A Solid Wussy Trade, aka Good To Do In This Kind Of Market
Posted by timothysykes on Mon 17th of Mar, 2008 08:12:49 PM
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Forget the overall markets, today the biggest news was I began Twittering. For those of you who don’t know, Twitter is a messaging system where you leave quick little notes that can be viewed by everyone in real-time. Just gotta follow people—click HERE to follow me. Other than that, it was a slow day. That’s right I said it, what!
You gotta remember, my game, and the game I’m trying to teach everyone here, is PennyStocking, not this BS-macroeconomic-will-we-or-won’t-we-have-a-massive-financial-disaster-so-what-stocks-and-what-assets-should-we-be-long-or-short-depending-on-what-others-expect-and-when-they-expect-something-to-happen-or-not game everyone else in trading/finance is playing right now.
I, like the vast majority of you out there, am not smart, well-informed or rich enough to play that game, so I stay clear of competing against big-time traders, fund managers and stick to my little microcrap and smallcrap niche. Because outside of my niche, I have no edge. The odds are not on my side. Ever. And, today, my niche, was quiet.
Now, even though BSC, MF, LEH and the like all showed tremendous volatility—great for most traders—but I won’t even post their charts here because while their price action may be similar to that of PennyStocking , the factors and players behind them are vastly different. Anything, and I do mean anything, could’ve interfered with their intraday patterns—like a big hedge fund being forced to liquidate or a CNBC mention—neither variable I’d very concerned with if they were true Penny Stocks .
TIM Lesson: I trade hyped up and inefficient stocks played by small-time traders and investors moving due to market mechanisms, momentum or fluff news, not real companies played by the entire financial speculation community moving based on potentially disastrous or life-saving news. There is a HUGE difference
Don’t think for one minute I wasn’t tempted to buy some BSC when it broke $4 and ran to $4.50-$5 within 30 min or that I wasn’t chomping at the bit to short sell into the panic on MF or LEH from 11am-1pm, where MF dropped from $14 to $4 and LEH faded gradually from $34 to $24. I was dying to trade those patterns.
But I held firm and probly thanks to the 6,000 daily website visitors now watching my every move, remained disciplined for once. Instead, my one trade of the day, while screwed up as usual—was the right move. During the nasty market open, I saw microcrapper GENC down $2 on volume of only 7,000 shares. I knew some shorts might cover, the market might rebound—plenty of room for a $1 bounce, ideal for my small account size to exploit. But I patiently waited (3 minutes or so, LOL) for the selling to subside and some bids to support (indicating the odds were against a $3 drop). Some 1,000 share buys came in around $15 so I sucked up the 20-ish cent spread and bought 400 shares at $15.19ish.
A few minutes later some buys spiked the price to $15.50—with the ask going all the way to $15.95, but the bidders remained at $15.05-$15.25—no good to me. Even as the market was rebounding, some small sell orders came in along with some 1,000 sell blocks at $15.40 and $15.50—blocking my path upwards. I went on the defensive and sold into some small buys at $15.35, profit of $50. A few minutes later, a big buy block of 4k came in at $15.10, then $15.30, scaring those big block sellers get taken out in the $15.40-.50 rage and the bidders surged all the way to $16, coulda woulda shoulda profit of $300-ish.
Overall, not a bad trade at all, bought right near support, played it very safe—since the markets were going crazy and this was not my ideal short the fade or buy the breakout trade—obviously coulda woulda shoulda be 6 times nicer, but experience teaches me if a stock doesn’t bounce right away in the morning, it may never bounce. Nice potential gain, little potential for big loss–this was a solid defensive trade.
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TIM Trades
View All| Date | Stock | Buy | Sell | Net |
|---|---|---|---|---|
| Nov 20 | STXS | $3.21 | $3.48 | $813 |
| Nov 18 | PERY | $4.68 | $5.00 | $640 |
| Nov 11 | IIJI | $2.79 | $2.95 | $442 |
| Nov 6 | CVI | $4.42 | $4.70 | $530 |
| Nov 5 | MECA | $3.68 | $3.95 | $490 |
| Nov 4 | CVI | $5.18 | $4.94 | $472 |
| Nov 4 | CVI | $4.83 | $5.01 | $333 |
| Nov 3 | NAK | $3.30 | $3.37 | $157 |
| Oct 31 | IDAE | $2.18 | $2.18 | $20 |
| Oct 30 | HSNI | $7.37 | $7.86 | $561 |
| Oct 29 | EVC | $1.97 | $2.70 | $1439 |
| Oct 28 | HSNI | $6.92 | $7.30 | $540 |
| Oct 28 | HSNI | $6.20 | $6.00 | $320 |
Total: $35,854 (189%)
Still following you….. behind the scenes…(one of your earliest fans). Your site is getting close to perfection. Totally agree with this post. Classic example….i tempted to short Bear on Fri….(would of made 25k over the weekend) but ultimately knew that it wasn’t my game. I stick with microcap special situations. It’s funny because my coworker was so sure that the worst was over and that there would be a rebound after JPM’s credit line.
ohhh just wait, we’re introducing a whole new site April 1st, seriously
I can’t find anywhere in your book for trading something like GENC out of nowhere. This is not a supernova style trade, not Tim style either. All day you defended you are not trading with anything like long BSC, short MF or LEH all day long and all of a sudden you jump in GENC?? I don’t get it. Probably COIN buying at $10 and selling at $10.50 today would have been better than GENC, IMO.
GENC wasn’t out of nowhere, I’ve been profiling on and off for weeks now. And since I got rich too quickly in the book, this trade never would have worked with a large account size. Look at the risk-reward for TIM, it was great! Do not mistake this with random-ass COIN, this was a solid trade because I bought a stock down on little volume right at support. Understand better?
PS I didn’t write about ti real-time on this blog because I didn’t want to deal with front-running issues on such an illiquid stock, but this is a great trade for small traders looking to mae a quick 50 cents-$1 on a few hundred shares
twitter hu? facebook, myspace, youtube, what’s next? i think your new site should have iits own version of twitter (TIM-Twitter-Live) so that way it’s all in one place. you do know you’ll have a lot of haters for keeping your GENC play a secret since you promote being transparent. hey even I understand keeping a few in the bag so as not to be front runned. i’m sure there’s a lot of that market minipulation going on even between traders where they try to buy & sell while calling each other on the phone. “you buy some of my shares here and I’ll sell some here but then buy them back here at this price…” the same sort of thing use to go on with party-poker and I’m sure it still does. either way at least in PS’s there’s more volume to dilute them. oh ya…as for the april 1st release…that’s not some type of april fools thing is it? can’t wait to see it.
Hi Tim.
Great post. I really appreciate your honesty, showing your qualities and defaults in trading. Very interesting blog.
BR from France (ya know, the country with the best, uh, worst trader ever ;-)
JJ, how can someone be offended by TIM not mentioning GEN real-time? If he had bought it and then posted that everyone should buy it. Then sold into that. I can understand how that would be sketchy. (Whatever happened to Tokyo Joe?) Not posting it, though, seems fine.
TIM, Why can’t buying at support on low volume decline work on larger stocks as well? I understand it would work less well, aka more random so the edge isn’t as meaningful because other factors and less suspectible to big decline on small share volume. Still an edge though. A smaller than usual volume and big move to support would I think still be a buying opp for a bigger stock as well. With the benefit of more scalable.
One more question TIM. Are these the ipod speakers you use? Are they worth getting?
Buying support does work SOMETIMES on larger stocks but as I mention, there are a million other variables that low the predictability in ALL other market sectors. Thats why Penny Stocks are ideal for smaller accounts. I don’t have those speakers, they just looked cool
just twittered:
quoted as being anti-leverage in the ny daily news http://tinyurl.com/yqr7rn sweet!
http://twitter.com/timothysykes
short 2,500 KBX at $1.79, chart is vertical, morning short squeeze, 3rd day of runup, ,methinks it’ll test going negative on the day, can’t wait til the afternoon, gotta be early on amex stocks, thats why i hate playing them, added risk
out at $1.71 $200-ish profit. now 1.68, probly too early exit but i HATE AMEX stocks, nasty spreads, illiquid, nasty market maker game. no thank you, decent trade
kbx now 1.61, tell me some of u guys held
guess everybody is off playing BSC, how thats short workin out for u suckers?
wanted to play KBX but broker had no shares
BSC…wouldn’t play it with your money!
Tim, what is your stance on trading options? There is the bid spread in bid - ask to deal with, but that seems to be the case with these thinly traded microcrappers as well.
Tim,
How did KBX pop up on your radar this morning? Yahoo Price % Gainers?
what are all the added risks of AMEX? I’ve heard that the market makers are kind of shady, but what rules and regs make it distinct from the NASDAQ or NYSE, particularly from an intra-day perspective?
Signed up for Twitter…but I wonder why not just post the messages here instead?
Tim I think comments or a write up regarding this would be funny
http://youtube.com/watch?v=772PXNSrSiI
Caught in the act!
Tim,
Do you feel KBX will continue to fall the remainder of the day..and maybe into tomorrow? Or do you think that it tested yesterday’s support around $1.60 and it will be on the rise? Trying to get a grasp on how to read the charts. Thanks!
–Nolan
Nolan-
It looks like it has been bottoming around the 1.60 range, you know the way Tim trades is in and out, there isn’t much volume right now and there hasn’t been a huge move intra-day so although we may like to say it looks good… all it takes is one big trader to determine the way this will go… so I’d look at the chart as a big picture, it’s jumped up, saw a potential sell off opportunity.. and it worked.
What kind of car do you drive Tim?
Answers: No car, I live in NYC, before it was a BMW 745li
KBX, no idea, predictability was in it going from slightly positive to flat or slightly negative, now its back to random (see my latest post)
twitter is great cuz i can do it on the go and it’s viral
AEx i can’t see all the block sizes on my level 2, i can only see some, i’ll detail more in my post later
fofund KBX before bed last night, just scanning charts on clearstation, me likie vertical charts
never traded an option, don’t know about them
Timmay. It’s just my observation,but if you plan to take 12k to 1.65 mil in this “decade” you are going to have
to use margin or at least make more than 3 trades a week. If you are having a problem with the PDT rule
what you should do is open (with16k) 3- 8 accounts with tradestation this way you would be able to make
1-2 trades a day.This would aslo help you to nerrow your focus to truly penney stocks (stocks under $5) and mitigate your risk by spreading your risk over 3 or more accounts. I personally was in ticker SCA the day before it gaped from .66 to 1.4 in one day thats over 100% in one day. These are the plays you should be looking for.It’s still a good play,check it out. Any way good luck.
thanks but i’ll never use leverage. all i gotta do is get to 25k so i can trade the way i want. SCA is fine but its a financial play, i ignore those, only hype/fluff/spam, no real companies, diff variables