Here are some pointers for those daring (foolish?) enough to play the timed release gimmick plays, such as those by Stock Preacher, Beacon Equity, etc.
Typically, the play "fires" off near the open, with official release times at the market open. In the past, the picks were released by some of the spammers at 9:40 A.M. EST or even earlier in premarket! Once the scamsters found out these did not work as well for them as the market open, they have tended to all line up the releases right at the opening bell of the regular session.
1.) Using your browser, create SEVERAL windows, click and drag using your mouse to create 3-4 smaller square viewing areas, each window containing a different URL. You can save time this way if multiple promotion firms are having link pages with picks appearing at the same time period. This happens often.
2.) Try to anticipate the play before it happens. You see, if you subscribe (using a junk E-mail address) to the spammers who usually run these scams, you will receive the URL link page in your box the night or so before the release session. In those mails, they give hints about what type of play and sector area it will be.
Since these goons are not very imaginative, and they tend to run the same plays at similar times, the pick is often the same on the same day at the same time for all 3-4 of the promoters. Another reason it is the same is that the firm names are in bed with each other, or one is the parent company of the other, so they release the same (often word for word!) promotional mailings and stock picks at the same time.
I just predicted the play for Friday, June 4 that was used earlier in the week (BROE) based on the hints they all dropped! With time and practice, you can get quite good at figuring it out in advance, which allows you to get the order blanks ready in your brokerage, check out the liquidity, type of exchange, and charts of the plays, to see if you want to jump in or not. Without this, you have a speed deficit and must decide right then and there. You cannot take your time looking at the chart. You cannot pre-eliminate based on exchanges.
3.) If the release is at 9:30 A.M. EST as it usually is, remember to begin refreshing all the browser windows no less than 2-3 minutes AHEAD of that exact time. The appearance of the info can be ahead of the game, and sometimes it appears late! The bottom line is the early bird gets the worm on any long scalp strategy. You have to save as much time as possible on all play entry aspects to get the best fill odds.
4.) Be *very* leery of using market orders to try to scalp these plays long! No matter how fast you arrive and are ready to make an entry, the spreads on most of these plays can be such that you are immediately in the red upon entry by a significant degree, even with the best possible fill. Since the plays are often only good for a few cents of upside, you have to get the earliest and best possible fills with the least slippage possible to have any chance of winning, and the position usually has to be of reasonable size.
True, the temptation to get filled fast is there, hoping to get past the spread and the usual premium paid, but if you do not get a reasonable fill you will simply lose money long. For tips on this, see Reaper's excellent blog video post on the use of market orders:
http://www.reapertrades.com/2010/04/qa-when-to-use-market-orders-never/
Of course, play anticipation helps you determine which exchanges are "deal breakers" to participation for you personally. For example, you may not wish to enter any Pink Sheet selections. The typical spreads of these picks are often possible to anticipate if you know the candidates in advance.
At any rate, you CAN get filled without massive slippage, and in time to scalp these long if you are smart about it. If you insist on using a market order, at least use a specialized version (available at some brokers) that caps the slippage in a predefined amount basis. I think Interactive Brokers has such an option, etc. As far as exchanges go, sadly most of the picks will be Pinkies or OTC, with only the occasional AMEX or even NASDAQ stock. Reaper once made a killing on ALAN for example:
http://www.goodevalue.com/2009/05/how-i-stopped-the-alanco-alan-bull-raid/
Ideally, you want the bigger, more liquid exchange to seriously consider playing these risky degenerate games!
5.) Most importantly, remember the best plays on these setups are usually the inevitable profit taking or compensated share dumping short, not the long scalp. You can also often stay in the short for a longer period of time, making money on the way down! Friday saw BROE quickly peak out and fade all day. At the very least an entry upon green to red can be leisurely ridden down most of the day, usually.
Another bonus of shorting is that since it (the pick) is new information to most of the crowd, the share availability based upon competing traders is not so bad as on a Supernovae play like the recent JSDA, etc.
The trouble is if it is an very obscure Pinkie or OTC stock (and it often sadly is) you may find your broker lacks shares not due to everyone requesting borrows, but merely because they do not carry it or enough of it to make it worth your time.
The dump at any rate is quite easy to time, as the momentum fades typically within the first 15-20 minutes.
Please use all of the above tips if you wish to navigate the shark invested risky waters of timed release plays!
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2 comments:
BROE was annihilated on Friday after a gap up. It is far better for people to avoid trying to go long these pumps for a scalp and instead concentrate on the potential for short selling, especially now with the deteriorating p&d climate.
Yes, it was. I fully agree the short is *by far* the best play in most situations. Long gone are the good old days folks like us used to laugh at any sort of bounce scalp.
Some thrill seekers who think they arrived just early enough to scalp a meager table scrap insist upon going there, however, so if you are going gamble recklessly at least try to limit your exposure and hope for crumb or two.
I prefer to simply short.
As you instructively noted, the market climate as it worsens produces less decent penny stock action altogether.
Which in turn means fewer quality pumps and even gimmicks because the audience of fools is not as much there and far less money will tossed around to pay for higher rent district promotions that tend to yield dream play opportunities.
I do not assume another ALAN on either side of the bet is coming any time soon, by the way...
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