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Forums > Penny Stocks Stocks below 5 > Penny Stocks on the Move Navigation:
  • PHOT(1) Replies

    Trade Ninja
    Bronze Member
    Join Date:01-10-2014
    El Paso, Texas
    United States
    Posts: 10
    Replies: 15
    PHOT1/22/2014 3:04:16 PM
    I purchased PHOT today at $0.216.  I saw that is was bouncing strongly off of the 26 period Moving Average and I took the opportunity to get in.  Here is the chart..




    Here are the things that I noticed that convinced me to buy:
    • RSI (top graph above chart) came down from being over bought to the 50 and turned up.  Means the stock has some room to move
    • The trend of the 50 period Moving Average is UP...I never buy if the 50 MA is in a down trend (green line below the chart)
    • The price of the stock, after a great advance came back down "Bounced" off the 26 period Moving Average (red line below the price chart).  This is a great sign, especially when it bounces with power.
    • MACD histogram down below the price chart (blue bar graph) is below zero and shows that the stock has a lot of room to move up.
    I would expect continuation tomorrow, and I am thinking at this time that a new up swing is starting.  We won't get confirmation until tomorrow, but it looks like the timing is right to buy.

    I bought one half of my position today and if the market moves in my favor tomorrow morning, I will buy the other half.

    I like to split my purchases in half.  That way if I am wrong, I am only in half a position and can take my loses quickly.  On the other hand, when the stock goes my way and I am already in a money position, I can add to my position with little risk (of course timing is still important).

    I am in the money now, let's see what happens tomorrow :-)



    • Update on my PHOT Trade(1) Replies

      Trade Ninja
      Bronze Member
      Join Date:01-10-2014
      El Paso, Texas
      United States
      Posts: 10
      Replies: 15
      Update on my PHOT Trade1/30/2014 10:09:04 PM
      I added to my position at $0.23, $0.24, $0.25, and $0.27.

      IMPORTANT TIP:
      It is important to note this very important trading habit...ADD to your position as the stock is moving UP.  Many people believe that the best time to add to their position is when a stock goes DOWN (also called Averaging Down) so they can effectively "lower" their break even point, so when the stock goes back up, they will be in the money sooner.  This is a VERY dangerous habit to get into.  

      If a stock that you are in moves AGAINST you, consider instead that your decision to get into that stock at that time might have been a mistake.  Instead of looking for another ENTRY point, you should be looking for an EXIT point.  Don't throw good money after bad...

      Instead, learn this very profitable habit...ADD to your position ONLY when it is moving UP.  If your stock is moving up, look for other opportunities to get in again once the stocks direction has been confirmed.  Keep an eye out for when a stock moves back to its 50 period Moving Average on the 5 minute chart for another excellent opportunity to get in.

      Here is an updated chart:



      Notice the RED candlestick two days ago...I actually closed all my positions on that day.  I closed all my positions at:  19.4%, 18%, 8.2%, 2.8%, and -8.3%.  Yes, my last trade was a loss.  I made that last trade thinking the stock was going to continue up.  As soon as I saw weakness, I dumped everything and took my profits off the table.  Still a great, great trade for just a few days of work! :-)

      ANOTHER IMPORTANT TIP:
      Notice that the last 2 days have not taken the stock lower.  After the red candlestick of 3 days ago when I got out, I expected the stock to drop down to the moving average.  It didn't...If a stock SHOULD go down and it doesn't, then it will probably go UP.  The last two days have been sideways days.  Sideways is a tip that the stock is taking a breather before continuing up.

      I actually took on another position at $0.27 and $0.28 because of my gut feeling that this stock might continue up tomorrow.  NOTE:  When you are playing a hunch, you don't go in aggressively.  These two positions are SMALL positions.  There is just as much of a chance the stock could go down as up at this point, so I am cautiously optimistic on this trade.  If it goes against me on this, I will dump it immediately.  If it opens up tomorrow, then I expect it to continue upward for a couple more days.

      Only time will tell...Let's see what happens.  In any event, I have a great gain in this stock and I will protect that gain.  Never give back money you earn in the markets...pay yourself for your efforts.
      • PHOT Trade Update Feb 4, 2014(1) Replies

        Trade Ninja
        Bronze Member
        Join Date:01-10-2014
        El Paso, Texas
        United States
        Posts: 10
        Replies: 15
        PHOT Trade Update Feb 4, 20142/4/2014 10:35:00 PM
        Looks like my "gut" feeling turned out pretty good.  My two positions at $0.27 and $0.28 are working out very well.

        Now I have another problem...it is a good problem to have in this case but it is a problem nonetheless...perhaps you have had this problem before.

        DO I SELL and take my profits and run?  OR, do I hold and "hope" for more?

        I am sure you have all heard the saying, "Bulls make money, Bears make money, but Pigs get slaughtered!"  Translating the trading jargon, this basically states that greed will always cause you to LOSE.

        I considered this question very carefully before the close and decided "rationally" to HOLD.  Here is the chart...I will explain my rationale for breaking all my trading rules. ;-)


        Ok, here are all my trading rules and why I have convinced myself to BREAK them on this trade.

        1.) Always sell on the 3rd day up:  This rule has made me tons of money.  It is based on the very strange but consistent fact that stocks tend to move up (or down) in 3 to 5 day moves before reversing (pull back to support).  Notice the 3 UP days.  To follow my rules, I would be out today with a very nice profit.

        2.) Always sell at resistance:  Overhead resistance is a very important thing to pay attention to.  There is major resistance at the prior recent high of $0.40.  The high of today was very near $0.40.  To follow my rules, I should have sold today.

        So the BIG question is WHY DIDN'T I SELL?  I will call it another "hunch."

        I spent a full 15 minutes studying this chart before the close and the price action and convinced myself that I should wait one more day before selling.

        Here are my reasons for Holding:
        1.) The day ended very near it's high.  Usually, when a stock (after a strong upward move) closes near its high for the day, there is still some momentum that should carry over to the next day.  Notice the stock closed very near its high.  I am thinking it has a bit more to offer.

        2.) Usually, on an up move, the last day of the move will have a larger daily range.  Daily range is the difference between a stock's high and low for the day.  Right before a stock is ready to reverse, you will tend to see a very large range indicating extreme optimism in the stock with buyers pushing it higher and higher, only to have it fall like a rock the next day. (Notice the move around February 7th or so...see how you have a LONG white candle going up...then a LONG red candle coming down on the next day.)  This is a very typical occurrence.  Now take a look at today's move...today's range is not really much larger than any other random day in this stock, so the "excitement" hasn't hit its peak.  In my thinking...the party hasn't started yet, so I should wait one more day to see if the party gets started.  If it does, I will ride it as high as I can and then dump it at any sign of a reversal.  

        SO....I decided to stay.  Only time will tell if this "hunch" will pay off for me.  There is a very good chance that I could be wrong, in which case I will lose a bit of money.  On the other hand, if I am right, there is a good chance to to add significantly to my earnings.

        I am already up about 40% on this trade in the last 3 days so I am not concerned that I will lose any money on this trade...on the other hand, those earnings were earned by a lot of time an effort to learn how to trade so never consider earnings as money you can "throw away".  You should always shoot to maximize your wins.  

        I spent a long time before the close analyzing my strategy on this trade, and in the end, I decided it was worth the risk at least to see how the stock opens in the morning to see if there is continuation.

        How will I play this?  IF, the stock opens UP, then I will stick with it and trail it up with a stop order just below its 50 period Moving Average.  The moment I see weakness, I am out.  My objective will be to try to get a few more percentage points.  IF, the stock opens DOWN, then I will sell immediately and protect most of my profits on the trade.

        OK, enough said....let's see what happens...I put my money where my mouth is, now it's time to see if I am a PIG!  :-)
        • PHOT Trade Update Feb 5, 2014(0) Replies

          Trade Ninja
          Bronze Member
          Join Date:01-10-2014
          El Paso, Texas
          United States
          Posts: 10
          Replies: 15
          PHOT Trade Update Feb 5, 20142/16/2014 7:49:25 PM
          (delayed update)

          Turns out I AM A PIG! :-)

          PHOT actually did go up as I expected and I did have the opportunity to get out at $0.42 but I was thinking it might continue up.

          I stepped away from my PC and the bottom fell out (happens more times than I would like to admit).

          PHOT dropped 5 cents in 15 minutes.  I patiently looked for a better exit and was able to get out 3 cents higher.

          I closed my two positions out at $0.38 for returns of 40.7% and 35.7%.

          Not bad for a couple days in the market!

          I will now wait for another opportunity to get in again.