March 28, 2014
I began OTC (Over the Counter) penny stock trading 4/23/13. I had practiced my strategy for a year using virtual trading and recording results in Excel before making my first penny trade. My first month of trading saw three ticker losses in a row in VPIG, MDBX, and MJNA. I almost gave up but after a week of soul searching, and with a strategy tweak, I saw the following 7 ticker gain streak:
$NORX +40%
OTCQB oil exploration
Buy $.81 5/22/13 Sell $1.13 6/10/13
$BKYI +30%
OTCQB bio-authentication
Buy $.28 6/10/13 Sell $.365 7/1/13
$NTEK +69%
Pink Current entertainment
Buy $.0755 7/1/13 Sell $.1279 7/8/13
$SCRC +52%
OTCQB pharmaceuticals
Buy $.656 7/9/13 Sell $1.00 7/11/13
$SGLB +80%
OTCQB laboratory services
Buy $.065 7/12/13 Sell $.117 7/18/13
$BNLB now $FTLF +19%
OTCQB fitness products
Buy $.1805 7/25/13 Sell $.215 8/7/13
$FLST +127%
OTCQB fuel
Buy $.13 8/2/13 Sell $.295 8/7/13
In the course of three months I had turned $1,500 into $13,500. The last two trades, FTLF and FLST, is when I decided to stop going all in and to start trading 2-3 at a time. You’ll notice my holds were mainly QB and for less than a month.
Duplicating these results of 7 gains in a row has been tough. Most haven’t seen the highs I sold at. NTEK has been a great flipper stock, as I have traded 4 times for gains since the first trade.
My goal has been to identify why I haven’t been able to be on a new 7+ gain streak. I’ve tried identifying why and will be making personal changes.
Here’s what I did back then:
+ 2-3 day uptrend
+ Recent PRs
+ TA with high volume and 30 ADX with +DM above -DM
+ Positive ticker board presence on iHub
My strategy was simpler then. I didn’t care about promotions, whether a company had Revenue, what the shorting volume was, or if dilution was occurring. The UPtrend strategy I use now includes the above due to my GLCO trade that ended my lucky 7 gain streak. I lost 40-80% by the time I sold GLCO, and it was due to dilution, no company Revenue, promotions, and failed company promises in PRs.
My strategy evolved into (I know many have wanted me to change long ago):
+ A chart uptrend of 2-3 days.
+ High volume trending over 2 weeks-> If news from the company is coming out then this will be a given.
+ Regular OTC/SEC filings with Revenue-> Revenue doesn’t mean the company will succeed and having regular filings doesn’t seem to aid in my trading gains, though QBs seem to provide more reliable gains.
+ Momentum and other TA indicators pointing to buy-> Need to decrease number of indicators looked at.
+ No or little dilution-> If I’m in a ticker this long to be worried about dilution then in heading for losses anyway.
+ News or PRs signaling company progress
+ No paid promos recently-> With quick trades this won’t matter.
I started the $UPtrend Pennies$ board in June 2013 on iHub. I was on a trading euphoria from my first two ticker gains in a row after coming off my first three ticker losses in a row. I had made the board to document my future trading progress, how to use my strategy, and to make friends.
Much has been learned since then. I now follow many aspects of penny trading, have many friends, traded tickers I shouldn’t have, created a blog, and have a pretty complex strategy now. I also moderated 5 iHub boards.
I’ve dabbled in posting on ticker iHub boards. Mainly negative CTDT posts, April through December 2014, and positive BBDA posts, January through now 2014, as an experiment to see if posters would respond when threatened and if trading decisions are effected- they do and they are IMO. This posting can be seen as pumping or bashing, but am I a pumper or basher if I hold $0 position while posting? Conundrum eh?
Now, today, I feel the following had contributed to my lack of lucky 7 gains:
– Too much iHub posting: over 3,500 posts in a year.
– Moderating iHub boards: Why do I need to moderate outside UPtrend Pennies?
– Too complex of a strategy: Will I really find a REAL company to hold stock longer than 365 days?
– Listened to other trader alerts and traded too late: Resulted in losses or extending my estimated holding period unnecessarily.
– Researching too much: Again, will I find a real company to hold long-term?
– Diversiffied into too many tickers traded at once: This has been changed.
– Held contests that distracted from my time and pursuit of gains.
Another reason for my losses after a winning streak is the Gambler’s Fallacy. Read more about the Gambler Fallacy at Business Insider. This article offers a twist however with researchers from the University of London showing probability of winning in horse bets in London actually increasing as a hot streaked continued. I’ve read similar articles that point out that not all activities are truly gambling and focus becomes greater during a winning streak.
I’ve had a few trader mentors that I looked up to and defended. I approached them for stronger relationships and was denied. Those mentors warned me to avoid hot streaks and trade with no emotion. I’ve learned penny trading for many means having no transparency or trading for self. I believe in networking, helping others, and to pay it forward. And so my attempts of developing relationships around trust, transparency, and mutual benefit often is challenging during OTC networking.
It’s time to KISS (keep it simple smarty) away some of my trading complexities. I’m doing a disservice to myself and trading friends otherwise. Only one thing matters to traders: GAINS and PROFITS. If I’m not providing winning trade suggestions then I’m useless, even if I’m your friend along the way.
Here’s my latest OTC penny strategy:
+ 2-3 day uptrend
+ Recent PRs from company
+ TA with high volume, PSAR of buy signal, 30+ ADX with +DM above -DM, and CCI above 0 or oversold below -100.
+ Positive ticker board presence on iHub
I’ll probably trade mainly ANN (AMEX, NASDAQ, and NYSE) and QBs at this point. QBs are generally audited and have recent financial filings. I find QBs to have less risk of loss versus Pink Sheet tickers while still seeing quick results. Why QBs versus Pink Sheets? QBs have audit and $.01 requirements which causes the effects of dilution to be slower on these tickers’ pps. I’ll want to hold a ticker no longer than a month, because penny stock time sees results faster than with ANN tickers.
I thank you for your presence along my OTC penny trading journey and I hope you’ll continue with me. My trading now includes stock/ETF options since September 2014.
toohightoolo 