I am calling these 25 points “axioms” in that they are propositions that aren’t necessarily proved or demonstrated but rather are self-evident to those who trade/invest on the OTC. In other words, these truths really 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 basically ARE. An axiom appeals to no other authority for verification…it stands on its own as the truth. For that reason, with these axioms we are dealing far 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 due to the fact the following are extremely significant ideas that could keep you from losing your shirt and aid you to win nicely at playing the OTC market.
1. The Center Stage Axiom The longer an issue stays insidespotlight…the worse. There’s usually one or far more very good reasons as to WHY afirm is trading on the OTC…especially if it is a penny stockbusiness. There have been numerous times within the past couple years I thought I had found that “true gem” that was going to be an additional Yahoo. I believed in it hugetime. I bought into it major time! But after the initial run and a dead-cat bounce or two..<br>.things began surfacing that were entirely damaging to the demand for the stock.Basically put, the greater a stock climbs in the investing world, the a lot more its rear end shows…and OTC butts ain’t pretty. Are there the occasional rule breakers here? Yes (commonly they’re reverse merger plays).<br> But those stocks are few and far between and they typically uplistvery quickly to a higher exchange. As a general rule, the longer a company stays within the limelight, the a lot more enemies it will attract. Bashers. Shorters. Bidwhackers. Apathy. New shares from various and sundry places (specially DILUTION and restricted shares coming off restriction). It’s often a war to generate the PPS (read: Price Per Share) go up on any issue. Do not stay too lengthy at the war. Fight as lengthy as you’re advancing and retreat the moment you see the enemy reinforcements gathering. Or possibly better yet..<br>.retreatprior to you think you even heard the enemy reinforcements. Remember, it is not yourwork to make a stock PPS go up, it’s yourwork for making your portfolio grow. OTC valor is muchdifferent than armed forces valor.
2. The Carpe Diem Axiom Often take *some* profit when you’re sitting onsignificant 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 method to accumulate wealth playing OTC issues is to often exit too soon. Furthermore, it leaves one feeling pretty dern excellent when he left some on the table for the following guy and was not the chucklehead that singlehandedly killed the run. If it does make you feelfine that you were the chucklehead that killed the run, shame on you.Generally remember…you don’t know thesubsequent time getting pressure willallow you to leak out of shares without injuring a stock and/or your portfolio! Seize the day. Seize the opportunity strong purchasing pressure offers.
3. The Itchy Trigger-Finger Axiom A personconstantly has shares to market to ruin a run. Read itonce again: An individualGenerally has shares to market to ruin a operate. Make this statement your personal computer desktop and/or screensaver. Say it to yourself ten times whenever youstart your trading day. Paint it on the ceiling above your bed so it’s the very first thing you see inside the morning. Please understand that another person owns a whole lot of whatever stock you’re jazzed about at much lower average than you — and typically times they own it for NUTHIN’ (i.e. compensated promoters, penny stocks, debtors, relatives of CEO, etc.). Also, should youbelieve that You’re the ONE which is holding all of theshares that could potentially ruin a run…believe once more. Only God knows where all of the shares are or will be coming from…mainly because who knows what kind of shorts will attach themselves to your play and sell you nothing but VAPOR.
4. The Domino Effect Axiom Almost everybody that losesfunds playing the OTC looks to point a finger somewhere. They wantsomebody or some entity to blame for their loss. Forget that the CEO sold 100M shares into the open market, they’d rather lash out at the well-liked poster that promoted, endorsed, and otherwise “pumped” the stock. Here’s what folks like that mustrealize..<br>.there is a domino effect ofpeople getting screwed. Here’s an illustration: the CEO legitimately plans NOT to sell shares but some emergency comes up..<br>.and believe me…”emergencies”pretty much constantly come up for these guys! Selling shares is the easiest way for him to increase the dollars and “After all,” the CEO justifies to himself, “the reason I went public from the firstlocation was to boost funds.” Thetrouble here is that the CEO failed to tell his promoters and/or closest investors about his should increase funds and that group of individuals is living under the assumption that the share structure is stable (i.e the supply will remain a similar).<br> So the CEO got screwed by somebody and had to pay up. He screws the promoters and his closest investors and they had to pay up. Now the promoters and close investors will most likely screw one more batch of investors. Scenarios like this have happenedfar more times than I can count! When something goes wrong and you are holding many thousand dollars worth of stock, you are not going to be seeking to inform the planet about things that will negatively affect the stock’s PPS! You are searching formethods to bring in purchasing pressure, not decrease it! Folks love pumpers/promoters when they’re helping the stock they’re in go up. Folks hate those identical pumpers/promoters when their stock is going down. Heroes and zeroes in the microcap earth are one and the same..<br>.it just depends on the day. Remember this though..<br>.if the guy at the top decides to take advantage of people…he most certainly will succeed. What you should know is your place in the food chain. And friends, if you are a rookie to the OTCglobe…you’re a bottom feeder that gets caught eating the crap of all the other fish in the ocean when the “Domino Impact Axiom” kicks into high gear.
5. The Vapor Shares Axiom In the event you see a poster battling the idea of shorting OTC issues with determination and vigil, sit up and pay attention…that poster is either a shorthimself or working on behalf in the shorts. Men and women and/or groups with the appropriate connections can and dobrief OTC problems…many times they briefstock into oblivion with the full approval and consent in the leadership from the firm. Contrary to common belief, many OTC CEOs don’t give a flying fig newton what their stock price does…what they care about is getting their hands on YOUR Cash. There is alot of dollarsto become created when a stock goes up. There is even much more dollars to beproduced when a stock goes down should you were selling vapor all the way down to .0001 and cover there. Microocap hedge funds exist. Microcap hedge funds manipulate stocks and steal the dollars of goodindividuals. Unless you’re a microcap hedge fund yourself, you are able to almost never win a battle against a powerful microcap hedgie that’s shorting the snot out of your beloved stock. Remember, this is an “axiom” that stands on its own. I will not seek to prove the validity of this point to you. You must simply either accept it or reject it.
6. The Glass-Half-Empty Axiom Bashers on message boards are a very real force to contend with and it’s not a coincidence that I’ve put this axiom after the “Vapor Shares Axiom.” It really is easier to obtain a individual to sell a stock than it’s to buy a stock…and they know this extremely well. If your stock’s message board becomes infested with bashers…be careful! Unless you believe thecorporation has some incredible news that may possibly force these guys to cover or unless you know of the group with mega-bank which is going to push the stock and perhaps force a cover…be cautious when playing with shorty.Numerous of these bashers will try and convince you that they’re there out of the kindness of their heart to try and rescue other investors from the perils of a diluting CEO or worse. Nope. Their motives are to bring the PPS down down down. Bashers, within the end, are almostalways right eventually because they’re bashing OTC issues. They know axioms like “The Center Stage Axiom” too!!!
7. The Supply IS Demand Axiom I’ve seen numerous runsmerely simply because a stock has a low sharestructure. A low supply creates demand. Know the share structure. On plays in which the TA is gagged, strategy to exit within hours of entering and play the momentum only unless you’ve STRONG and SOLID reason to believe the stock will go up. Call transfer agents. Learn what authorized shares, outstanding shares, and float mean. The share framework is the primarything I look for when making a new investment…it should be the primary factor youappear for too. If a corporation is not willing to become transparent in this area, it is possible to bet there’s a hundred other areas they’re not willing to be transparent about. I’ve and continue to invest in plays where the transfer agents are gagged (unable to report to you what the current share structure is) but Ido not plan to stay invested for long.
8. The Don’t Click The Mouse Yet Axiom Never invest in a stock at the high of day after aconsiderable run (good rule of thumb here may be 70-80%). Wait for a pullback. And while you’re waiting, do some due diligence.Examine the company’s filings on pinksheets.com or otcbb.com. Read a few of their PRs.Examine the history of the leadership there. Call the transfer agent (T/A) and ask for the share structure. And on stocks that are pulling back, acquire at the bid. Remember that it takes both bid buyers and ask buyers to make a stock PPS go up.
9. The Morning Patience Axiom The initial hour in themarket is “amateur hour.” With most first-hours on hot issues, it’ll either be extreme bid whackage which will cause some panic selling that will produce some excellentbuying opportunities later in the morning OR it will be extreme ask slappagethat will lead to a pullback around lunchtime. I hardly ever purchase throughout theprimary hour from the trading day, and I’d venture to say 80-90% in the time that decision has paid off. I’d rather watch a few missed opportunities than be stuck in a bunch of “apparent” ones.
10. The Bruised Knee Axiom There are toonumerous enemies against an OTC issue’s PPS going up to NEVER lose a battle. Know how to take a defeat. You lost. YOU made a mistake. Evaluate what went wrong. Evaluate why YOU lostdollars. It is okay to lose incomeoccasionally but it’s not okay to be just as dumb after as you were prior to!Imagine, imagine,Consider! Don’t make the error again. Get smarter. Listen, school ishigh-priced…tuition rates are high! In case you desire to make money trading the OTC you had better plan to spend the initial year in school.
11. The Show-Me-The-Money Axiom I once asked a poster that was complaining about getting lied to on a message board: “Are you stupid in any other areas?” Seriously folks, everyone on a stock message board has an agenda…such as ME. Such as YOU. Look at how generally your posts are seasoned with fiction and/or things that you just simply Don’t KNOW TO BE Certain. Consider that you just have most likely served up a poo-poo platter covered thickly with powdered sugar. Trusting stock message boards for correct due diligence is like trusting the National Enquirer for precise UFO sightings.
12. The I’m-Rubber-And-You’re-Glue Axiom Develop thick skin in the event you plan to post on stock message boards much. ‘Nuff said.
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