Why PennyStocking Is Comparable To Heroes The TV Show

Posted by timothysykes on Mon 2nd of Jun, 2008 06:40:50 PM

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An incredible post on Muddy’s Blog written by Mikity Mike must be read everywhere cuz it’s got trading wisdom in it. Soooo many great and successful people practicing and writing about PennyStocking out there, it’s beginning to feel like Heroes the TV show…The series tells the stories of ordinary individuals who discover that there are incredible trading opportunities in low priced stocks, and also explores how these people adapt to the changes the market brings, and their roles in preventing losses and saving the 90% of traders who lose money.

pennystocking_2 Why PennyStocking Is Comparable To Heroes The TV Show

Think I should pitch NBC?

All I know is that I’m beginning to feel like Mohinder Surhesh…my job is just to study and categorize this phenomenon in order to publish the profit serum that’s gonna save everyone…save the trader, save the industry kind of thing…enough from me, here’s Mike’s excellent post, maybe you should just refer to him as Hiro Nakamura:

I’m gonna try to put everything that I do to prepare for the next trading day, the scans I run and the different styles I use to chose stocks to trade both long and short. No doubt I will forget a few things and will update this post as I remember different things. I’m gonna try to get it all in this 1 post because the last month I’ve been asked by quite a few a bunch of questions regarding my trading style. Please note that very few of these ideas are mine. Most have come from Muddy and his blog. It took me many months but I think I’m on the track for a very bright trading future, thanks to him.

First, every weekend I run the top 40 dayrangers from last week:

“show stocks where the average day range(10) is above 8 percent and close price is between 1 and 10 and volume is above 300000.”

With this scan I have a column added ADR(30) and I rank the top 40 in order top to bottom highest ADR(30). For next week the list is:

DCR HYHY FPP LNG SSBX PFB WCI XRIT YTBLA TPLM SYNM KIRK SPF UNCL RTK ROIAK ICOG MMPI LCC TGC PEIX DCGN EEE UAUA XJT ENT QTWW KYUS NWA BSHF DSUP GFG CPSL BCON RCH EGR EBHI AKNS ATSG LGND

Next I scan for stocks over 8% gain from yesterday,this I run every night as opposed to once every week 40 dayrangers. These also ranked top to bottom ADR(30). The scan:

“show stocks where close gained more than 8 percent over the last one day and price is between 1 and 20…average day range is above 3″

Mondays list:

HYHY WCI KIRK UNCL ROYL EGR SWTX LGND PTEK CALC NCOC GLOB DGLY LLNW DPDW MERX MAG FRPT ALLI VITA NSU TRR JUPM ITI OZN QBIK COOL VVTV QUIK IDIX NENG EXAS HGRD TGX PLX SLTN FIRE VG SHFL MRVL

Next I scan for over 15% gainers over the last 2 days ranked top to bottom ADR(30):

“show stocks where close gained more than 15 percent over the last 2 days and price is between 1 and 20…average day range is above 3″

Mondays list:

HYHY SSBX UNCL MMPI DSUP PCSV EGR SWTX KOSN LGND TRX PTEK TRMP MAG FRPT ALLI TRR ITI QUIK ULBI HGRD TGX PLX FIRE SHFL MRVL TRIB WIND MESA GNTA NEXC HSOA GNLK SNUS CHTR SPSN SLTN QBIK COOL NENG

Next I run the The Combo scan which is stocks that have run the highest amount of times 10 to 19% in the last 100 days ranked in order of highest times to lowest times run.
On Stockfetcher.com it’s known as the RunForestRun scan.
I then cherrypick the ones over 9% in the ADR(30) column.
Thus the name Combo, combo of the RunForestRun scan ( found on Stockfetcher) and Muddys high ADR(30)

Here’s the SF code for the scan:
close is between 1 and 15
average volume(90) above 50000
average volume(10) above 250000
offset is 0

set{volcnt, count(volume above 50000, 100) }
set{volzero, count(volume equal 0, 100) }

set{x1, high - open}
set{Long_Profit, x1/open }

set{C1A, count(Long_Profit > .04 , 100)}
set{C2A, count(Long_Profit > .09, 100)}
set{C0010, C1A - C2A}

set{D1A, count(Long_Profit > .09 , 100)}
set{D2A, count(Long_Profit > .19, 100)}
set{D1020, D1A - D2A}

set{E1A, count(Long_Profit > .19 , 100)}
set{E2A, count(Long_Profit > .29, 100)}
set{E2030, E1A - E2A}

set{F1A, count(Long_Profit > .29 , 100)}
set{F2A, count(Long_Profit > .39, 100)}
set{F3040, F1A - F2A}

set{G1A, count(Long_Profit > .39 , 100)}

and add column daychg2
and add column C0010 {4_9}
and add column D1020 {10_19}
and add column E2030 {20_29}
and add column F3040 {30_39}
and add column G1A {40+}
and add column C1A {ttl}

sort column 6 descending]

I run this only once a week for it changes very little day to day.

Here’s this weeks watches:

SPF SYNM QTWW ABK DCR GETG ICOG UNCL RTK MBI XJT FBR NYNY FBTX EEE MMPI BDCO PKT FTWR KUN FPP ENT PFB KOG HDSN TNRO IMB WCI SSN ROIAK LGDI GFG ROYL HDY JAZ HEV GRZ NBF YTBLA LCC

Next I scan for red candles at, or even better, out of the UBB (called floaters). I use this for watches to short in addition to watching those to short from the 15%+ gains in 2 day scan mentioned above. I always watch the ones with a date offset of 1 also cause these tend to go down pretty nice over a few days period.

Here’s the scan:

stocks where close is above upper bollinger band(20) and close is below open and price is between .5 and 20 and volume is greater than 200000
offset is 0

Mondays watches:

WTSLA UFS CWTR COCO CKR CMGI SINO SCS NSIT STSI HRZ RDEN ITI TRMP PCSV SMRT MMSI CYBX TMM

Then I scan for the top 120 RunForestRun stocks for next week.You really need not do this but since I use 3 monitors, ONE IS ALWAYS RUNNING THE SCOTT SCROLLING HOD LIST, I can watch a bunch of stocks in seconds by flipping fast from watchlist to watchlist.

And then the morning an hour before open I begin loading the Premarket leaders from Interactive Brokers onto a watchlist as possible long/short opportunities.

It’s not as many watches as you might think because many of the stocks are on multiple lists.

Ok, now some of my thoughts on what is important to me for successful trading.

1. I can not live without the scrolling Scott hod lists.
Muddy showed me how it was possible to get 20,30,40,even over 50% profits in minutes to a few hours using this. Last week I caught MESA and LGND almost at the start of their runs.
Never had them on any lists,only saw them on the hod list,which brings me to this…….

2. KNOWING former runners and stocks that have hit these scans I run more than normal stocks do. Both MESA and LGND I knew from that way.The only way to get them in your head is to study each nights scans and either write down multiple repeaters or try to remember them.
Watching hours of scrolling hod list helps a bunch too.

3. I like to trade around even dollar marks for under $10 stocks plus .50 marks for the $3 and unders.

4. I really watch the “late hits” that appear on the pre-market leaders board, the ones in the 20 minutes before the opening bell. Many of these run longer than the ones that had been on it since 8 am EST as West coasters tend to wake up late:).

5. I really like the ones I scan for for the “red to green” and “green to red” reversal.
Red to green means going from negative to positive on the day and vice versa.
Since almost all my scans include high dayrangers I think you can see why.

6. If I can I really like to daytrade the lower float stocks.

7. I also like to trade lower volume new 52 week high stocks.

8. I love finding pump and dumps and fluff press release and/or paid promoter stocks.
You need to watch like a hawk cause when they come down they can fall super fast without warning,if you can catch the start of the fall they make great shorts.That’s what I’m always looking for,the short opportunity which brings me to…..

9. I like trading with IB,not just for low commish but mainly because you can short almost any stock there regardless of price plus their premarket leader list rocks, it shows in order the amount of time the stock has been on the list,you can catch the real late hits in the last 20 minutes real easy this way.

10. Besides Muddys blog I read only 2 others ( since I daytrade I really don’t care which direction these other bloggers think the market is going ) The 2 are: http://www.timothysykes.com/ for PennyStocking and shorts and http://themarketkid.blogspot.com/ cause I love momo stocks and he has the idea of how to find ‘em and trade ‘em.

11. IMO Stockfetcher is the best $9 a month you can spend if you are looking for a screening service.

12. Both Muddy and I have been in the mutual fund CGMFX for a long time, good place we’ve found to park trading profits.

13. I like to watch for the high gap open stocks,that are NOT due to earnings, for a fade between 10 am and 10:45 especially.

14. Intraday chartwise I really like the 10/60 sma cross for entries and exits. I used it a bunch when I first started not so much now cause I trust myself a lot better knowing the symbols.
Do a search for “10/60″ in the search blog box to see some charts .

15. Daily chartwise I like the “Muddy zone” on UBB pullbacks and “waiting for green ” with these to bounce out of this zone.Do search blog box for “Filters I Use”. Muddy explains how to use this zone.He recently has widened the zone a bit to EMA10/SMA30 for better visability.

I like to follow stocks like ROYL that had a white candle being pierced by the UBB on a vol increase,see ROYL chart 5/2/08, 5/13 the bottom shadow went right into this zone,the next day it went green at 3.32,it’s now at 5.79, ironically bouncing off the EMA twice during this run.
16. Also daily chartwise I like to use RSI(2) as an indicator of STRENGTH when the white candle is being pierced by the UBB. I like to see 90+ RSI2 in this situation,the nearer to 100 the better.
Most look to short these kind and I say they are dead wrong; this is an indicator of a strong stock not a sign of weakness.

Using ROYL again as an example look at RSI2 on its price/vol breakout day 5/2
Its RSI2 that day was 99.62 about as high as it can get!

17. As mentioned in the scans I run, I love to find red candles at the UBB and especially red “floaters” above the UBB. Then I wait for red the next day to go short. As Muddy used to tell me, “Red floaters kill!”

If I think of other tips that might be useful I will update on this post. I hope this will help clarify what I’ve been taught and how I try to put it into play for the average person just like me.
I feel I have a tremendous edge with this stuff, hope some of you find this helpful.

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Determined to teach others this PennyStocking trading strategy (learn more HERE), he went back to his original $12,415 roots (already $33,956 even though the stock market has crashed) to show everyone how to turn thousands into millions, even while having a life (somewhat) and making plenty of mistakes.

How Can I Consistently Make Money In The Stock Market?

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Hard work to learn how the greatly misunderstood niche of penny stocks provides opportunities every now and then on which you should pounce.

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Long story short, wait for stocks that are extremely volatile - for whatever reason - and then aim to take small profits (between 10 and 50% within a few hours, days or weeks) here and there, either from betting on higher or lower prices (yes, you can make $ betting on lower prices, it's called Shortstocking (learn more HERE).

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Nov 6	CVI	$4.42	$4.70	$530
Nov 5	MECA	$3.68	$3.95	$490
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Nov 3	NAK	$3.30	$3.37	$157
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Oct 30	HSNI	$7.37	$7.86	$561
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Oct 10	ISRG	Buy	$175	9%
Oct 8	ISRG	Buy	$195	4%
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Why PennyStocking Is Comparable To Heroes The TV Show

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