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[trants]

I am not going to state this is the “best style,” that is subjective.

My stye has its benefits. There are probably faults but I have not found them yet. That could just be perspective. I lock up FREE stock. The free stock I hold for the very long haul. Especially ones that pay dividends. I prefer them.

But I trade nothing without doing the research first. If you are looking for a free ride and trade other peoples ideas, you should not be in stocks. Doing that will get you a few rides but in the end, you are standing at the end of the line broke. I have had a least 45 friends who got interested and started trading. I have no friends currently trading from even five years ago. Several who are relatively new to it though. Those who are gone have done typical trading and all lost money.

This is what I have found to be a SOLID LONG TERM TRADING PLAN.

I will be brief with this investment style description: To find the target stock, I bottom fish. I identify how it got to a 52 week low. I ensure it is temporary by finding out what will likely turn it around.

I must understand what got it there or I walk. I find what I think will move it up again and I determine the buy in price I want to pay. I decide on what date I need to be in by. Before that date I place the limit order for the amount I want to risk. It is a “good till canceled,” order.

I wait for my price to be met. Every time I have raised my buy price, my first bid would also have been made if I had waited. I will wait for days to get there now. Only if it is a pure runaway would I reconsider.

My raw strategy is to get a 100 to 400% increase and sell part to make all of what I keep FREE. An example of a recent trade. QTM. Rock solid company beaten silly by the declining stock market and industry declines. It will not fail. Certain to be back to $3.50 to $4.00 by Jul. 2010. So I bought 10,000 shares at a dime. (.10) 12/2/08 (Real value here!)
Once I got the stock, I rate the speed of the increase in the stock price. This one I knew was moving up and down in .15 swings. It shot up to over .30 in 1 week, by the 10th of December. I sold 4,000 shares @ .30 for a small profit of $180.00 and 6000 shares FREE.
The bulk of the free stocks I will hold for my “Wildest Dreams Level” to be met. What have I got to loose. I sold another 2000 shares on 2/6/09 at .60 for another $1,200.00 Profit.
My remaining 4000 shares cost less then $0, I have a (-.34 cents) a share in them. In each case I used the $1,200.00 to buy more stock from my watch list.

Yes I have a watch list. I can find plenty more stocks at or nearing my buy points than I have money for. I have identified at least 10 more I would like. I have already done the research on these. Then while waiting on my sell points on others I watch those waiting and see how they are moving.

I shed my urgency to buy on these stocks this way, waiting. "Urgency to buy, that will cost you....." Patients pays. Urgency is for your bladder.

There you have it. Book Free Stock. I will book the same stock more than once and add the shares to the holding when the opportunity arises.

I need a reason, volatility is a good reason. You get a feel for what is a great price and know when to buy more on a retraction. They do happen. Never sell the Free stock on draw backs, they are booked on another trading screen. Just buy more if the stock draws back and gives you another opportunity to gain more free stock by buying in again.
Some stocks you have to hold for months to get the bump up. Slow stocks you take a smaller gain and sell more. On a slow stock I will sometimes wait for a 25 to 40% increase and sell 75% and keep 25% “FREE.”

I did that on my newest MOT shares it went up 22% sold 80% of the stock and kept 50 shares for free.

You buy stock after stock after stock, with the same dollars, over and over again. Build a larger and larger portfolio of FREE stock, if you loose 100% on Every stock in the Free Portfolio, you have lost NOTHING but profit.

[DanB]

Hey Trants, Great write up, a simple and very effective way to 'safely' trade. Obviously people have different trading styles and handle risks in very different ways but being a new comer to the game and looking to pick up on sound advice this is first rate.

I've seen a few other of your posts including your colourful Bio and stock tips which help newbies see how the pros do it. That said, 1 question if I may, how do you identify a stock at a 52 weeks low, I know 'how' but do you use software to look at % lost over the last 52 weeks or do you keep to your sector... ie Technology?

Ta
DanB

[Germs]

Trants,
Thank you for your post. I have followed your and Sawry's advice. I have stocks going free now. Not too many shares, but still free. Additionally, because of my limited buying power, I like trading penny stocks. I follow your advices and check on your picks. Still have 50K of THMR. Please keep posting your tips. Thanks.
Germs

[Temujin]

Good Post Trants.. Some very sound advice there.. Well done and keep up the good work.

[AndyB]

Great advice. I've considered this myself before but it's nice to see it tried and tested. It requires a very long-term view plus patience. The markets are very quickly teaching me to be patient ;)

[trants]

LOL

The markets will teach you patients or the way out! This is true!! He He!

[trants]

Originally Posted by DanB . That said, 1 question if I may, how do you identify a stock at a 52 weeks low, I know 'how' but do you use software to look at % lost over the last 52 weeks or do you keep to your sector... ie Technology? Ta DanB

Well I use my Sock Screener in Scottrade, but you can typically use any screener and ask for "NEW 52 WEEK LOWS". And I normally ask for the one's that are "Within 15% of" 52 Week Lows. I will also ask for price limits If I get to many as has been happening this past year. Such as Stocks Under $1.00 or Stocks over $X.XX and less than $2.00 .

You can limit them to .10 or less if you want. But really do the homework on stocks that are under a dollar. YOU MUST KNOW WHY and you MUST KNOW WHEN on the near or sub penny.

[AndyB]

Originally Posted by trants LOL The markets will teach you patients or the way out! This is true!! He He!

Indeed! Fortunately I'm a quick learner!!

[ychamb]

Also, Dan if you chose to use this strategy, make sure you make a note of the price you bought it at, so you'll be able to calculate how many free shares vs commissions & price of stock. Sometimes you can forget . I know I have before

[DanB]

Thanks Trants.. I shall look at my providers services to see if they have something similar.

Thanks ychamb - I can see how easy it is to forget the basics with so much going on. I've already got that covered with Google and a spreadsheet which I keep track of all my moves.