Fellow Traders,
On this nice sunny Saturday morning, as usual I am revisiting the week action and we definitely had a mix of hard work and some luck in finding FNMA and FMCC (the 2 biggest winners over 4 days of trading in penny stocks in a long time.) To see runs of 260%, you normally need a few weeks on stocks of 0.25 and above.
So I decided to revisit a lesson I did many months ago and it basically shows you how to use multiple time frames to stay in winning trades. I will even give you some tips on one mistake I did by selling my FNMA at the end of the day Wednesday instead of keeping it for another push on Thursday.
I know some of you have kept it and congrats, my goal is to give you good ideas and what I think are good levels to enter the trade, but then after this the management part is also very important in maximising gains. I will only use the chart of FNMA for this lesson, but the same applies to FMCC.
First point very important, when 2-3 stocks of the same sector are seeing massive buying, you know there are some LARGE BUYERS BEHIND IT…It can be institutional buyers or short sellers that started at much higher prices and need to close their position for any reason. In FNMA and FMCC it can be either of those reasons and I don’t really care.
Now once the stock started the week on Monday, it showed strength right away and continued it’s move without a pause, that is another big sign (and don’t forget both stocks FNMA and FMCC were moving in sync.
Click Here To Read The Trend Analysis Report.
By using a smaller time frame, you are able to find the real trend under a move, sometimes the 60MIN chart will show you the way or other times in very aggressive moves it will be the 15Min chart, and you need to see where it gets the support to find the proper time frame.
Click Here To Read The Trend Analysis Report.
In this case Monday afternoon we could see the 15Min was the way to go….
The proper way to exit the trade on Thursday was first, knowing there was a GAP at the end of a run, it normally signals that the end is near, as the crowd of rookie is rushing into it…..and gapping the stock..
Click Here To Read The Trend Analysis Report.
But looking at the first big red bar on big volume, taking the stock from 1.47 to 1.27 was showing the end of the move….
So these reviews of my trade are very important and help me learn to recognize the key elements that help maximize future trades…But don’t get me wrong, the return on this trade has been VERY VERY good, but there is always a way to do better….and improve our skills…
Click Here To Read The Trend Analysis Report.
As far as LOSERS go, they are now very easy for me to handle, as when the stop loss I set before taking the trade is met, I am out in no time. And in the case of a good stock, you will see strong volume, the bids move up, the buying is on the offer and you see it move, then it pulls back a little and continues its run, if there is no continuation of the move after a normal pullback (using a 15min or 5min or 60 Min chart) I simply kill the trade and move on or wait for the stock to reset and give me another entry point with a proper setup. Don’t forget my Motto..I only love stocks that move and make me money, I don’t fall in love with them…
So I hope this lesson is going to help you in your future trades.
Also as usual I did some scanning to find some good trades for next week, but I don’t see any very clear conviction trades, but I will give you a few and remember these picks have to start moving well on Monday at some point and the volume that I like needs to continue Monday and even increase.
IDOI is another idea, but as I said these are ideas and depending on how they trade Monday, we will decide…..
If you haven’t already done so, I invite you to join my newsletter for more trading lessons and trades ideas. Just sign up on any form on my site.
Enjoy your weekend and I will get ready for Monday and we will have other picks coming along the week.
George
