Changes and a new path

As you have seen there hasn't been a post in the 10k portfolio for about a week now, I want to apoligize for this inconsistency. As time has carried on and I went and saw my parents for my birthday I have come to realize a few things. My path is changing in the sense that I can no longer apply the same amount of time to doing this passion, trading. My brother and I are working hard to apply some of our ideas and make them a reality. My time committment is turning towards planning financially for the months ahead. A good chunk of the 10k Portfolio is going to be deposited into our business account to pay for upcoming expenses. I apoligize for this news but know that my abilities to share and help will still definately be intact. I still love answering all emails that come my way and love reading them. I will post more about what exactly is going on as soon as I know more. All trading through the 10k portfolio is going to be suspended though for now. If you have any questions or concerns just post up a comment or send me over an email. Thanks to everyone who has posted, sent me an email, talked to me, etc. and just have helped to make this a helpful and useful blog. As I look around and talk to most of you guys I can see how far you all have come and can't wait till I see you guys trading with your own money. Look for a post next week,

To the future,

The weekend

The stock has been hovering around $.22 - $.24 and I want to get in at $.22. With the volume so dry lately is definately a waiting game to get in but hopefully something will come around soon. To go and just place an order for 40,000+ shares would get me in maybe 1,000 at $.23 and the rest at $.24 I'd guess (with orders showing as of 11:42 AM). I have a limit order to buy 45,000 shares at $.22 that has not be filled yet. This weekend I will most likely not post, and early next week I will be out of town. I get back Wednesday so at the latest check for a post Thursday. I apoligize for the lack of activity in the blog this week and hopefully I will relay a position to you next week. Have a great weekend and always

To the future,

TGC, putting the 10k portfolio to work

I apoligize for my lack of posts as of late for there really hasn't been much to post about in regards to me taking a new position. While GM bonds are getting turned to junk, oil prices are falling below $48, and Dell is on a tear, Tengasco Inc is sitting at $.21 a share and doing well, nothing. As an exploration company of oil and natural gas in Tennessee and Kansas, Tengasco Inc is tiny in size with a market cap as of today of $10 million. The company jumped out at me as I was going through my penny stock list (obtained from the search I commented on Sunday) because of its current insider attention. SC Fundamental Value Fund, L.P. has been buying this stock every chance it can get accumulating over one million shares since April 12th. The company has 48.8 million shares, with SC Fundamental Value Fund, L.P. owning over four million. What I am going to do now is simple copy paste a post I made in an investor message board:

"What I also see in their buying behavior which I didn't go into detail on yesterday was the "value buying" I had suggested. By looking at the intra-day charts and the days they bought their shares it can be seen that they didn't buy the shares outright. They simply took shares off of people selling their positions. Now, what does this mean? Well, thinking about it, they are value buying becuase they aren't driving the stock price up to get in. They are quitely taking a position without the stock price moving very much either way. The question I then ask myself is when and why? They basically are now out of debt which I honestly cannot confirm with stats. But, according to what I do have (yahoo finance) they had debt of 3.18 million until the recent sale of the land in Kansas, http://biz.yahoo.com/bw/050309/95879_1.html.I am going to quote part of the third paragraph to promote some thought,

'The net proceeds of the sale were applied to reduce the principal outstanding on the Company's promissory note dated May 18, 2004 bearing interest at 12% per annum and payable to Dolphin Offshore Partners, L.P. ("Dolphin") from the original amount of $2.5 million to $150,000 as of March 4, 2005. Dolphin is the largest holder of the Company's common stock and Peter E. Salas, controlling person of Dolphin, is a Director of the Company.'

Peter Salas (or Dolphin I am assuming) owns 16,412,452 shares as of last year March (Yahoo finance major holders). Though that is a year ago I state this to promote a belief that the company is not driving itself into the ground. It is getting rid of debt now to promote what I believe would be some type of new financing or new move to grow the company. And, since then, the 2nd largest shareholder, SC Fund. Value Fund has been buying shares every chance they get without inflating the price. Furthermore, if you go back to March (2 months ago) you will have noticed that the third largest shareholder Neil Koffler (2,445,160 as of 24-Mar-05; "Major Holders" yahoo finance) bought almost 400,000 shares in three consecutive days OPEN MARKET:

24-Mar-05 KOFFLER, NEIL H.Member 200,000 Purchase at $0.2767 per share. $55,340
23-Mar-05 KOFFLER, NEIL H.Member 95,000 Purchase at $0.2757 per share. $26,191
22-Mar-05 KOFFLER, NEIL H.Member 85,000 Purchase at $0.2785 per share. $23,672

With the sale of property in March and this consistant value buying of SC Fund Value I have enough information to speculate on some sort of move in the future. How big of a move and what kind of move? I am not sure, but with the looks of it if this company could get a big financing deal or be attractive to get bought out you could see a nice price jump. Any other ideas? The question I asked earlier and still ponder is when? How soon would something like this happen? Since I found the company on Sunday I have been trying to take a position without letting the Market Makers kill me on price but have had no luck. The last few days the stock hasn't traded more than 12,000 shares I believe it is. Anyway, I put a limit order for 45,000 shares at $.22 today and so if you see some volume tomorrow it may be me just a heads up. I am going to try and dig for more on everything but if anyone can bring any new thoughts or info to the table that would be great. Hopefully the insiders know something we don't; have a great night."

This should basically cover my thinking behind the company and what I think could potentially happen. I will post up my position if I do in fact get in tomorrow sometime. This is by far the riskiest trade I have done with the 10k portfolio and hopefully will not be the last trade of the 10k portfolio. With a 45,000 share postion each penny the stock moves will be $450 in our out of my pocket; I am sure you can see how the risk/reward works here. Speculation can be the death of you or if you are good at a great way to make alot of cash. Personally, I feel that putting $10,000 on the line for something like this is worth every penny of it, and time will tell how profitable it really is. There will be some sort of rememberance out of this one I can gaurantee you, so sit back and enjoy the show.

To the future,

Penny Stocks, the playground for the nuts

I am sure everyone has heard of penny stocks, or companies that are trading under $1 a share. Everyone has heard about success stories, great tales of investors making millions off these. After all, the more they go up, the more you make right? Well, what people may not know is that penny stocks are the riskiest type of trade you can do on the market today. Day trading is one thing, messing around with companies that are worth pennies is another. Furthermore, you can take it even one step further by putting your whole account on line. The most risk, the most reward, right? Well, this week I am going to attempt to pull of a big trade, which will make my account or could potentially put the 10k portfolio out of business for a while.

To give a perspective of how volatile these bad boys really are, I will try and give some examples of what I have seen and been through. The biggest run up I have ever been a part of was a 623% move in literally three days. Sadly, I did not run it for its whole move, but I did get 100% returns out of part of it. In one day I ran a stock for a 20% move, that one was sold out during food and cultures class in high school. I have ran a stock up to a 70% gain to see it come down in less than two weeks to a 20% loss; those are no fun. The worst I have ever been a part of was a 80% gain down to about about a 60% loss. You can loose your rear or be having a nice dinner celebrating a victory within a few days or even a few hours; but that's all part of the game with penny stocks.

What makes these stocks so price volatile? Well, first off there is no institutional or mutual fund ownership. Usually you will not see too much instituional representation until a stock passes $5 a share, but every stock is different. You also hold more shares for your money, so instead of buying maybe a few hundred or maybe a thousand you are buying now 10s of thousands. If someone decides to buy or sell big; it can usually move the stock. What is the strategy for buying these types of stocks? There are a few important things to look at and watch for:

1. Companies getting heavily shorted
2. Companies going under
3. Companies with very low avg daily volume.

What I am going to be looking for are companies that are:

1. Possibly undervalued
2. Trading as much as volume per day as possible
3. As big as possible (usually massive companies can hit quick downturns, and also quick upturns).
4. Are in a favorable technical pattern

Any advantage I can possibly have when taking a position I want, EOM. I am going to do searches for stocks under $1 a share avergaging at least 100,000 shares a day (which may not be enough) and that are in well performing industry groups. The market still isn't predictable or favorable right now which really isn't a positive but what can you do. When it comes to finding companies with "Great earnings growth, sales, etc" you can basically go try to find a needle in a haystack, because you probably won't find any. News is a huge factor that can swing one of these puppies one way or another, so I will also be looking for any speculative news coming out that could be big. I am going to try to stay away from companies that are indefinately going under for that's the last thing I want, is to loose everything. I have traded pretty low priced stocks before in the 10k portfolio, but this trade is going to set a new record (hopefully a memorable one, haha).

I will post later on what I find and my thinking behind the company. Check for some options later on. Have a great afternoon,

Wednesday's Lesson, Intra-Day Buying

When you have a stock picked out and you want to get it during the day to get the best price, what time should you buy? The fact of the matter is is that it depends on what type of trade you really are doing. The ones I have been performing have been reliant on every penny for every penny is a good portion of money. Furthermore, I have been doing volatile trades where things can quickly change. If I am buying for a 2 year hold, do you think I care about where I get in as critically as a day hold? After the ARDI mix up I realized that I had made a basic mistake that I knew I shouldn't have; don't buy in the early morning hours, especially with a downtrending stock. The type of trade ARDI was was like trying to catch a falling knife. Image someone holding a knife in the air, you put ur hand out and without moving it upwards or downwards u try to catch the knife as it falls. Well, think about it, if you miss the knife then the knife hits the floor, if you catch the knife by the handle then you are ok, but what if you try to catch it and cut yourself on the blade? Same thing with trying to catch stocks that are on a downswing; you have to catch it perfectly. If I think a stock has bottomed out at $5 a share, I buy in, but the stock then runs all the way down to $3, well did I catch that knife? What if I buy in that same stock at $5, but it then trails down to $4.80, well then I caught it but I am bleeding, should I just let go? In the end, unless you catch it perfectly at the handle you are always in a tough call situation. ARDI I caught it at what I thought was the handle, in fact I was literally maybe a centimeter off, I started to bleed (maybe $.02 or so) then let go. ARDI had a support level of $2.50 which is where I sold out; that day its low was $2.47. Now the stock is at $2.77 which is what I originally predicted. Since I didn't know how far down it was going to go, I decided to let go and heal my wound.

I hope you can apply this way of thinking to your own trading one day or in your next trade because it is important. So many people (including myself) will think, "Hey, this bad boy has bottomed out, it is so cheap it is bound to go up." ERRR, wrong. You NEVER KNOW what a stock will actually do. Between news, trading sharks, and Money Makers, it is always a gambling game, remember that. I only lost about $100 letting go, but I have lost 10s of thousands by holding on for too long. THE MENTALITY OF "IT WILL COME BACK IT WILL COME BACK" will EAT YOU UP if you don't control it. I can't stress this enough, just stay disciplined!! There are many more opportunities out there; the game will always be around. I have played this game many times and have learned great timing. Either way my timing can still be off. If you catch them right there can be big rewards waiting for you; that is the risk you take. In my eyes, I live to take those kind of risks because that is what I love, the challenge of catching it just right. ARDI was almost caught perfectly but I was off but a few centimeters and now I get to watch it run up (at least Thursday and now today). I can either stare at it and think, "I am stupid I am stupid" or go "Where was my timing wrong..." What sounds more time beneficial to you?

So, this is exactly what I spent the past day doing, just looking and staring not only at the chart but at the intra-day buying trends of that day. I realized that my mistake came when I bought too early in the morning. The best time (which i eventually remembered from a past lesson) to buy (this is just my belief for catching a falling knife and only a falling knife) is towards the end of the day. 9 out of 10 times the "bounce" day or days start right in the morning with an upward trend. If you can (by looking at a chart and buying behavior) get in at the end of a previous day at a steal price, then if the next day it opens up to a quick upward trend, well then you know you are ok, but if not, and it is even the bit questionable, get out with discipline. ARDI closed around its low to open up the next day up and now as I type it is claiming new intra-day highs (sad for me, good for a great lesson). So, now I am going to apply this to our next trade, and believe me, we are going right back to catch one of these knives. My account still isn't tradable; hopefully I will be able to do something Monday or the latest Tuesday. I will prepare this weekend for the next round, so check for a post sometime Saturday or Sunday.

Have a great weekend,

Discipline, Experience, and Trusting your gut

Shortly after I got into my position in ARDI this morning I opened up DailyGraphs (my chart service) to check out its chart again. There is a saying that goes something like, "Trust your gut" and what I saw was something that could not be ignored. I have looked at 10s of thousands of charts in my short 3 year run trading and this is a pattern that I do not like at all. Look closely at the graph below and you will see the ARDI in a daily chart. Every Vertical line represents a seperate day and if the line is red that means it was a down day and if the line is blue that means it was an even or up day. Now, what is CRITICAL in this pattern over the last 3 days (since the gap down last Thursday which is denoted by the gap in lines) is how it looks like the edge of a cliff. If you can imagine running to the edge of a cliff, slidding on ur feet, then stopping right at the edge off balance; this is what the pattern is. The volume (which is the vertical lines below the price) has decreased every day. The stock has lost its volatility upwards because of this pattern and is in a heavily bearish position. What happens 9 out of 10 times is that the stock leans too far over and falls to new lows.


ARDI Bad Setup Source: DailyGraphs.com

The edge price was $2.50 which in an intra-day is the price that gets the most support before collapsing (today it had about 15,000 shares of support). I ended up getting out at $2.50 and after everything the trade costed me $102.40. My account balance now is $10,073.28 but I feel much better. This in my eyes is a loss for the records because I should have looked at the chart closer than I did. I am lucky to have gotten in at a competitive price because this mistake would have costed me much more. I will not be able to trade my account till probably Friday now or Monday depending on how long it takes for my orders to process. Check for a post later on tonight or tomorrow putting ARDI in a conclusion summary. Have a great afternoon,

To the future,

ARDI early morning special?

ARDI opened to a buy at $2.57 and bounced around the $2.55 range shortly after. For the next 20 minutes the stock just sat with little resistance either way (about 400 to 800 shares). With my 4,000 shares order this would not be a possible buy in. For me to buy in would cause the stock price to jump and I would have lost on the deal. So, I decided to wait around for a good opportunity to get in. I was waiting for someone to sell a few thousand share order so that I could quickly get in at the lower ask. Look below and you will see what I did. At 9:54 someone dropped about 5,000 shares which brought the ask to $2.52. Since I already had my order ready I quickly responded and bought in at the new ask. Can you see where my 4,000 shares got in under 3 seperate orders?


ARDI order on the fly


As of now $2.52 is the best Ask price on the market for ARDI (meaning there hasn't been a lower Ask yet) so I definately shopped well. Also, for comparisons sake, if I would have bought my 4,000 shares at the open at $2.57 (considering I got in) versus the $2.52 where I got in would have cost me $200 more. But, because I can see the intra-day patterns and waited patiently not only did I get a great price but I also saved myself $200.

So, now I stand with my 4,000 shares of ARDI waiting for a few buyers to get the price in a comfort zone, haha. Something else to note this morning, AXYX which I got out of the past two days at $1.24 and $1.23 is currently at $1.14 (down 6.56%). Earnings came out late yesterday and I am guessing it is reacting to them today.

Have a great morning,

ARDI, the next play

Alright, so I went to work shortly after posting this afternoon on the AXYX completion to stumble upon ARDI (At Road Inc). I found it through one of my old "gapping down" searches that I had done through Dailygraphs.com sometime last week. For memories sake the search finds companies that meet the following criteria:

- Current Price between $0 and $30 a share
- Current 50-day Average volume 100,000 shares +
- Current Price % Below 50-day Moving Average 30%+ (meaning the stock is trading 30% or more below its 50-day Moving Average)

The stock closed today at $2.54 (it was at $3.42 literally last Thursday) and it today claimed new 52 week lows. The stock got hammered last week as earnings got posted and the company "didn't meet analyst expectations". The stock also got downgraded by three different firms which didn't help the cause either. (Note that these facts and all the information going forward is literally all from yahoo finance).

Why does this kind of company catch my eye? Well, in my opinion I think it overreacted to the news. Two of the three analysts simply downgraded the stock down to "hold" from "buy" which is understandable, and one of them put a $3.50 target price on it from $6. The financial loss was mostly due to the fact that the company had bought out Vidus Limited. Revenues rose to $20 million from $17.9 million while revenue was expected to be $20.6 million. As well, the company's cent per share loss was greater than the $.01 per share loss expected by analysts.

So where does this leave us? Well the company has no debt which is a big plus, and it is trading around 400,000 shares a day (makes it easier for me to get in and out). The volume also shows a sign of bottoming out since it has gotten lower since Friday. It's Enterprise value is 28.73 Million versus a market cap of 139.31 Million. The possible down side is that the company has a short % of 6.48% as of April 8th. This number has increased since March as well but what I am hoping is that whoever was shorting basically predicted the downfall since on April 8th the stock closed at $3.85; it is down 34% since then.

My goal is to take a 3,000 to 4,000 share position (basically my whole portfolio) early tomorrow at any price because I think that it will go on an upswing. My target price is $3 a share which is where the stock opened up at on Friday morning when it gapped down on the news ($3 was the high of that day). This is most likely going to be a resistance point technically speaking for the stock (just a guess, I can't really back that with any facts to be honest). If the stock moves to $3 a share this would give me about a 20% move which would be a big gain for the 10k portfolio. The time span I am looking for on this is by the end of next week (or 8 trading days). To protect my downside I am going to watch the stock as closely as I can to hopefully catch any downsings early on. I may put a stop loss on the position but as long as I am at my computer I should be (should be, haha) for the most part ok. The reason I will not immediately put a stop loss is that I do not want to risk getting taken out of my position on a 2 minutes downswing (remember the AXYX close call?). So with that being said, this is the play and we will see what happens tomorrow. Have a great night,

AXYX closure and New Account Balance

I got out of the rest of my 2,900 AXYX shares today at $1.23 which was a great closure to a trade that started last Monday. I rode it for an 8.8% gain (on part of my original shares). This is a big accomplishment for 7 trading days as my other pick also churned out 12%+ last week in 4 days. My total cost to do the whole cycle through AXYX was about $55 (2 orders to get in and 3 seperate orders getting out). I am excited to put another win in the column and up my record to 2 wins and 1 loss.

After all costs my account balance went from $9,759.63 to $10,175.68 which is a $416.05 gain; the biggest on the 10k portfolio as of yet. The 10k Portfolio now stands with 1.76% growth compared to the S & P 500 which has a .003% (Since Day 1 which was April 25th). I am very content and pleased with the results as of thus far. Now though it is back to the drawing board to draw up the next trade which I should hopefully have ready for tomorrow. I will probably post late tonight what I have come up with. If you have any questions about the AXYX play, the trades that made it up, or anything else feel free to email me. I will definately be at my computer for a few hours tonight, haha. Enjoy this beautiful day,

To the future,

AXYX Update

Alright, so I get back today to find AXYX with a $1.24 high on the day sitting at a price around $1.22. I also found out that I had only 5,000 shares left because 3,000 had been sold out (rememeber the Limit order I placed) on Friday at $1.19 (the stock closed at $1.16 that day, I gotta steal at that price). So, not only was I happy that part of my position had been sold out at a great price, but I was also happy about my decision to make the order expire at the end of after-hours trading. At about 2:30 PM today I put in another Limit order at the high ($1.24) just to see if I could get lucky and get some shares sold out. Sure enough, though the stock closed at $1.22, I got 1,100 more sold at $1.24 in after hours (the best price in after hours ; ) ). Before I move on I want to re-cap that I sold out 3,000 shares at $1.19 on Friday banking a profit of about $120 and 1,100 shares today banking a profit of about $100 (excluding commissions); My position left is 2,900 shares.

What I am going to relay now is probably the most important part of this whole trade because selling is ALWAYS the hardest part. If you remember when I got into the stock originally I stated that my target price was $1.20. The play was to get a rise because of new investor interest due to the CFO speaking. Now, what I am trying to relay is that though AXYX is beyond my target price and is showing signs of upward potential strength we cannot forget the original goal. As tempting as it is to just sit with my position or even buy more to "get one more penny out of it" or "to watch it run" or whatever your mind tells you in my opinion is to always walk away. In the end my goals have been met and I have made my money, why should I put that at risk? For me to hold AXYX would mean that I would be setting a new target price and be going for a different play, did I do my research other possibilities? Did I look to see if any other stocks were in a better position for this kind of trade?

There is a story about a person who set a trap for chickens. He could only close it once and his original goal was to catch 3 chickens. So one came, then two, then three, then 4 and 5. He now had reached his goal and could have shut the door and walked away with more. But no, he decided to see if he could "get just one more" and waited. Not only did he get one more, but he got a 6th, then a 7th, 8th, all the way up to 12. Now he was way beyond his original goal and was loving the payout, after all he had 4 times as many as he originally planned for! So, instead of closing the door he decided that on the 13th chicken he would call it a day. But, one left, then 2, then 3. EMOTIONS GOT INVOLVED, "They will come back" "I'll wait for one more then get out" "I can't loose". Soon 4, 5 ,6,7 were gone and eventually he lost all of the chickens. What started as a simple accomplished goal became a miracle then a huge blunder. What is the moral of the story? YOU CAN NEVER GET EMOTIONS INVOLVED, STAY DISCIPLINED!! In the stock market it is SO EASY to say "I will wait for another 10 cent rise" or "It is going to go up more I know it". You cannot veer off your original path that you chose to stick to. In the case of AXYX, I would not be surprised if it runs to $1.30+; as well I will not be surprised if it runs down to $1.10. So, instead of playing the emotional game I am going to take my profits and walk away without any regrets. THIS IS A VERY IMPORTANT DISCIPLINE TO HAVE.

Tomorrow my goal is to get out of the rest of my 3,900 share position of AXYX and go back to the drawing board. I am going to walk away and find the next big play without my mind or emotions getting involved. Like I said earlier, selling is the hardest part; don't make the same mistakes I have for all it takes is one big one for you to loose it all. Look for a post or two tomorrow, have a great night, and always

To the future,

AXYX and the Weekend

AXYX is in my opinion under small accumulation. Every day this week it has taken a slow move upwards. The stock has recieved support at the higher teens and every day right before the close there is a small burst of buying. Right now as I watch it is hovering around the $1.18 $1.19 range. Since I am leaving for Chicago early this afternoon I decided to put a Limit order in at $1.19 for all of my 7,000 shares. What this means if you recall is that I am Asking for 7,000 shares to be sold at $1.19. So if the Ask reaches $1.19 the way I will get out is by people buying shares and the MMs giving them mine. For me to just click "sell" and sell my shares at $1.19 would mean the Bid price would have to be $1.19. Furthermore, with 7,000 shares it would be difficult to drop unless the stock is under a run. I made the order "GTC + Ext" which means the order is good till the close today and for the after hours. This allows my shares to actually be purchased in the after hours. I am guessing I will get part of my order if not all of it filled by the end of the day. If not, then my order expires and I then am still holding whatever shares I have left.

I will be coming back Monday late morning early afternoon. Upon my arrival I am hopefully going to come back to either my position sold or part of my position sold and a favorable price Monday to get out of the rest. The CFO presentation was Wednesday and by Monday any of the accumulation from the actual presentation would be in my opinion done. I am going to spend the rest of Monday afternoon and night just researching and rummaging around for the next play. Check for a post then otherwise have a great weekend and Happy Mother's Day to all of those Moms out there.

AXYX, GTI Update

Based on price alone since Friday it seems that GTI was actually the better call. From the close on Friday of $3.81 the stock has taken a short term run up to a close today of $4.26, a 12% move. Now, tomorrow is the day the company posts earnings (expected to be negative) so we will see if there are any adjustments to the price. If you remember when I was giving the play behind GTI, I stated that sometimes stocks will take runs regardless of the expected earnings. Well, GTI is as of now doing just that.

Though I do not own any GTI and have a 7,000 share position in AXYX, I am still happy. The stock closed today at $1.18 which puts me up about 2.5%, or $210 after costs. So, I am not upset because in the end making money is the ultimate goal, but we will see what happens tomorrow. I am also very excited to see both of my picks producing returns, and being a new strategy I was trying out, one stock with 12% in 4 days and another with 2.5% 4 days isn't anything bad. You can never look at a stock trade as, "I knew I should have boughten that other stock" just because you could have made more money. Any trade that puts money in your pocket is always a great trade, EOM.

Moving forward though, my goal with AXYX is to get out tomorrow or friday at a price over $1.20. Why a $1.20+ target price? Well, this would put my total account value back in the green and it would mean that I would sell out with gains of $350+. There was a small end-of-the-day push so hopefully this is some foreshadowing. We will see what happens tomorrow, but so far so good. Have a great night,

To the future,

The position is taken, but with a very close call

Alright, I did some good patient trading today and it ended up banking out. The chart you see below is of AXYX in 5 minute increments throughout the day. As you can see the stock hovered in the $1.14 - $1.16 range most of the day. I put limit orders in (read the original post below) and decided to be patient. If my shares hit they hit, if not, well then I react accordingly. I got in 5,000 shares at $1.15, then put another 2,000 in at $1.14 just to see if I could steal some more. Surprisingly, I got all of my shares in and in the end accumulated a 7,000 share position (see the 2nd picture for the two seperate orders broken down).

Why is this so beneficial that I played it slow and got in where I did? Well, let's look at the other way I could have played it. For the first 5,000 shares it was either buy them or try and get them off of someone selling. So, for me to buy them at the time would have gotten me in at $1.16 which first off is $50 more than where I got them at. I then would have boughten my 2,000 more later on at $1.15 (because the ask went down to this point) instead of waiting to get in at $1.14 which is another $20. Because I was patient and did not jump the gun, not only did I make an extra $70, but my cost per share is now lower, and I am already up $90 on my position instead of just $20 ($50 + $20 + $20 vs just $20) with the stock priced at the close of $1.16.

So the close call now came later on and this is the theme of the day. We all know that "insurance" (aka stop losses) can be great, but what if they are activitated when you don't want them to be? Remember the first stock I traded? Well, this is a same case scenario, almost. THIS IS VERY IMPORTANT, sometimes a stock will take an intra-day drive (can you see the quick fall in the picture below?) and if you place your stop order to close to the actual price you can loss alot of money. I will explain in more detail. After I got my 7,000 shares I put a market stop loss at $1.10 which means that if at any time the price hits $1.10 my shares will automatically get put on the market and sold as fast as possible. Well looking at the intra-day you can see that the price dipped down to $1.11, just a penny away from my market stop loss and within a few minutes was all the way back up to $1.15. The close call is this, if that price would have hit $1.10 then my 7,000 shares would have been sold immediately, putting me at a loss of over $350 (7,000 times $.05 + my order costs). This is why putting stop losses can actually be your worst enemy if placed incorrectly and must be thought out as well. I used $1.10 because it is the 52-week low price and a big support level, thinking back now I should have placed it at $1.09 which would get me out if that support level was broken. But, in the end, I lucked out and still have a great position. I have since cancelled my order and have decided to take the all-day shift of watching the stock tomorrow and the days following to sell out if need-be; I will judge on the fly.

Now that step 1 and 2 are complete (finding the play, then taking an actual position), I can breath a bit and wait to see what happens. Will the CFO speaking at the convention Wednesday really cause a price-spike? We do not know as of now but once the next few days unfold we will have our answer. Make sure to double-read and take the finer points of today's lesson, because every action you take for granted as non-important can actually cost you your wallet. Have a great night,


AXYX Intra-day chart in 5 minute increments. Notice the quick dip down to $1.11 back up to $1.15.

My Orders Today 

AXYX Limit Order

Alright, so I decided that with the given circumstances, AXYX was the best risk/reward play. But how do I get in at a good price? The stock really hasn't been trading much volume for the last while (probably around 150,000 a day) even though it's 50 day average volume is just over 1 million. So, what I did is I placed a Limit order this morning for 5,000 shares at the strike price of $1.15. What this means is if you recall a limit order is only hit if I get the price I want meaning unless someone is selling their shares for $1.15, I am not gonna get in. Now, at the moment there is about 18,000 shares at $1.15 as well and believe me, I am last in line to get my order processed. On the day the biggest order I have seen has been around 10,000 so I have some praying to do. If I get lucky I'll get in at $1.15 by the end of the day (I set my order to expire at the end of the day if it doesn't get processed). A $1.15 5,000 block price is in my mind a steal for the current circumstances and if you think about it compared to buying the same 5,000 shares at $1.16 (considering I can even get in at $1.16) I am actually getting an extra $50 (5,000 x $.01). So, I am gonna let me order sit, watch the stock, and see if we can get some sort of intra-day bearish trend. I will post up either at the end of the day or if I get in during the day to relay the news. Remember that the CFO is speaking on Wed at the convention so if there is a quick price spike it will come either tomorrow before the convention, Wednesday after he speaks, or Thursday. If nothing happens (which it may not) by getting in at $1.15 we should be able to get out without much downside (HOPEFULLY). Once we get in I am going to put a tight stop loss on the shares just to be safe (remember last trade?). Enjoy the afternoon,

To the future,