Trading stocks under 20C (tech's method)
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tech/a
No Ordinary Duck
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Well Im still at it!!
Ive been testing ideas for the last couple of days and still cant find a method which tests profitably!!
Seems from the other thread no one else has offered any ideas up either.
Ill keep at it!.
Anyone out there have a method they have been using which appears to trade profitably that they would like coded up and tested?To see if long term Theory = Practice.
tech
Ive been testing ideas for the last couple of days and still cant find a method which tests profitably!!
Seems from the other thread no one else has offered any ideas up either.
Ill keep at it!.
Anyone out there have a method they have been using which appears to trade profitably that they would like coded up and tested?To see if long term Theory = Practice.
tech
RichKid
PlanYourTrade > TradeYourPlan
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Hi tech/a,
Really glad to see this thread going well. I don't have any special software so I can't filter stuff. I just 'eyeball' for trends once I hear about something and check it out.
But coincidentally I came across BSA and CUE which were on your charts (CUE has jumped up from where it was on your chart- watched it at 11c after a 'tip' but didn't enter as I expected it to fall lower and consolidate, oh well...), BSA is trending well IMO, no signs of the trend reversing. I got into BSA at about 21c but as I was inexperienced I jumped off after setting a tight stop loss. I didn't watch the stock properly after that but I'm considering re-entry. From my reading of Edwards and McGee we should follow the trend until we get a signal to the contrary. I'd look to enter at 43c (support) and exit if it closes below 42c (support)- but that's just me being cautious. I'd also consider a close at or above 45c (resistance), on volume (1.5m+), to be a strong buy signal.
I use volume mainly to confirm trends and signals- I've an eye on NMC for example and notice support at 4.5c but expect a fall to no more than 4c (maybe 4.3c first) and to consolidate and then fly through 4.5c. If it doesn't fall below 4.5c next week I'll probably buy as that'll be some evidence of support, just depends on whether there are better opportunities. Interest (orders) has increased but volumes have not really reflected the surge. Volume just confirms the price trend though.
Anyway, those are my views. I mainly look around for co's that are forgotten and look like they're recoveirng TA wise and then try to time a proper entry (that's how I came across DES and AZR- mentioned elsewhere). Also the same with HDR except it was trending strongly and was not forgotten, but I'm getting off topic now. So I still have to come up with a set system but the key is tactics rather than just picking trends IMO. I also like co issued options/warrants for more leverage. but still learning....
Really glad to see this thread going well. I don't have any special software so I can't filter stuff. I just 'eyeball' for trends once I hear about something and check it out.
But coincidentally I came across BSA and CUE which were on your charts (CUE has jumped up from where it was on your chart- watched it at 11c after a 'tip' but didn't enter as I expected it to fall lower and consolidate, oh well...), BSA is trending well IMO, no signs of the trend reversing. I got into BSA at about 21c but as I was inexperienced I jumped off after setting a tight stop loss. I didn't watch the stock properly after that but I'm considering re-entry. From my reading of Edwards and McGee we should follow the trend until we get a signal to the contrary. I'd look to enter at 43c (support) and exit if it closes below 42c (support)- but that's just me being cautious. I'd also consider a close at or above 45c (resistance), on volume (1.5m+), to be a strong buy signal.
I use volume mainly to confirm trends and signals- I've an eye on NMC for example and notice support at 4.5c but expect a fall to no more than 4c (maybe 4.3c first) and to consolidate and then fly through 4.5c. If it doesn't fall below 4.5c next week I'll probably buy as that'll be some evidence of support, just depends on whether there are better opportunities. Interest (orders) has increased but volumes have not really reflected the surge. Volume just confirms the price trend though.
Anyway, those are my views. I mainly look around for co's that are forgotten and look like they're recoveirng TA wise and then try to time a proper entry (that's how I came across DES and AZR- mentioned elsewhere). Also the same with HDR except it was trending strongly and was not forgotten, but I'm getting off topic now. So I still have to come up with a set system but the key is tactics rather than just picking trends IMO. I also like co issued options/warrants for more leverage. but still learning....
Hi Tech
I'm curious to know from which sectors do the majority of the stocks come from your explorations. Given the run on the energy sector, are there many junior oil explorers?
The reason why I ask is that, I read/heard somewhere that oil explorers can be the most predictable of stocks. That is they make an ann. to drill, if it's considered a potentially profitable drill, a run will start (if the time period is in the near term eg 2/3 mths), then from about 4/6 weeks before the drill (or spud date) the run will resume up until the spud date, ease of then resumes again as target depth approaches. Of course the fun will start as the drill progresses!! (with the results usually entirely unpredictable ! with a few exceptions.)
This is of course a bit simplified, but I would think some study & analysis might produce a bit of a pattern.
I've only tinkered around with a few species, with mixed success, so I'd be interested to know it a reasonable trading plan could be developed.
Regards
ps. any idea when tradesim 4.0 will be released?
I'm curious to know from which sectors do the majority of the stocks come from your explorations. Given the run on the energy sector, are there many junior oil explorers?
The reason why I ask is that, I read/heard somewhere that oil explorers can be the most predictable of stocks. That is they make an ann. to drill, if it's considered a potentially profitable drill, a run will start (if the time period is in the near term eg 2/3 mths), then from about 4/6 weeks before the drill (or spud date) the run will resume up until the spud date, ease of then resumes again as target depth approaches. Of course the fun will start as the drill progresses!! (with the results usually entirely unpredictable ! with a few exceptions.)
This is of course a bit simplified, but I would think some study & analysis might produce a bit of a pattern.
I've only tinkered around with a few species, with mixed success, so I'd be interested to know it a reasonable trading plan could be developed.
Regards
ps. any idea when tradesim 4.0 will be released?
tech/a
No Ordinary Duck
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RK
Things are actually a bit slow as I havent had time to play much with this.
Still not finding a method which returns a profit.
I think the smaller the cap and the Larger the universe of stocks the harder to return a profit.I havent worked much on which stocks to include.
Dog"Catcher"(Does that mean you catch dog stocks and trade them?).
Id have thought that anything remotely associated with oil would benifit from 12 mths of super bullish price hikes.
But agree that a small universe is best.
V4.0 Tradesim.
Ive had mine 6 weeks.
Its on the site.
John
Things are actually a bit slow as I havent had time to play much with this.
Still not finding a method which returns a profit.
I think the smaller the cap and the Larger the universe of stocks the harder to return a profit.I havent worked much on which stocks to include.
Dog"Catcher"(Does that mean you catch dog stocks and trade them?).
Id have thought that anything remotely associated with oil would benifit from 12 mths of super bullish price hikes.
But agree that a small universe is best.
V4.0 Tradesim.
Ive had mine 6 weeks.
Its on the site.
John
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Hm, I think you guys are looking for something that doesn't exist. Penny stocks are penny stocks for a reason.
I would fully support this statement. The smaller the cap the less likely it will return a profit. If a stock is worth 3 cents (like MUL for example) then obviously that's because it doesn't make a profit and as such is not worth any money.
Stocks in this price range tend to trade irrationally up and down based on rumours, news and speculation. I would be very surprised to see a technical analysis showing something useful yet alone picking the right stock before its next run.
IMHO there is no tech method to pick these sort of stocks simply because they do not behave in a way that would make them predictable.
Happy trading
Stefan
tech/a
No Ordinary Duck
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Stef.
An interesting observation.While I am yet to find a profitable way to trade these,I cant then say I disagree with your observation.
However technically I can find and Identify impulse moves regardless of how/why simply using a breakout formula.Often for it to have a decient value it will need to be triggered intraday.However past moves indicate that there "Should" be some quick profit.
The sub 20c stocks move often over 50% so "Bang for Buck" or Reward to Risk can be high.Thats why many newbies like them ------- plus they are cheap.
Now I dont trade them as you know but the curiosity and the desire to see if we can find a method which is profitable goes on.
I actually do know a way but you need live data and a search capability.
I have that with Marketcast.I used to do this with 5K for some interest but dont these days as Im to busy to sit at the screen.But used stocks to 50C as 20c breakouts were rare.
At around now 10am I search for highest % gainers at heavy volume.
Id take only 1 or 2 trades if they were stand out and trade them intraday.
Ie Hold till close if it closed on its high Id log for sale at open tommorow.
If it was closing 25% or more off the high Id sell at close.
Just scanned and CUE at 21c would have been a candidate.Lets watch.
Anyway you may well be right but Ill keep banging the brain and see what developes.
tech
If it traded 2 ticks below entry then Im out.Did OK.
An interesting observation.While I am yet to find a profitable way to trade these,I cant then say I disagree with your observation.
However technically I can find and Identify impulse moves regardless of how/why simply using a breakout formula.Often for it to have a decient value it will need to be triggered intraday.However past moves indicate that there "Should" be some quick profit.
The sub 20c stocks move often over 50% so "Bang for Buck" or Reward to Risk can be high.Thats why many newbies like them ------- plus they are cheap.
Now I dont trade them as you know but the curiosity and the desire to see if we can find a method which is profitable goes on.
I actually do know a way but you need live data and a search capability.
I have that with Marketcast.I used to do this with 5K for some interest but dont these days as Im to busy to sit at the screen.But used stocks to 50C as 20c breakouts were rare.
At around now 10am I search for highest % gainers at heavy volume.
Id take only 1 or 2 trades if they were stand out and trade them intraday.
Ie Hold till close if it closed on its high Id log for sale at open tommorow.
If it was closing 25% or more off the high Id sell at close.
Just scanned and CUE at 21c would have been a candidate.Lets watch.
Anyway you may well be right but Ill keep banging the brain and see what developes.
tech
If it traded 2 ticks below entry then Im out.Did OK.
Tech/a,
I was wondering if you had done any further research on the penny stocks? And how did CUE go after you highlighted it on the 7th Nov?
I tend to stay away from the penny stocks as the lack of volume and there seems to be too many punters. But sometimes can't help myself.
Cheers
Dwib.
I was wondering if you had done any further research on the penny stocks? And how did CUE go after you highlighted it on the 7th Nov?
I tend to stay away from the penny stocks as the lack of volume and there seems to be too many punters. But sometimes can't help myself.
Cheers
Dwib.
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Hi guys.
I tried MXL for a while sometime back. Bought a heap at $0.12 and bailed two packets - one at $0.14 (profit) and tother at $0.11 (loss). They are now trading at about $0.08 or so, so I am GLAD I bailed when I did!
As always, this stock promises, promises, PROMISES! But as yet, the BIG promised contracts have yet to materialise. Given that they have Microsoft partnership, maybe that explainds it! hehe.
But if they really DO sign a big one, they will likely rocket - maybe 200% in a few months I would guess. However, the TIMING is the thing. I still have my eye on them and cash in reserve..... one day, one day .....
AJ
I tried MXL for a while sometime back. Bought a heap at $0.12 and bailed two packets - one at $0.14 (profit) and tother at $0.11 (loss). They are now trading at about $0.08 or so, so I am GLAD I bailed when I did!
As always, this stock promises, promises, PROMISES! But as yet, the BIG promised contracts have yet to materialise. Given that they have Microsoft partnership, maybe that explainds it! hehe.
But if they really DO sign a big one, they will likely rocket - maybe 200% in a few months I would guess. However, the TIMING is the thing. I still have my eye on them and cash in reserve..... one day, one day .....
AJ
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Oh, and good luck with trying to find a 'scientific' or 'logical' way to trade the "penny dreadfuls", Tech/A. ;o)
With my very limited experience in trading these "little monsters" (ABI, MXL, INT, EPT to name but a few), I honestly feel that the fortunes of these stocks are almost entirely in the hands of momentary market perceptions, whims, flights of fancy, rich rampers & dumpers out for a 'bit of fun' and even occasionally - just occasionally - a response to a fair dinkum, positive, no BS company news result!
But thats just my opinion. If you CAN come up with something less 'iffy' than I just postulated, I'll be the first to throw a few $quid on the barbie! hehe.
Cheers and good pickings...
AJ
With my very limited experience in trading these "little monsters" (ABI, MXL, INT, EPT to name but a few), I honestly feel that the fortunes of these stocks are almost entirely in the hands of momentary market perceptions, whims, flights of fancy, rich rampers & dumpers out for a 'bit of fun' and even occasionally - just occasionally - a response to a fair dinkum, positive, no BS company news result!
But thats just my opinion. If you CAN come up with something less 'iffy' than I just postulated, I'll be the first to throw a few $quid on the barbie! hehe.
Cheers and good pickings...
AJ
RichKid
PlanYourTrade > TradeYourPlan
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Customers CUS seems to be doing well with the recent deal and what in hindsight appears to be a saucer shaped recovery. Money will now flow in directly through the new ATMs (yes, the money machines). Worth a punt with your method tech? Most of the quick gains may have been made already but they are still on the look out for more ATMs.
Hi Tech/a,
There are definite models out their to predict the price movements.
Sounds to me that you are trying to find a model that will predict and measure the impact of news on a stock then apply buy sell limits to ensure a profit.
If you interested in these type of models I suggest: News Impact Curve, ARCH and GARCH models. Briefly these are time series models that predict the future price within a confidence limit (ie 80% confident that the price at time t in the future will be $) given the previous performance, trend, volatility, and intra collelation.
Without getting technical traders don’t use these models to trade. Why, they are time consuming to develop, hard to understand if you don't have a stats background, and they have limited accuracy.
I can suggest the following parameters of stocks that you may like to test.
Volume - The stock must have some volume. Enough volume so the share price is not strongly effected by just a few trades.
Price Effect - The variance effect of a news announcement should be felt for 2 - 3 days plus.
Support Price levels - The stock needs to exhibit Support levels (ie a price the stock seems to be hovering around.)
Given the above stock type and information, this will allow you determine a Support price level to buy into and measure the expected effect of a news impact (initial impact). Given the expected variance and time lag of the effect you can set your buy/sell limits.
Can I suggest small to mid cap miners/explores, even if the price is up near the 50cents mark.
The above analysis is not suited to a day trading environment of large % gains and losses. Why, the data is hard to measure and even harder to predict. This type of data is effected by rumors and punts. Might as well play roulette.
Keep searching for that golden model. Regards, DaBubbA.
There are definite models out their to predict the price movements.
Sounds to me that you are trying to find a model that will predict and measure the impact of news on a stock then apply buy sell limits to ensure a profit.
If you interested in these type of models I suggest: News Impact Curve, ARCH and GARCH models. Briefly these are time series models that predict the future price within a confidence limit (ie 80% confident that the price at time t in the future will be $) given the previous performance, trend, volatility, and intra collelation.
Without getting technical traders don’t use these models to trade. Why, they are time consuming to develop, hard to understand if you don't have a stats background, and they have limited accuracy.
I can suggest the following parameters of stocks that you may like to test.
Volume - The stock must have some volume. Enough volume so the share price is not strongly effected by just a few trades.
Price Effect - The variance effect of a news announcement should be felt for 2 - 3 days plus.
Support Price levels - The stock needs to exhibit Support levels (ie a price the stock seems to be hovering around.)
Given the above stock type and information, this will allow you determine a Support price level to buy into and measure the expected effect of a news impact (initial impact). Given the expected variance and time lag of the effect you can set your buy/sell limits.
Can I suggest small to mid cap miners/explores, even if the price is up near the 50cents mark.
The above analysis is not suited to a day trading environment of large % gains and losses. Why, the data is hard to measure and even harder to predict. This type of data is effected by rumors and punts. Might as well play roulette.
Keep searching for that golden model. Regards, DaBubbA.
I've been using the Tech Trader scan on all the ASX stocks since January and some interesting stocks that have shown up in the 1 - 50c range and the date of the scan, price on that date and last closing price are as follows:
AGM 04/4 .27 .395
AND 23/2 .385 .415
CBH 16/1 .29 .47
CMX 21/2 .395 .51
EXT 16/1 .042 .145
INL 12/4 .11 .135
MND 21/2 .325 .40
NMC 15/4 .084 .10
SDL 21/2 .058 .085
Food for thought?
AGM 04/4 .27 .395
AND 23/2 .385 .415
CBH 16/1 .29 .47
CMX 21/2 .395 .51
EXT 16/1 .042 .145
INL 12/4 .11 .135
MND 21/2 .325 .40
NMC 15/4 .084 .10
SDL 21/2 .058 .085
Food for thought?
RichKid
PlanYourTrade > TradeYourPlan
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emma said:
Very interestig Emma, not surprising that almost all are resources stocks, the list is short so I assume these are a personal selection. So is that just the normal TT scan limited to 1c-50c stocks that you use or is it the TT MicroCap Scan mentioned in this thread by Tech? This scan might be an extra filter to use for discretionary traders to limit the universe...Still following this Tech?
The scan is run over all the stocks in the ASX - I'm running a small Tech Trader portfolio (but not using margin) as well as a paper trading using some of these small stocks that come up just to see how they could be traded.
The scan usually turns up a few stocks each day e.g. my April watchlist has 34 stocks on it of which 14 have have gone down since the date they were put on the watch list but that leaves 20 that have gone up with varying degrees of success.
About 3 of those that have gone down appear to be forming a flag - that could present other possibilities.
The scan usually turns up a few stocks each day e.g. my April watchlist has 34 stocks on it of which 14 have have gone down since the date they were put on the watch list but that leaves 20 that have gone up with varying degrees of success.
About 3 of those that have gone down appear to be forming a flag - that could present other possibilities.
tech/a
No Ordinary Duck
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Yes still looking at the comments.
I have a bit to input but not the time to until the weekend so will get back then.
I have a bit to input but not the time to until the weekend so will get back then.
tech/a
No Ordinary Duck
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Well I have made some headway and while not tested through tradesim or other software I have had some good results.
I frankly dont like discretionary trading as most know as I cant measure it and quantify it.
As such I wont use it for longterm investment.
However the idea of picking up a few K from a 10K trade once a week or even a few a month,has always had me interested.Particularly as I have a ticker on my desk and it has an alert function where every 15 mins it shows biggest winners,losers,%gains,%losses,highest volumes and highest number of trades.I have watched 100s of opportunities go by.
But of late have tried again with pretty good results.
1 win of 5.5k
2 wins of 3-400
One loss of 400 and another of 350
2 open trades one 500 loss and the other 1500 win.
In the process of ditching the full service broker for these trades. Too slow and too expensive.
Anyway this is what Ive found.
(1) Use cheap online broker.
(2) Be patient.
(3) I buy 1/2 first then if it rises 4 ticks the other half.First half I buy at support if I can.
(4) Set really tight stops and dont be afraid to leave quickly and return again if resistance on intraday chart is broken.
(5) Set a profit target at at least 4 X risk (I'm using 2% of total trade capital on each trade).
(6) Most fly from announcements I find if I can buy on the day of announcement the best exit is OPEN the next day when others come on late.
(7) Entries are simply from the alert Quick % gain on volume and large number of trades. I have a look at the intraday chart(You can see one here on the Yahoo link above) and if its broken out of resistance or out of a retracement then Im in.MUST LOOK OBVIOUS.
I look for announcement and the most meat it has to it the more Ill invest.
Currently on FXR and AGM (again).
Ill do some more figures and report back if interested.
I frankly dont like discretionary trading as most know as I cant measure it and quantify it.
As such I wont use it for longterm investment.
However the idea of picking up a few K from a 10K trade once a week or even a few a month,has always had me interested.Particularly as I have a ticker on my desk and it has an alert function where every 15 mins it shows biggest winners,losers,%gains,%losses,highest volumes and highest number of trades.I have watched 100s of opportunities go by.
But of late have tried again with pretty good results.
1 win of 5.5k
2 wins of 3-400
One loss of 400 and another of 350
2 open trades one 500 loss and the other 1500 win.
In the process of ditching the full service broker for these trades. Too slow and too expensive.
Anyway this is what Ive found.
(1) Use cheap online broker.
(2) Be patient.
(3) I buy 1/2 first then if it rises 4 ticks the other half.First half I buy at support if I can.
(4) Set really tight stops and dont be afraid to leave quickly and return again if resistance on intraday chart is broken.
(5) Set a profit target at at least 4 X risk (I'm using 2% of total trade capital on each trade).
(6) Most fly from announcements I find if I can buy on the day of announcement the best exit is OPEN the next day when others come on late.
(7) Entries are simply from the alert Quick % gain on volume and large number of trades. I have a look at the intraday chart(You can see one here on the Yahoo link above) and if its broken out of resistance or out of a retracement then Im in.MUST LOOK OBVIOUS.
I look for announcement and the most meat it has to it the more Ill invest.
Currently on FXR and AGM (again).
Ill do some more figures and report back if interested.
RichKid
PlanYourTrade > TradeYourPlan
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tech/a said:
Tech,
I recommend CommSec (19.95 per trade for small parcels), as much as they can be a pain they are the cheapest and most efficient imo. One options trade a quarter and you get their full platform, otherwise the basic level is free. You can just buy a $0.001c option if you want for about net $36 brokerage to keep it going per qtr. There's a link here on ASF to the old ProTrader platform that's better than their new one, pm me for help if you need it.
Looking forward to the results, not a bad time to ride these.
