You might’ve read in last night’s post about my weirdest trade ever and how TIMalert subscribers and I profited $22,000+ when NXTH tanked, but you didn’t hear about the those who lost.
Because not everyone loves the frustrations of trying to find shares to short and not risking getting squeezed, many prefer buying pump & dumps like NXTH…something with which I’ll never be comfortable (I bought a whopping 1,500 shares of Americas Energy Company (AENY) the other day when I thought it was breaking out…..that’s about as big as I’ll ever go and it’s a waste of time)
Penny Stock promoters would have you believe it’s safe to buy these as long as you keep your stops tight…we already know goons like BestDamnPennyStocks.com are blatant liars, but the story below from one TIMalert subscriber who felt great riding up the wave, should help you understand just how dangerous it is to be on the wrong side of these trades if you’re not watching every single second:
(note he didn’t use a stop loss, but it wouldn’t have mattered…these pumps collapse so quickly stop losses provide ZERO protection whatsoever…like a condom with a big hole in it)
Well, it started as a great day going long on NXTH got 15K shares @ ave price of 2.82ish. The charts, the pump and volume looked great and the stock was running up to $3.22, nice profit ($5900), or so I thought. At 14:45 I figured a quick shower before she got home, come back, close out 13k shares and play 2K shares for the morning.
Well, I came back the saw the stock was @$2.20, no stop loss and I could not get my sell order in quick enough. My stock finally sold @ 1.89 For a nice loss of about $15K.
That right, I went from $6k up and in 5minutes I was down $15K, a $21K swing. Want a good lesson to see just how fast one of these P&D stocks can fall. Look at the daily chart for NXTH 02/08/2010.
Lesson learned here? Don’t EVER leave your computer when you play OTCBB P/D stocks, don’t take them for granted and don’t be greedy.
SamB
Tags: NXTH, Pump & Dumps
