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Trading Rules


Simple Strategy Predictable Profits 

What we do here is simple.

We trade penny stocks using situational analysis that have investor awareness
campaigns going on to help 
increase awareness of the company.

Why? Because those are the stocks that are most likely to go up over the  next few hours, or days.

We have identified a pattern of these stocks moving up quickly 80% of the time there is a large investor outreach campaign taking place so we take advantage of that.

We reduce the risk by not holding on too long and quickly taking the profits that are provided us on a regular basis.

See we humans are smart, and our brains give us the ability to operate quite safely in high risk situations as long as we know what the risks are and are mindful of them.

So what are these investor awareness campaigns anyways?

Because most OTC companies have no analysts  following and are not big enough to get coverage from the mainstream media if they want to tell the world what they are up to, they hire an investor relations firm to help them.

The investor relations firms then buy all kinds of media spots on TV, Radio, high traffic websites, newsletters etc. These campaigns put the story in front of hundreds of thousands to millions of people over days or weeks.

iStock 000018142123XSmall 300x199  Trading Rules Because so many people will see the story, a buzz gets going and there is  almost always a spike in trading volume and prices head higher.

 The spike in volume and price is picked up on stock screens and now  investors that never even saw the story from the campaign jump on  because fear of missing out drives us to want to be involved.

 This buzz can last anywhere from hours to weeks depending  on how long  the campaign runs and how good  the story is.

If you jump on these stocks at the very front end of these campaigns, odds are, it’s headed higher,

Now your job is to carving out a piece of the pie for yourself.

The Trading Rules

Memorize these strategies and think about them when ever you trade. They have saved MANY from unnecessary losses and helped traders just like you to successfully navigate this market.

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GETTING IN
Always use limit orders when getting into a stock. Pick an entry price and stick with it.

Never use market orders to enter into a trade they leave you vulnerable to getting poor price fills.

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IF A STOCK GAPS, DO NOT CHASE IT

iStock 000009047909XSmall 198x300  Trading RulesThere will always be another trade right around the corner. Don’t beat yourself up if you miss one. The last thing you want to do is over pay because you see a stock moving and think you are missing the boat. Remember, You should be looking to sell a stock when it is 10%, 20% 50% higher, not buy it.

If you really love the story, wait a bit. Market makers will usually push the price lower between 9:45 EST and 10:15 EST in an attempt to panic the early morning buyers into selling their shares back to them so they can make a profit on shares they are short from filling orders on the open at the higher price.
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WATCH THE OPEN FOR AGGRESSIVE SELLERS

GET IN, WATCH FOR BIG SELLERS, THEN DECIDE TO STICK IT OUT OR BAIL.

If you are watching a stock that has an average daily volume of 50,000 shares and the stock trades 250,000 shares in the first 1o to 15 minutes and it isn’t moving this is not a good sign.

You want to see a stock tick up on a regular basis as you see buys come in. If you see lots of buying and the price is not moving, GET OUT. Don’t wait.

This is the Wild Card when it comes to penny stocks.

There is no way to tell before we do an alert if there are a lot of sellers until the stock begins to trade.

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KEEP YOUR LOSSES SMALL

THE BEST WAY TO DO THIS IS TO SELL A STOCK IF IT GOES BELOW THE PREVIOUS DAYS CLOSE.

This is the price shown in our alert.

This may get frustrating because stocks can dip before heading higher when market makers try to fake out traders but for those of you that can not afford much risk, other than not buying penny stocks in the first place (good idea if you can’t afford risk) this is a good way to keep losses small.

For those that can handle more risk, still keep the losses small. When you enter a trade, determine what price you need to sell if it heads lower and if the trade goes against you, get out.

iStock 000018012629XSmall1 200x300  Trading Rules

Every big loss started as a small loss where the investor lost control of their emotions and didn’t close out the trade. All investors have trades that go against them. It happens to everyone. Successful traders know how to limit losses while unsuccessful ones do not. Losing traders begin to hope and pray that the stock will turn around so they don’t lose money and next thing they know a small 10% loss is now a 40% loss. At this point they begin to think the stock cannot go any lower and they hang on. Now it’s a 90% loss and they finally sell.

Do not let this be you. Put a line in the sand in every trade you do. When it gets over that line, get out.

THIS IS THE SINGLE MOST IMPORTANT KEY TO SUCCESS IN TRADING.

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SELL ON THE WAY UP
When entering a new trade determine beforehand where you want to get out if/when the stock goes higher.

Put in a sell limit order as soon as you buy the stock. That way when the stock hits this price you are taken out and don’t have to struggle with wondering if it’s going to keep going higher.

Book your profits.

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TRAILING STOPS
Use trailing stops to protect your profits after a stock has gone higher. If you get into a stock at .10 cents and it runs up to .20 cents you want to protect your profits. Some people will decide to get out completely and that’s smart but some of you may want to stay in the trade to see if it goes higher. The best way to do this is to use a trailing stop. This protects your profits. A mistake that many traders make is allowing a profitable trade to turn into a break even or losing trade. Don’t let this happen to you.

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BE CONSISTENT
Get used to booking profits no matter how small. It may help to learn to take small profits when you begin. There is nothing wrong with taking 10%, 15%, or 20% profits on trades. This gets you in a winning state of mind and makes taking profits much more of a habit. You do not need to buy at every low and sell at every high in order to make a lot of money in the market. You just need to be consistent.

Everyone wants to hit home runs when they buy penny stocks but the fact is most investors will lose more money hanging on for the big winner instead of taking consistent SMALLER profits.

DO NOT BE GREEDY. This will be the death of your trading account.

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iStock 000012259812XSmall 200x300  Trading RulesSUMMARY

  • GET IN AHEAD OF EVERYONE ELSE.
  • TAKE YOUR PROFIT AHEAD OF EVERYONE ELSE.
  • TAKE SMALLER CONSISTENT PROFITS, THEY ADD UP.
  • DON’T BE GREEDY.
  • IF THE STOCK GOES LOWER, SELL IT RIGHT AWAY. DON’T WAIT.

Follow these simple rules and your trading account will thank you.

 

Good Trading

Mark & Sean

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