The art of entering and exiting a multibagger

[burglar]

https://www.aussiestockforums.com/forums/showthread.php?t=4650

Did a heap on this 6 years ago

hi tech/a,
Methinks you'll do a heap more in the next 6 years.

Regarding your thread on FCN Falcon Resources ...
Nice thread! I enjoyed it!

 

[pavilion103]

I didn't see this one when I started my thread

https://www.aussiestockforums.com/forums/showthread.php?t=24882

Was thinking a lot about SYR too as you can see I used it as an example.


That other thread Tech/a put up looks great. I will digest that in more detail when I am at home.

 

[burglar]

...
Was thinking a lot about SYR too ...

It did look hot at that time!

 

[burglar]

Sure if you can pick it. ...

I did pick it!

I did not buy them @$0.02



23/12/2009 B 10858 ADN @ $0.26 $2,841.07

I did not sell them @ $0.245
I managed only $0.185

I do not recommend this strategy to anyone.
It is risky ...risky ... risky ...

... Whats the liquidity like trying to sell at 20 though?

Volume 40,000,000 shares on the day!
Some more the following day.

Includes some churning ... so no problem!

But I do know what you refer to.
I did have a problem of disposal with a trade in MUX.
I still hold some to this day!

 

[dtraeger]

What tool/filter do you use to find potential buys?

 

[burglar]

What tool/filter do you use to find potential buys?

I would trawl through the ASX announcements.
I was seeking key words in the titles, like Bonanza grade ... eureka ... high grade.
Of course, I often found junior explorers.
I did that for a decade.

I had easy access to stats re companies which had the biggest % increase for the day.
I would try to find the reports that made them fly!

Fraught with danger, I found EXM this way.

I had access to Magazines; Paydirt and the like.
Could still access them if I go to the library.

 

[AussieBoy]

I had easy access to stats re companies which had the biggest % increase for the day.
I would try to find the reports that made them fly!

Where did you find them from?

 

[burglar]

Where did you find them from?

My online broker used to have them on the home page, but they have since improved? the platform.

 

[levin123]

Hey Burglar,

Do you have any other tips for picking those baggers? I've been particularly looking at the junior explorers but am finding it difficult to come up with any sort of criteria for choice.

 

[Boggo]

I would trawl through the ASX announcements.
I was seeking key words in the titles, like Bonanza grade ... eureka ... high grade.
Of course, I often found junior explorers.
I did that for a decade.

I had easy access to stats re companies which had the biggest % increase for the day.
I would try to find the reports that made them fly!

Fraught with danger, I found EXM this way.

I had access to Magazines; Paydirt and the like.
Could still access them if I go to the library.

In most cases the real buying has happened before the mug punters come along with the latest report in hand.
The smart money is already in and now have a choice of staying in if the report has long term upside potential or selling out to the report dependant majority who are now buying.

Approaching report time the daily charts are a good barometer of what influence the report may have after it is digested by the masses.
Referring then to the weekly chart can be an indicator of the potential longer term influence.

The report on TGA was accessible to the unwashed masses on the 21st but look what happened from the 9th on the daily chart. Below that is the weekly chart.

Just my

(click to expand)

 

[Boggo]

The smart money is already in and now have a choice of staying in if the report has long term upside potential or selling out to the report dependant majority who are now buying.

And an extract from the ann on Fri 24/05 as an example of what I mean. Who do you think they were selling to ?

 

[tech/a]

Where did you find them from?

http://au.finance.yahoo.com/gainers?e=ax

Personally I look for stocks which have good volume but not ridiculously high volume.
I check the chart to see where the are in the history of the current move.
Over 8c to 80c stocks.

Take a low risk trade (small stop which I try to move the B/E during the day.)

As an Example DYE today

 

[burglar]

http://au.finance.yahoo.com/gainers?e=ax

Hi tech/a,

Bookmarked with thanks!!

... As an Example DYE today ...

Will DYE be the next big thing in solar panels?

 

[statmech71]

http://au.finance.yahoo.com/gainers?e=ax

Personally I look for stocks which have good volume but not ridiculously high volume.
I check the chart to see where the are in the history of the current move.
Over 8c to 80c stocks.

Take a low risk trade (small stop which I try to move the B/E during the day.)

As an Example DYE today

View attachment 52441

Are you still in this one Tech? How do you treat sharp reversal days with a tall upper shadow? Do you exit at day's end or tomorrow's open, or do you let it take out your stop?

Regards,

Paul

 

[tech/a]

Are you still in this one Tech? How do you treat sharp reversal days with a tall upper shadow? Do you exit at day's end or tomorrow's open, or do you let it take out your stop?

Regards,

Paul

Paul
It is an example
I'm not trading it.
I do have a complete method of trading these
But I'm explaining a pattern method currently
Perhaps later.

 

[statmech71]

Paul
It is an example
I'm not trading it.
I do have a complete method of trading these
But I'm explaining a pattern method currently
Perhaps later.

No worries Tech. I'm following with keen interest!

 

[AussieBoy]

For a potential multibagger, I try to set a dream scenario before I buy in, a sort of inverse to capital exposed:
So for example: I put in $1,000 - if it doubles, oh joy - sell half and be free carried on a stake now worth the original buy-in - get out quick on the first sign of weakness, because that second sell is your profit.

For bigger stakes, sell a smaller fraction, but sell sooner and settle for a nice profit (say, 33%, on 1/3 original holding?) Again, sell most of the remainder on the first sign of a stall.

The simple fact is that a good profit is much, much more likely to disappear than to double again. Always be be prepared to take at least some off the table. Greed may be good, but it needs to be contained lest it do you in. The rise is so much more (NB: more, not less! ) enjoyable when you've actually stashed some of it.

And finally, I've been playing this game for about 7 years, just in time to get a bit too cocky for the GFC (Mk 1). I've only caught 1 true multibagger ($x * 4, CDY, November 2010), and yes, I could have in theory made more, but the stash that I banked saved my bacon - if I'd played it hard, I would have been left with burnt toast.

What? You made a 400% one-day gain? Makes my highest one (58%) look miniscule in comparison

 

[statmech71]

Paul
It is an example
I'm not trading it.
I do have a complete method of trading these
But I'm explaining a pattern method currently
Perhaps later.

Gees, it's a shame you weren't trading it (or I for that matter!). Gapped up 50% today!!

 

[CanOz]

There are lots of ways to enter strong trending stocks, or forex, or futures for that matter.

This is one way that Linda Raschke and a few others uses. Its called the "grail" trade. They use this in all time frames too, not just jusr EOD.

You can eyeball charts for this setup, then watch list them for continuation patterns like Tech and Pav do.

Here's what to look for:

A strong burst of momentum - in this case as indicated by a simple 3, 10,16 MACD.

A pullback to the 20 MA after a strong trend (over 30 on the ADX) as indicated by the 14 period ADX.

A continuation pattern, so a triangle or flag, small channel. Somewhere to place a stop limit order and then a stop loss.

I've used PDN as an example as there are not too many exhibiting this on the ASX at the moment....

The first chart shows the momentum, the ADX and the pullback to the 20 SMA. This is when you watch list it and keep an eye out for a pattern to form.

The second chart is the pattern.

The third is the breakout, the rest is history...multi bagger...As Tech always says though, you have to put yourself in front of that train.

The key here as well is to have a bull trend in the market, buy strong stocks in a strong market. Be patient and wait for the continuation pattern.

CanOz

 

[Ann]

I've used PDN as an example as there are not too many exhibiting this on the ASX at the moment....

CanOz

Have a look at IIN may evolve like PDN did back in 2005.