Some information I personally use to swing trade
okay gang. somebody asked and here are some pointers on some basics of how to trade with pragmatism and avoid getting stuck in the world of cyclical markets and dilution.
i’m no gordon gekko but the moment i started paying attention to these things - i was able to actively secure my profits and minimize risk
#Float:
This matters the most. If you find a penny stock with single digit or under 20 million, this will run harder than something with 150 million float. I try hard to avoid penny stocks with more than 100 mil or even 75 mil outstanding shares.
Google authorized v outstanding v float shares. Very very important to learn the difference.
#Offerings:
Direct offerings good (does not add to float)
ATMs the worst (daylight robbery)
When you see offering news, check if it is public/common offering or direct offering
Direct offerings are good. DO is always given to institutions. Some tutes believe in the company
#Warrants:
SEC filings are boring but find them and read them and locate what the warrant price is and when. Typically when the warrant strike is at 80 cents and the stock is at 65 cents and appears bearish - you can gamble here.
But if market or econ is bad, sometimes they will adjust warrant prices down to say 60 cents (this is the risk)
#Compliance:
The longest they have been under 1, the bigger the risk for a reverse split. If they have been only non-compliant for 3 months, and they are doing a direct offering at 1.05$ and the stock price is languishing in 80 to 90 cents range, this is a screaming buy. I love direct offerings set in the low 1’s or even under 2
#After compliance:
Say a penny stock gains compliance and it’s trading at 1.2 And then there is a Coronavirus selloff and it goes below 1. This is ripe for pickings. It will usually languish here where MMs will shake weak hands to scare retail out and within the next 30 days there will be a sudden surge to over 1.
#Predicting offerings:
Always, effing always, expect to see an offering, esp in Pharma and biotech. When there is good news, there is always an offering. These companies do one offering in 14 months - per my well researched offering clock. If you have 2000 shares, sell half at the news and keep the other for FOMO. If you have 200, sell 100 at the news. Have to secure profits
#current ratio:
Yahoo finance has a current ratio which you can access for free. Most penny stocks have this under 1 or below .5 which is why they do offerings. After an offering their CR shoots up to as high as 10. This is a way of predicting if they need to do an offering soon.
You may argue, hey AT&T has a current ratio of 0.81
But AT&T has billions in revenue and they don’t need to beg vulture capitalists to issue bonds or get convertible notes
#do not go Big Bang
Unless you are a wealthy investor who trades in 100K lots.... always purchase 500 first, and leave some money for a week to see if you can pick up another 500 lower. Hell sometimes I buy 1 share and see what happens. Because do you always feel like shit falls as soon as you buy it?? This is how you beat it. If you bought 1 share, you didn’t catch a falling knife.
#core vs trading in cyclical stocks
Some stocks like OPGN are cyclical, they have been trading between 1.9 and 4 again and again. Keep a core position of 1000 stocks and trade the rest, buy low at 2 and sell at 2.5 ( this is the best way to beat cyclical stocks) - beware of wash loss sale here. Do not sell for a loss when you are trading cyclical stocks, unless you want to completely throw out the whole position
It’s difficult to do core v trading in the same broker unless you pay attention to which lot you are selling. Only merrill and ETRADE and Schwab/TD allow trading to this depth. So keep your core in Webull and do cyclical trading in ETRADE but best to try to avoid wash sale loss nonetheless. That is don’t lose money and buy same stock again within 30 days.
#after hours
Some tickers pump hard in after hours and most investors miss out. In July, I sold half my $YVR on my merrill at 7:30am at 2.9 and my entry was 1.39 and sure as hell, the market opened it crashed down to 1.8ish (because flippers always run for exits)
Robinhood starting after hours at 9 and closing at 6 is a fucking crime. Get Webull or moomoo or tdameritrade - they are free and I think Webull pre market starts at 4 am. So much shit happens 4am to 9am. I have sold half my position many many times in after hours and the other half always gapped down and I am waiting for next pump. Secure your profits in after hours
Important: do not chase gapping up penny stocks in premarket. Cardinal sin. Market opens and pumpers sell and you are left holding the bag. You may succeed one time out of luck but this move is ripe for failure
#volume
Sometimes a stock will go down but you check the volume and it’s like 200K (let’s say float is 20 million) This is extremely thin volume and you can average down based on other metrics, chiefly how long it’s been in downtrend. But other times it will be going down on heavy volume like 15 million (20 million float) and this is because everyone is jumping ship and this is catching a falling knife (usually happens on bad news or offerings)
The former is thin volume trading and it’s sometimes a trick used by MMs to shake stop losses. If there is no real news and the stock has been quiet, MMs resort to thin volume tricks and shake a few stop losses. Many times I have bought during thin volume down days and it didn’t turn out to be a bad trade. Most of us end up catching the knife and that happens on heavy volume days
Some brokers like tdameritrade put a tag on the volume - such as light or average or heavy and that is really really nice to grasp quickly.
If others have similar strategies, I’d like it if you add them to the thread
#disclaimer
All these pointers have exceptions to the common group think. Because no strategy is bullet proof. But it’s good to invest with some knowledge of the mechanics rather than blindly putting a bet and hoping it goes up.
$SPDR S&P 500 ETF(SPY.US$
$Dow Jones Industrial Average(.DJI.US$
$Russel 2000 ETF(LIST2714.US$
$iShares Core S&P 500 ETF(IVV.US$
i’m no gordon gekko but the moment i started paying attention to these things - i was able to actively secure my profits and minimize risk
#Float:
This matters the most. If you find a penny stock with single digit or under 20 million, this will run harder than something with 150 million float. I try hard to avoid penny stocks with more than 100 mil or even 75 mil outstanding shares.
Google authorized v outstanding v float shares. Very very important to learn the difference.
#Offerings:
Direct offerings good (does not add to float)
ATMs the worst (daylight robbery)
When you see offering news, check if it is public/common offering or direct offering
Direct offerings are good. DO is always given to institutions. Some tutes believe in the company
#Warrants:
SEC filings are boring but find them and read them and locate what the warrant price is and when. Typically when the warrant strike is at 80 cents and the stock is at 65 cents and appears bearish - you can gamble here.
But if market or econ is bad, sometimes they will adjust warrant prices down to say 60 cents (this is the risk)
#Compliance:
The longest they have been under 1, the bigger the risk for a reverse split. If they have been only non-compliant for 3 months, and they are doing a direct offering at 1.05$ and the stock price is languishing in 80 to 90 cents range, this is a screaming buy. I love direct offerings set in the low 1’s or even under 2
#After compliance:
Say a penny stock gains compliance and it’s trading at 1.2 And then there is a Coronavirus selloff and it goes below 1. This is ripe for pickings. It will usually languish here where MMs will shake weak hands to scare retail out and within the next 30 days there will be a sudden surge to over 1.
#Predicting offerings:
Always, effing always, expect to see an offering, esp in Pharma and biotech. When there is good news, there is always an offering. These companies do one offering in 14 months - per my well researched offering clock. If you have 2000 shares, sell half at the news and keep the other for FOMO. If you have 200, sell 100 at the news. Have to secure profits
#current ratio:
Yahoo finance has a current ratio which you can access for free. Most penny stocks have this under 1 or below .5 which is why they do offerings. After an offering their CR shoots up to as high as 10. This is a way of predicting if they need to do an offering soon.
You may argue, hey AT&T has a current ratio of 0.81
But AT&T has billions in revenue and they don’t need to beg vulture capitalists to issue bonds or get convertible notes
#do not go Big Bang
Unless you are a wealthy investor who trades in 100K lots.... always purchase 500 first, and leave some money for a week to see if you can pick up another 500 lower. Hell sometimes I buy 1 share and see what happens. Because do you always feel like shit falls as soon as you buy it?? This is how you beat it. If you bought 1 share, you didn’t catch a falling knife.
#core vs trading in cyclical stocks
Some stocks like OPGN are cyclical, they have been trading between 1.9 and 4 again and again. Keep a core position of 1000 stocks and trade the rest, buy low at 2 and sell at 2.5 ( this is the best way to beat cyclical stocks) - beware of wash loss sale here. Do not sell for a loss when you are trading cyclical stocks, unless you want to completely throw out the whole position
It’s difficult to do core v trading in the same broker unless you pay attention to which lot you are selling. Only merrill and ETRADE and Schwab/TD allow trading to this depth. So keep your core in Webull and do cyclical trading in ETRADE but best to try to avoid wash sale loss nonetheless. That is don’t lose money and buy same stock again within 30 days.
#after hours
Some tickers pump hard in after hours and most investors miss out. In July, I sold half my $YVR on my merrill at 7:30am at 2.9 and my entry was 1.39 and sure as hell, the market opened it crashed down to 1.8ish (because flippers always run for exits)
Robinhood starting after hours at 9 and closing at 6 is a fucking crime. Get Webull or moomoo or tdameritrade - they are free and I think Webull pre market starts at 4 am. So much shit happens 4am to 9am. I have sold half my position many many times in after hours and the other half always gapped down and I am waiting for next pump. Secure your profits in after hours
Important: do not chase gapping up penny stocks in premarket. Cardinal sin. Market opens and pumpers sell and you are left holding the bag. You may succeed one time out of luck but this move is ripe for failure
#volume
Sometimes a stock will go down but you check the volume and it’s like 200K (let’s say float is 20 million) This is extremely thin volume and you can average down based on other metrics, chiefly how long it’s been in downtrend. But other times it will be going down on heavy volume like 15 million (20 million float) and this is because everyone is jumping ship and this is catching a falling knife (usually happens on bad news or offerings)
The former is thin volume trading and it’s sometimes a trick used by MMs to shake stop losses. If there is no real news and the stock has been quiet, MMs resort to thin volume tricks and shake a few stop losses. Many times I have bought during thin volume down days and it didn’t turn out to be a bad trade. Most of us end up catching the knife and that happens on heavy volume days
Some brokers like tdameritrade put a tag on the volume - such as light or average or heavy and that is really really nice to grasp quickly.
If others have similar strategies, I’d like it if you add them to the thread
#disclaimer
All these pointers have exceptions to the common group think. Because no strategy is bullet proof. But it’s good to invest with some knowledge of the mechanics rather than blindly putting a bet and hoping it goes up.
$SPDR S&P 500 ETF(SPY.US$
$Dow Jones Industrial Average(.DJI.US$
$Russel 2000 ETF(LIST2714.US$
$iShares Core S&P 500 ETF(IVV.US$
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Trading Profits~>Take my kids to Disney
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hinanshu lyall : hey thank you, this is great information. look forward to seeing more of your stuff sir.
Ti-money : thank you for sharing your knowledge. I look forward to following you. once again Thank you
pamela1976 : thanks a lot I was the original commenter and that did help quiet a bit. I appreciate it!!!![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
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OldNormanBates : great read. Sure Glad I found Moomoo to do pre-mkt and post trading. milking the fast movers during my 4am lack of sleep moments. Sometimes don't have to know anything about the stock. Just as long as I don't Get too far into the PDT for the week.