Trying Out a Trading Service for 2 Weeks

I got invited to this “boom” chat room for a 2 week trial.  I was kind of excited because I’ve always wanted to see what it’s like, especially given that the red hot twitter I follow on stocktwits keeps on mentioning it.

Well, I found out that the service is a fast paced real time day trading forum.  Whistles and bells on real time posts of chats and buy/sell alerts.  Lots of people post their trades in real time. The choice of stocks traded invariably are mo-mo stocks under $10, many are “penny stocks” under $2.   On some stocks where it’s thinly traded, the service could almost make a market of its own and run the prices — effectively pump and dump.  The moment a buy alert was issued, the price simply run straight up.   So in many ways, fellow subscribers are my adversaries.  If they get in before me, they’d have bid up my buy price, and vice versa.  Extremely cut throat.

The owner of each trade is almost guaranteed a green entry on every trade, at least immediately upon entry.  In the guideline it is advised to take partial profit upon the initial pop.   So the owner of the trade gets partial profit off the bat, and then if the momentum really gets going, he can really make some nice returns.   For the rest of the sheeple, it can be a different story.  Slippage on the buy and slippage on the sale are a given, so profits are greatly reduced and stop losses are greatly amplified.  For this reason, to minimize the slippage, I need to be ready at all time; and when a trade is entered, I need to scramble and enter the trades as quickly as I can.  This is especially stressful if the spread is large and if the price has already started running.

For me, in addition to being a part of the disadvantaged sheeple, with the jinx that continues to follow me, and a few order entry errors to boot, I’m actually ($241) in red so far after 1 week and 1 day, not counting the red WEST position which I still have open positions.

Now some example jinx at work.  The ultra thinly traded WEST was posted as buy alert by the master.  I entered a market order.  Moments later, the master cancelled the alert, stating that the stock went without him and his buy order didn’t get filled.   I entered a limit order to sell at the current ask price, but to date, it has never been filled.  Today it’s now 18% in red and counting!

CDTI, the buy alert was issued twice yesterday by the master, and both got stopped out.  Now the stop orders for penny stocks are generally set quite a distance away to prevent getting shaken out, so getting stopped out means large loss, percentage-wise.  Getting stopped out twice was very bad trading.  To add insult to injury, the next day (this morning) the stock gapped up over 13% and was as high as 22% intraday.   I traded around a bit after the gap up to ease some pain.

An example of how fast a trade may get, take a look at LEDS.  The buy alert was issued at 5.24.  Look at how fast the price popped!   I didn’t chase but entered some time later on a flag for a token trade, again to ease the pain.  Luckily it turned out to be a green trade.

A few more days to go, but while the service gets my adrenaline pumping for sure, I don’t think it’s for me.  I give the service credit where it’s due:  for $95/month, the master actually interact extensively with each individuals and provide some level of mentoring.  Nevertheless, in addition to being hazardous to my health due to ultra-high stress, so far the service has also proven to cut into my bottom line.  I plan to be extremely cut-throat for the remainder of my trail subscription and see if I can turn things around.

The broad market shot up big today,  with the S&P up over 1.66%.   Naturally, having SPXU and TZA as my core positions, my account suffered today, down some $1,000.

Portfolio Value: $133,300.

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