The inventory market is closed right now in observance of Washington’s Birthday.
Most of us simply name it Presidents Day. Does it matter whether or not it’s Presidents Day or Washington’s Birthday?
It might sound unusual to separate hairs over particulars, but it surely brings up an necessary lesson…
In buying and selling, particulars matter.
For instance, take my latest $460 win on Nitches, Inc. (OTCPK: NICH).
The particulars — particularly what I noticed on Degree 2 — stored me within the commerce after I’d usually get out.
Studying Degree 2 is among the key expertise you want to grasp. Particularly for buying and selling OTCs.
First, let me clarify the NICH setup. Then I’ll clarify how I used stage 2 to handle the commerce…
NICH: the Setup
On February 9, NICH was a multi-day runner with a multi-day breakout…
As you may see, NICH ran for 3 days in January earlier than consolidating for 5 days. Then it spiked once more, hitting a excessive of 66.7 cents per share on February 7.
Now take a look at the multi-day chart displaying the breakout stage at 66.7 cents per share…
The breakout stage was key to how I used Degree 2 to handle the commerce. Hold it in thoughts as you research the February 9 intraday chart with my commerce entries and exit…
As you may see, I purchased the dip off the morning spike. It’s one in all my commonplace setups after I suppose a inventory can maintain operating. Right here’s my entry remark…
02/09 9:40:25 AM — Purchased 6500 shares $NICH at 0.7 — Partial fill on this large spiker breaking out of latest vary, small place as a consequence of much less liquidity and it’s over-extended however let’s see how far this could go, minimize losses if no additional spiking.
I might have cherished to get this at a lower cost. However it was transferring quick and I didn’t wish to chase so I purchased the dip. Then I tailored based mostly on what I noticed on Degree 2…
Learn how to Use Degree 2 Information to Handle a Place
First, I added to my place regardless that my entry remark mentioned “minimize losses if no additional spiking.”
Then, I held it for an additional half-hour. In the event you comply with my trades you realize that I’ve the persistence of a gnat. Holding an overextended penny inventory for half-hour isn’t my regular MO.
Bear in mind, the multiday breakout was at 66.7 cents. I added to my place at 66 cents. That bought my common all the way down to roughly 68 cents per share — extra in step with the place I want I’d bought into the commerce within the first place.
Why did I do it?
When it dipped slightly under 66 cents on gentle quantity, I didn’t suppose it was dangerous. I really tried to get shares under 66 cents. And when it got here proper again, it held the multi-day breakout stage.
However what actually gave me confidence was an enormous bidder.
Degree 2 confirmed a 63K share bidder at 66 cents per share. The bidder first confirmed up at 66 cents, then 67, 68, and as excessive as 69.5 cents — driving up the value.
NICH Commerce Thesis
My authentic thesis was that NICH may get to the excessive .70s or .80s. At greatest, I assumed it’d get to 90 cents a share when it was spiking and consuming by way of the ask. I acknowledged it as one of many greatest latest runners and thought “let’s see how far this could go…”
The each day quantity was lower than 1,000,000, in order that 63K bidder was an enormous order. If any person desires to purchase it that badly, they’re normally keen to pay slightly extra. I wished the bidder to maintain pushing it up.
So I watched, hoping it will escape over the morning excessive. At first it headed in the suitable course. However when it bought to 71 or 72 cents, there was a wall of sellers.
That’s after I realized it wasn’t more likely to get previous the excessive of day. So I bought out for a small win. It didn’t meet my objectives, however I performed the motion as a substitute of holding and hoping.
If there hadn’t been a 63K bidder, I might’ve minimize it and misplaced $100 or $200. So one indicator, which to me was a robust indicator within the type of an enormous purchaser, gave me the persistence to carry.
That’s an excellent lesson however there’s extra to it. Let’s flip the script…
What About Large Sellers?
What if there had been a 63K vendor close to the open? I might’ve gotten out virtually instantly. An enormous vendor would block any potential for an enormous spike. I used the 63K bidder as a crutch to present me extra time and persistence.
But when there was an enormous vendor it wouldn’t be definitely worth the threat. Why? As a result of the inventory was up from six cents in a few weeks. That’s an enormous transfer and it bought overextended.
I used all the indications and my expertise. My first entry wasn’t supreme however my second entry was proper on the key multi-day breakout. And I bought assist from a mysterious large purchaser who turned out to be mistaken.
My NICH commerce is just one instance of how I exploit Degree 2 to handle a commerce. There are nuances that include expertise.
Talking of expertise…
On February 22 at 8 PM ET, I’m sitting down with buying and selling legend Chuck Hughes. Chuck has lastly agreed to share the ability of his “snowballing” technique on digital camera. It has nothing to do with penny shares, however I’m tremendous excited.
On this market, it’s good to be taught new methods…
Click on right here to register for the FREE “7-Day Snowball Buying and selling Summit”
See you there.
Need extra in-depth commerce critiques that includes particulars like why it’s necessary to make use of Degree 2? Remark under, I really like to listen to from all my readers!
