William has a very interesting thread, and header here. Thought it might be worth your read. How many times, have we watched and waited for bottom, only to have the damn thing take off on us, before "our bottom" was reached. Even though I did very well on ECNC it happened to me there. I was adamant, it was going down to 1/8, sheesh .14 wasn't close enough for me.
LOL Rat dog, I luv it!
Subject 31957
"I will give my 2 minute micro-cap investing school>
Recent movers like LANV, FONR,
& BRLI have a common thread, and that thread, announced by all 3 months ago, was the
delivery of health info over the internet. I knew at some point they would get action, you
just never know when the point of critical mass is reached, but you want to own some
before the big move. And they both moved real well., the hard part of playing micro-caps is
buying. I break every "rule" here. I take an initial position. Ususally I am early, but I want to
have a position in case it moves before I fill my total buy quoto. Most times, the stock
drops from my initial buy, sometimes more than half, so I will buy 2 more times, on the way
down. I save my biggest dollar amount buy for last, usually real close to the bottom, the
point where everyone, except me, has given up, written the stock off.
Now, the most important but least understood thing in micro-cap speculation is how the
market maker works against you. This is because he will enter a huge short position in a
micro that runs up, even a little, and when the buying slows, he will walk it down,
sometimes slowly, sometimes fast, and cover when panic sets in as players see the bid keep
dropping. You have all seen it, and wondered how the heck did that happen? This why I
buy 3 or more times, on the way down.
My t/a sytems identify and sort this for me, so it makes it an even fight.
So, you can't panic and bail, do the exact opposite of what conventional wisdom tells you.
As an example, I had a position in GMAI, that took 13 months to build, at an average price
around $1.25 It ended up over $25. Same with MACE, took my time. Some will move in
a day, like PARA, 1.50 to 8, some a month, some a year, but when they move, the return
is in the hundreds or thousands of percent. There will always be a rotation, things to buy,
and things to sell. That is the beauty of the markets. My big-cap and options/futures
strategy is another story, that is where I make the serious money, and I consider it more
risky than the micro-caps. This has taken years of fundamental and technical study to get to
a point where I know how trades will work out."
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