NOT spot this one spiking in the morning as I didn’t watch anything on Tuesday 3rd November as I was mega busy delivering parcels.

$BNSO is a great example of how a nano cap stock with a very small public float and a positive earnings release or news can make a stock spike like this. I have now added this one to my watch list for future possible trades, should there be any criteria that fits my strategy to trade it.

Here’s the chart below of what happened to this stock anyway(Notice the increase of volume in demand):

$BNSO Spike is a Great Example of a Small Public Float Stock in Demand!

$VVUS Earnings Release (Earnings Loser)

I will still keep my eye on this stock as with the billionaire play involved in this stock, it has the potential to spike again, but until something decent happens with news as a catalyst or good earnings release, it is untradable. Due to it’s earnings release on 4th November I had my eye on it, but no good news meant no trade to enter anyway, so not much more to say on this stock at the moment.

$PHMD Earnings Release (Earnings Loser)

This stock has rather low volume for a potential trade, but with a decent volume increase from good news it would make it tradable within reason. No worthy action to trade it yet though. It needs a good catalyst to create any action I feel.

$KBIO Earnings Release (Has been delayed) – BEST EXAMPLE OF THE WEEK!

This pick had it’s earnings release due on the 6th November before the market open, but due to this news the day before, it has put it’s release on hold until a further date in the future. Low and behold it gapped down, and I want to point out that this result is an EXCELLENT example as to why you do NOT enter your buying position before earnings release in the anticipation that it is going to be positive.

This is also a great example why I don’t like the buy and hold what ever happens concept!

$KBIO Is a Great Example of why NOT to buy before earnings release — $KBIO Is a Great Example of why NOT to buy before the earnings release

To top things off with what’s happened this week there were several others that spiked again, like that of $ERII, but the other notable one is $WTW which has just been backed by another billionaire, which is that of Steven A. Cohen.

Will be interesting to see how $WTW behaves next week, although I would not be trading it personally unless I could afford at least a 1000 share position or even just 500 to make it worth while to trade. It is also NOT a penny stock any more! Well duurrh!! lol

Rounding Things Up

So I’ve seen some great things this week, but here are the main lessons I’ve learnt in a nut shell:

Be prepared ahead of the market
Don’t EVER buy before earnings release
Accept that you will sometimes miss trades
If your trade does not get executed, then wait for a possible dip buy late in the day
Trade what the market does and NOT what you think
ALWAYS enter your trade with your exit goal FIRST

So with my final week at my day job it’s going to be so sa-real with reality as to how I’ve got to this point and it’s actually finally going to happen!

As I’ve said before I am just a student and I could flop at this, but I’ve got this far and I am going to work my ass off to succeed at trading penny stocks with the help of Timothy Sykes and a few others.

Until next time, keep warm as it’s definitely getting chilly with winter approaching, and start believing that you can do anything that you put your mind and heart into so long as you really want it. If I can do it then so can YOU! 😉