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The Adventures Of A Futures Trader

The Good, The Bad and…… The Pretty!

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Teach A Man To Fish!Well as this week’s flown by it has been yet another one where the overall market is down in the red. As I said in the last post where I made My First Ever Green Trade, it does not matter which direction the market is heading as there’s money that can be made every single trading day. I’ve made no trades this week as I’ve been busy sorting out the big house move which is finally happening at the end of this month! Hoorah! Very exciting with lots still to do!

Although I have been juggling life and sorting various things out away from trading, I still keep a watchful eye on the stock market and study where I can, as well as constantly learn more from Tim Sykes every day. I will soon do a review on Tim and Profitly to prove that the value he gives is ridiculously priced and should be ten times what he charges, but I’m not complaining!

So anyway, there have been a few good plays that were possible this week and the best one was that of $ZFGN which I was right on top of before it spiked and ready to trade, but as it was in the $8 mark I told myself that it was too high priced to trade with my small account. I could have made $300 to $600 potentially if I’d have entered my trade, but that’s hindsight for you!

Any hows I wanted to do a quick simple post on learning to trade good set ups, hence the title name for this post! So lets get on with the shoooooow 🙂

How To Take Consistent Good Trades

Like all traders everyone has their own personal set up with what works best for them and it differs from trader to trader…… well unless your a sheep trader!!

As I continually refine my trading set up which will always be the case as you never stop improving, I have discovered a consistent set up that works for me.

Yes I still only have one winning trade out of four trades so far, but I know that I am on the right track and onto a consistent winning strategy!

As mentioned in a previous post, I noted that I was personally finding the level 2 tool more of a hindrance than a helpful one. It is by trial and error that you discover what works best so long as you adjust things so that you’re not just banging your head against wall street while hoping for a different result!

So while discovering what works best for me I have found that I get the same results every time when these key factors appear and my trading signals are in place! I will go into much more detail once I have some more proof with successful trades to share. Sorry to be this secretive, but I still need more successful trades to prove it first.

What I will say is that “Break Outs” are appearing to be the most lucrative form of play and implimented strategy for me!

Now having a good trade set up and strategy that works is essential, but of course the big key to pulling off good trades no matter what your strategy is, is getting to the stock before it spikes.

The strategy that I’m fine tuning I have learnt and continue to learn from Timothy Sykes so it is not my very own or anything new. What I have done though is tested out how to trade morning spikes with different tools to know when to enter these types of stocks that spike before it is too late and also when to exit.

It is only through trial and error that you really find out what works best, much the same as when you buy a new iphone, television or any other gadget for that matter you have to take some time out to figure out what all the buttons do, so you then know how to use it properly! Simples right?!

So while I’ve been adjusting certain settings to the two tools I use (Ichimoku and Keltner) I’ve also discovered that it works with currency pairs.

I still intend to stick to trading penny stocks over all, but I am also learning about other financial instruments which are very active that does spark my interest to master trading them, but lets master one step at a time first!

Oh Yeah, I Also Turned $2000 into $4000 This Week!!

Now before we all go crazy on this heading, these figures are only in virtual money! Shucks I know, but there is great progress and excitement as to how I did it!

It is not the sum of money that I created in such a short time that excites me, but more over how I did it as I can do the exact same thing with real money! I stuck to the same strategy through out and I did NOT increase my risk with how much money I put on the line to lose.

I was close to being right 75% and actually better as I was mostly testing out and fine tuning with what works and what doesn’t work. Funnily enough it is Timothy Sykes’ methods that I have applied to trading this!

So believe it or not it is actually through trading binary options that I have been fine tuning my technique with virtual money. By doing this I can get better at entering and exiting trades while using the ichimoku and keltner channel and testing out what works best. It doesn’t really matter whether you’re using these two tools to trade stocks, currencies or even commodities as the principles remain the same with a few little tweaks here and there of course.

I highly recommend NOT I repeat NOT to trade binary options as you will get burned if you are totally new to it or don’t know what you are doing! I dabbled with a couple hundred bucks and attempted binary options a good six years ago or so with no knowledge, plan or even strategy other than go with the trend!! I was an uneducated sheep back then and now I am the sniper that only takes shots when the right set up and signals are in place to trade it!

I will share my technique and strategy once I have some solid successful trades with real money to prove it. So yeah this is a bit of a wishy washy post overall, but I just wanted to share with you that I’m continually improving my winning trading strategy and I will keep doing this so that I can show you what works and what doesn’t work and hopefully inspire you along the way! 😉

Another Key Ingredient To Successful Trading

I named this post as “The Good, The Bad and The Pretty” as I wanted to get the point across of what it takes to become a good trader, but also what a good trade set up looks like with the strategy I am mastering.

To become an excelled trader takes many many many hours of studying and learning what works in the stock market, but this can also be speeded up by learning from ONLY the best that can prove it like that of Timothy Sykes which is what I’m doing.

Besides learning from the very best like Tim, I am honing in on my own style and unique formula that works best for me, so that I am fully self sufficient.

~Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime~

In order for me to be successful at trading I am thinking for myself as opposed to just wanting hot stock picks to make money with! I listen to Tim and study his techniques every single day, but once the market opens I trade with my own entry and exit plans.

So you see there are many bad traders out there, and statistics say that about 90% of traders lose their money consistently well! There are many reasons why this is the case, but the main reason for this is because they have not got a winning strategy, have learnt the wrong methods and lack discipline of the number 1 rule which is to cut losses quickly!

Rounding this post Up

As I gear up to move into my new home this coming week and I set sail, ship and anchor, I will still be looking to trade at the market open, but only if the right set up presents itself.

To finish off and keep things interesting, here’s a couple of very pretty charts that are the ones I look to trade before they spike like this!

I will share what good ones and bad ones look like all in good time and explain how it all works.

Until next time, enjoy the final week of January 2016 and stay tuned for…… 🙂

$ZFGN Super Nova

$EGHT same pattern as $CDRB

How I Made My FIRST GREEN TRADE As The Markets Crash!

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Aristotle QuoteToday is the 18th January 2016 and it is Martin Luther King Jr’s birthday.

The “US” stock market is closed, as we give respect to Martin Luther King and rightfully so! He would have been 87 today, so lets not forget what he accomplished and how his passion to change the world of mankind for the better of everyone, regardless of race, colour or country still stands strong today. Civilisation has come a long way since the 1960’s, but boy does humanity need to stop fighting over one another for supreme supremacy!

Any way’s that’s a different topic for another blogger to write about, so lets get on with the show!

While it has been a statistically bad start to the year for the overall market as a whole, I have managed to pull off my FIRST EVER GREEN TRADE in a bear market and here’s how I did it:

First You Need To Know This Important Fact!

As the market is down roughly 10% on the year so far, many traders and people in general are starting to panic that we are heading into a bear market, and maybe we are and then again maybe we aren’t!!

Overall Market Outlook 15th Jan 2016
How The Overall Stock Market Looked on 15th Jan 2016

The absolute truth is, it doesn’t matter at all what the stock market is doing as a whole! Smart traders have their own thesis and trade individual stocks, where as dumb uneducated traders follow the crowd!

The number one BIG key secret to trading successfully, is that no matter what the market is doing and no matter what the media or so called experts tell you, it really really really does not matter! You can make money regardless as to whether the stock market is going up or going down, as there are opportunities in the stock market every single day that it’s open to trade!

Every single company listed on the stock market goes up in price or down in price, based on the supply and demand of any given stock. Trading the stock market is about psychology of how people react to any given information based on a positive or negative possible outcome and/or sometimes manipulation!

It doesn’t matter to me what the market is doing at all. All I look for are solid break outs with pre market percentage gainers that fit my selective criteria, that I’v learnt all from Tim Sykes.

If you want to make money trading penny stocks then you have to think for yourself about what to trade and how to trade it, but first you need to learn how to do it, and the best way to success is to learn from those that have a proven track record, but you better make sure that they can prove it 110%! So now that you know that little truth, here’s how I made my first ever green trade on Friday 15th January 2016! 🙂

How I Made My First Green Trade

While I’ve been fine tuning and working on my trading set up, I’ve also been analysing what to look for when a stock does react, where and also when the best opportunity to get into a trade is.

I’ve witnessed several penny stocks spike this year all ready, and I could have made money on some of them if I’d have entered a trade. However, as I’m still in the fine tuning process I have needed to take a watching position to see how things go with my set up, so I can see how effective I can be.

Being prepared before the market open is vital to catching a stock before it spikes at the market open, otherwise you will end up being too late and miss the biggest part of the spike.

Of course you’re not always going to get it right and missing the action is going to happen some times, but you must be prepared to accept missing out at times and NOT go in with the chasing mentality, or you risk getting caught out in the decline phase!

I was fully prepared to trade on Friday morning and I had even done some virtual trades a few hours before, just to get my eye in with my trading strategy and get comfortable with pulling the trigger!

Just before market open there were several pre market percentage gainers with volume, but most of them were too high priced for me to consider with my small account or the float was not to my liking.

Two minutes before the market open, Tim Sykes mentioned $CDRB as a pre market mover, which was not on my list. So I quickly checked out the details of this stock before the market open, and everything fitted the morning spike criteria, that being of a small float, small cap and has a history of spiking.

I added $CDRB to my watch list in my brokerage account and it was near the top of my list already as a percentage gainer.

So all I had to do was put in my trade order ready and waiting to pull the trigger if there was any price action at the bell.

Low and behold as the bell rang there was immediate action and all I had to do was wait to see if the second candle closes above the morning open (First Candle) which it did. The momentum was there, the price action was there as well as the volume so I pulled the trigger.

I only put in 300 shares to trade with a target of 30 cents profit to exit on, as I’m learning that in order to grow your account, you must take small positions first to gain momentum and increase your account size one trade at a time. Once I’ve achieved consistent results with my small trades and increased the size of my account, then I will increase the share size order.

Don’t focus on the amount of money you want to make or setting goals to make “X” amount of money by a certain time, just take one trade at a time and go in with a specific plan on EVERY SINGLE TRADE you take.

I entered my market order at 09:32:29 and it should have been executed just below the $4 mark, but it didn’t get executed until almost a minute later! That’s how fast this stock was moving! Finally it said my order was filled and all I had to do was watch as the stock price rocketed from $4 to nearly $5 within a minute or so! My entry got filled at $4.14.

My profit target of 30 cents had been meat and some! So I quickly put in my order to sell 300 shares right away, and again I had to wait another minute or so for it to get filled! I really thought there was something wrong with my broker and was worried that my order wasn’t going to get filled until it came right back down again!

Finally my sell order was partially filled and then soon after the rest was also complete at $4.70! Mission accomplished! I finally achieved my first ever green trade for a 56 cents gain or $140 profit after commissions. One of the best feelings ever let me tell you! 🙂

$CDRB Trade Proof & Profit
$CDRB Trade Proof & Profit

My FIRST EVER GREEN TRADE Chart!

MY FIRST EVER GREEN TRADE at my 4th Attempt!

What I’ve Learnt From My First Green Trade

  • You MUST be prepared and ready to trade before the market open with your stock picks
  • Trade small when starting out and go in with a plan ALWAYS
  • ALWAYS have an exit target and be prepared to exit early if momentum or thesis changes
  • It’s ok to make little adjustments to your trading set up as long as you can see that there is improvement to be done

So while noting down these 4 bullet points  with what I’ve learnt, the main problem that hindered me was not having more than one screen to analyse the stock chart as well as the price increase through my brokerage account.

This stock spiked so fast that I was intensely ready to put in my sell order and lock in profits rather too soon! I would rather lock in profits too soon at this stage though as i am still only at the very beginning with my small account.

If I’d have held on for another 2 minutes I could have made at least another 50 cents or more profit on my position, but having said that there was a moment where the momentum was changing and the candle on my chart had I looked at it was telling me to sell any way!

I am just trading with a cheap lap top at the moment, so it is a bit limiting as to how much stuff I can do at once.

I will soon invest in a desktop computer and have 3 screens attached to it so I can watch the chart and the price action all at the same time 🙂

Oh yeah I forgot to mention that I did NOT use level 2 at all to make this trade. I simply used Ichimoku, KC and Heiken Ashi candles with a few tweaks to give me my entry and exit targets! I will reveal more once I have successfully traded more, but for now I am still in the tuning process.

So all thanks to Timothy Sykes for notifying me of $CDRB that I got my first green trade under way. I have learnt everything from Tim how to trade like this with a few tweaks, but without Tim I most likely would have missed this trade all together and gotten to the action a minute or two too late!

I Also Got Rated As the Student Of The Day!

What’s really cool from placing my first trade is that Tim also mentioned me in a follow up video just below as “The Student Of The Day” which he gives out to those that have learnt the most or improved the most.

It is a small step to have made $140, but it’s still more than what I made at my day job delivering parcels and boy is it a huge step in confidence and moral for me. I feel truly humbled and honoured to be called out by my mentor. So thank you Tim. This is just the beginning phase for me, but I will be one of your next millionaire students. If Tim Gritanni can do it and Mathew Owens too then so can I. 🙂

Having studied so much and gotten this far with lots still to learn I am ready to continue and fine tune my trading set up even more with one trade at a time.

So starting out tomorrow morning I will be prepared and ready to trade again, and waiting for any reaction to penny stocks that have the potential for morning spikes.

So my first green trade is a wrap and it’s now on to the next one…… Rinse and Repeat 🙂

Here’s the great video of Tim showing you what works……

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

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Confidence Grows By Learning and Understanding From the BestWith 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
$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 At Market Close

$KBIO Soon After Market Close!!!!!

$KBIO After Market Close

$KBIO Before, During and 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.

Lucky Trader Banks $14,000!!!

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:

$AVXL Morning Pattern (RISKY!)

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) 

$AVXL Technical Break Out Analisys

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 🙂

Dip Buying Penny Stocks For Low Risk & Higher Reward

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My Mentor Professor Timothy Sykes
My Mentor Professor Timothy Sykes

Following on from my last article on the Cup and Handle Pattern I want to get a better grasp on Dip Buying.

Just like buying a house, a car or even an antique at an auction, you don’t want to pay maximum dollar for it with your bid, only for there to be very little upside in price/value. This applies to stocks as well.

Now of course you could be a long term investor instead or a bag holder as many of us like to call it, and hold on to your stock for years in the hope that it makes you lots of money over a period of time.

I don’t like the word “hope” and especially not in the stock market game.

In order to get the best price for your stock, you must have a determined and predefined strategy before you put in your bid/ask order, and the same applies when you short sell as well.

So with a planned strategy in position that you stick to, you are far more likely to be a consistent profitable trader and safer one too.

It was actually by spotting $ACPW (Active Power Inc) today (27th Oct 2015) that made me want to get into more precise detail about Dip Buying.

While quickly screening with finviz, I looked for earnings release dates for today that fit my stock pick criteria, and although only 5 came up I liked the chart pattern of $ACPW.

Even though I’m not trading until November time; yes I know I keep saying that, but I like to be transparent so that you know I’m still learning even though I’m not trading.

~You can’t expect to succeed in anything without consistently practising, Until it becomes effortless~

So while still doing my day job delivering parcels, I had my kindle in front of me to keep an eye on the earnings release for $ACPW to see whether it would be positive or not. You can see my screen shots and more on Profitly.

Trying To Keep An Eye On $ACPW With Level 2 While Delivering Parcels!

My day job delivering parcels

As you can see below, I have to admit that the chart for Active Power Inc is NOT the best with regards to volume or volatility, but there is enough activity there to make a spike of a small degree with good news and volume. With the news of an earnings release coming out for $ACPW, I wanted to see what could happen with positive news on this stock pick.

Simple Chart of $ACPW (27/10/15) on Fiviz.com

$ACPW (Activ Power Inc)

The Earnings Release was reported before market open and is an earnings winner, as it has positive news. I couldn’t spot any bad press in their statement at all.

With an earnings winner you would anticipate and expect it to spike up right after the market open, but surprisingly it did the opposite and plunged from $1.67 to $1.42 in about the first 30 minutes of trading.

With trading the stock market you’ve got to understand that there is NEVER any guarantee as to what happens next with any stock, and this is why you need more than one plan when you’ve got your eye on a certain stock that you want to trade.

Due to my day job (13 working days left to go 🙂 ), it is very difficult for me to be able to study everything and see all the news releases as they happen right away, as well as be focused on what the share price is doing with any give stock.

When I start trading in November I will be able to prepare and be 110% focused on trading.

If I was able to research $ACPW more thoroughly I would have been able to plan a strategy that would set me up to trade this stock if certain dips happen and opportunities occur.

I’m glad I have seen this stock do what it did today, because it has taught me to have more than one plan of action prepared before considering any trade at all.

If you take a look at the next chart below from this free software, you can see in better detail  with 5 minute candles as to what happened to Active Power Inc today.

5 Minute Candle Chart Of $ACPW

$ACPW 5 Minute chart 27/10/15

Looking at the above chart there is not really all that much information that you can get from it besides that the share price dropped 25 cents after the market open and then bounced back up to hit a daily high of $1.72.

If on the other hand you looked at the monthly chart of this month being October, you can see the potential opportunity much better.

Month Of October With Green Support Line At $1.44/$1.45 ish

$ACPW Dip Buy On Positive Earnings Release

So by looking back at how the past month has gone, you can see that there is support at around the $1.47 area. I have drawn a green line at the $1.44/$1.45 area as an approximate mid-point line for support.

By witnessing $ACPW behave how it did today has better tuned me in, to have not just one plan of action, but three!

So instead of being prepared before I make a trade and saying that I will wait for “XYZ” to do this before I place my trade, I am going to say:

  • If “XYZ” Stock does this, then I will buy/sell it at this price.
  • If “XYZ” Stock does that, then I will buy/sell it at this price.
  • If “XYZ” Stock does neither, then I will do nothing!

By doing your homework and seeing where PAST support/resistance is you can improve your risk/reward ratio greatly. As there is never any guarantee as to what any stock will precisely do, you have to have a plan of what to do if it does the opposite or nothing at all!

So with this idea, if I had planned to trade $ACPW with this new idea in mind, it would go like this:

I have seen the positive earnings release now so I would be looking to go Long, and all I need to do is wait for the market to open to see if I can piggy back a moving up spike/breakout or whether I need to wait for a Dip Buy.

As soon as the market opens, I wait to see where the price action is and how many buyers/sellers are in the room.

So while watching my level 2 screen I would see that there are more sellers than buyers in the room and would also see the price start to fall with $ACPW.

As I’ve done my homework I would know that there is past support at $1.50, but the more solid support is around the $1.45 area so I could wait to see if it goes this far. I am also able to see what’s going on with sellers and buyers from my level 2 screen, so I can see which support level is stronger quite quickly.

With the more solid support being the planned result I would wait for buyers to appear to drive the price up on this earnings winner.

It goes as low as $1.42 and that’s ok as I would still be waiting to see if any buyers appear, and sure enough they do. So I would have tried to enter my Dip Buy on a Long position at a $1.50, but still prepared to cut losses if it goes back down to $1.45. So lets say I got my £1.50 price just for this example.

If I got in at $1.50 I would be looking to make 20 to 30 cents on this, but ready to exit my position if the price starts to fade. As it has done very little for the rest of the day I would have exited my position at $1.65ish.

My mentor Timothy Sykes has taught me to play it safe when not much is happening, as this can be a sign of weakness.

I know this is only a hypothetical thesis, but by doing this I am training myself how to trade as though this was a real live trade.

Lessons Learnt

So new lesson learnt is to have support Dip Buy Targets for Longs or Short Trades, as well as the original plan of piggy backing price movement on positive news, earnings winners, big contracts or billionaire plays.

Just remember that if “XYZ” Stock does NOT do what you had planned it would, or does not go to your support target, then you do NOTHING!

So buying stocks at lower prices with solid support levels and positive news in play is a good place to Dip Buy, as the potential reward is higher than the level of risk.

Still be prepared to cut losses quickly if it fades back down.

~Don’t worry about Profits, but know your Risk/Reward Targets~

It will be interesting to see if this stock spikes much over the next few days, but needs some solid buyers to come along. I would be looking to dip buy this stock if I was trading for real…. I soon will be. 🙂

Active Power Inc Pre Market and After Market Close

$ACPW pre market and after market close

I plan to write more about dip buying as still learning it myself, but hope to have more examples soon.

Remember I am NOT an expert in this niche, but just someone that wants the ultimate wealth of FREEEEEDOM and I’ve chosen to trade penny stocks to get me there, by learning from a true master that shows you every trade!

Until next time, keep on learning what you want to do until if becomes easy for you…