* * 25 AXIOM'S OF TRADING * * INTRO
Post# of 194
Posted On: 03/03/2012 7:36:42 PM
* * 25 AXIOM'S OF TRADING * *
INTRO
I am calling these 25 points "axioms" in that they are propositions that are not necessarily proved or demonstrated but rather are self-evident to those who trade/invest on the OTC. In other words, these truths should be taken for granted and serve as a starting point or a foundation when deducing or inferring other propositions about OTC investing. I will not seek to prove these axioms to you...they just simply ARE. An axiom appeals to no other authority for verification...it stands on its own as the truth. Therefore, with these axioms we are dealing more with beliefs and less with facts. But without fundamental beliefs, you will have nothing whereby to interpret the facts. So sit up and pay attention because the following are very important ideas that could keep you from losing your shirt and help you to win nicely at playing the OTC market.
1. The Center Stage Axiom
The longer an issue stays in the spotlight...the worse. There's always one or more good reasons as to WHY a company is trading on the OTC...especially if it is a sub-penny company. There have been many times in the past couple years I thought I had found that "true gem" that was going to be another Yahoo. I believed in it big time. I bought into it big time! But after the initial run and a dead-cat bounce or two...things began surfacing that were completely damaging to the demand for the stock. Simply put, the higher a stock climbs in the investing world, the more its rear end shows...and OTC butts ain't pretty. Are there the occasional rule breakers here? Yes (usually they are reverse merger plays). But those stocks are few and far between and they generally uplist very quickly to a higher exchange. As a general rule, the longer a company stays in the limelight, the more enemies it will attract. Bashers. Shorters. Bidwhackers. Apathy. New shares from various and sundry places (especially DILUTION and restricted shares coming off restriction). It's always a war to make the PPS (read: Price Per Share) go up on any issue. Don't stay too long at the war. Fight as long as you are advancing and retreat the moment you see the enemy reinforcements gathering. Or possibly better yet...retreat before you think you even heard the enemy reinforcements. Remember, it's not your job to make a stock PPS go up, it's your job to make your portfolio grow. OTC valor is much different than armed forces valor.
2. The Carpe Diem Axiom
Always take *some* profit when you're sitting on significant gains 50% or higher. Unless you are already independently wealthy and view OTC investing *only* as gambling for FUN (which isn't an altogether bad thing to view it as), take profit. The way to accumulate wealth playing OTC issues is to always exit too soon. Furthermore, it leaves one feeling pretty darn good when he left some on the table for the next guy and was not the chucklehead that single-handedly killed the run. If it does make you feel good that you were the chucklehead that killed the run, shame on you. Always remember...you do not know the next time buying pressure will allow you to leak out of shares without injuring a stock and/or your portfolio! Seize the day. Seize the opportunity strong buying pressure provides.
3. The Itchy Trigger-Finger Axiom
Someone always has shares to sell to ruin a run. Read it again: Someone ALWAYS has shares to sell to ruin a run. Make this statement your
INTRO
I am calling these 25 points "axioms" in that they are propositions that are not necessarily proved or demonstrated but rather are self-evident to those who trade/invest on the OTC. In other words, these truths should be taken for granted and serve as a starting point or a foundation when deducing or inferring other propositions about OTC investing. I will not seek to prove these axioms to you...they just simply ARE. An axiom appeals to no other authority for verification...it stands on its own as the truth. Therefore, with these axioms we are dealing more with beliefs and less with facts. But without fundamental beliefs, you will have nothing whereby to interpret the facts. So sit up and pay attention because the following are very important ideas that could keep you from losing your shirt and help you to win nicely at playing the OTC market.
1. The Center Stage Axiom
The longer an issue stays in the spotlight...the worse. There's always one or more good reasons as to WHY a company is trading on the OTC...especially if it is a sub-penny company. There have been many times in the past couple years I thought I had found that "true gem" that was going to be another Yahoo. I believed in it big time. I bought into it big time! But after the initial run and a dead-cat bounce or two...things began surfacing that were completely damaging to the demand for the stock. Simply put, the higher a stock climbs in the investing world, the more its rear end shows...and OTC butts ain't pretty. Are there the occasional rule breakers here? Yes (usually they are reverse merger plays). But those stocks are few and far between and they generally uplist very quickly to a higher exchange. As a general rule, the longer a company stays in the limelight, the more enemies it will attract. Bashers. Shorters. Bidwhackers. Apathy. New shares from various and sundry places (especially DILUTION and restricted shares coming off restriction). It's always a war to make the PPS (read: Price Per Share) go up on any issue. Don't stay too long at the war. Fight as long as you are advancing and retreat the moment you see the enemy reinforcements gathering. Or possibly better yet...retreat before you think you even heard the enemy reinforcements. Remember, it's not your job to make a stock PPS go up, it's your job to make your portfolio grow. OTC valor is much different than armed forces valor.
2. The Carpe Diem Axiom
Always take *some* profit when you're sitting on significant gains 50% or higher. Unless you are already independently wealthy and view OTC investing *only* as gambling for FUN (which isn't an altogether bad thing to view it as), take profit. The way to accumulate wealth playing OTC issues is to always exit too soon. Furthermore, it leaves one feeling pretty darn good when he left some on the table for the next guy and was not the chucklehead that single-handedly killed the run. If it does make you feel good that you were the chucklehead that killed the run, shame on you. Always remember...you do not know the next time buying pressure will allow you to leak out of shares without injuring a stock and/or your portfolio! Seize the day. Seize the opportunity strong buying pressure provides.
3. The Itchy Trigger-Finger Axiom
Someone always has shares to sell to ruin a run. Read it again: Someone ALWAYS has shares to sell to ruin a run. Make this statement your
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