Vegas 2014 Presentation

Tim Grittani

@kroyrunner89

www.tradetheticker.blogspot.com

My Story

• Began trading May 2011

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• 6 months of struggles

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• Graduated and started trading full-time start of 2012

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• Over $2.25 mil profits since

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• MANY losses/lessons along the way
• www.tradetheticker.blogspot.com for details

Keys to Success

Most asked question: “What’s the reason for your success?”

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1. Have the right broker(s)

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• Focus only on liquid, volatile stocks

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• Identify and FOCUS on your niche

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• Don’t believe the hype! Trade charts and price action ONLY

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• Cut losses INTELLIGENTLY (not necessarily quickly)

Have the Right Broker(s)

• “Right” broker depends on YOU
• You have to make choices when choosing
• Do you want to focus on buying or shorting?
• Would you prefer lower commissions or better executions?
• Do you want better locates, or cheaper fees?
• The three I like:
• Centerpoint Securities
• Best locates BY FAR
• Speedtrader
• For longing OTC stocks
• Many OTC routes
• Suretrader
• Solely for avoiding PDT rule
• Not a good broker for OTC executions
• Not currently with them (since I’m above $25k no need)
• More info on my blog

Focus on Liquid/Volatile Stocks

• The more trades/volume, the easier it is to enter/exit

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• Easier to take sizeable positions

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• Volatility helps grow small accounts!

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• Does not require “perfect trade” to profit

Find and FOCUS on Your Niche

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• Trade only what YOU are successful and comfortable with
• Pick your favorite 2-3 setups
• Ignore EVERYTHING else
• Once consistent profits, THEN consider branching out

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• My early niche buying new promos and promo breakouts
• Dug me out of early $1300 hole
• Expanded to bounce plays and shorting next

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• May 2014 I transitioned to Nasdaqs
• Picked my niche: Shorting momentum runners
• IGNORED buy opportunities, stuck to my plan/niche
• Despite missed upside, still SIGNIFICANT profits
• Next step - perhaps learning to buy too!

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• Bottom line:
• If you focus on and master just a couple setups, the sky's the limit
• IT IS OKAY TO MISS OTHER PLAYS

Seriously, STAY FOCUSED

Tempted to follow guru alerts on the side?

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• In my opinion - VERY damaging to beginners
• Think you’ll make extra money on the side??
• Unlikely! Near impossible to match entries/exits

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• You’re not learning how to trade, you’re learning how to follow
• Would you have bought by yourself?
• Do you know when to exit?
• What was your entry compared to guru’s?

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• Instead, WATCH how guru trades and LEARN from it
• Identify their setups you like
• Learn how to execute by yourself
• Add to your trading arsenal down the road

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Ignore the Hype, Trade the Chart!

Why do I ignore the hype, news, and fundamentals surrounding a stock?

• Don’t want to get “attached” to my position
• This goes for longs AND shorts
• Bias leads to ignoring what chart is telling you
• Ignoring chart leads to stubborn losses

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• Money moves stocks short term, not fundamentals
• OTC pumps WORTHLESS, yet can still run?
• Stock had blowout earnings, yet is dropping?
• Whoever has most $ or shares controls how stock moves
• Charts/technicals best way to play off of manipulation

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• I do not trade companies, I trade chart patterns.

Ignore the Hype: OTC Stocks

• These are NOT investments
• Odds massively stacked against you long-term

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• Small, unstable, manipulated companies
• Even if no “obvious” pump, don’t trust them

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• What I look for:
• Volume/liquidity
• Volatility
• Familiar chart pattern

The Marijuana Craze

The Marijuana Craze

The Marijuana Craze

The Marijuana Craze

Marijuana Craze Takeaways

• No obvious pump, yet classic charts
• Whether mailers or not, ALWAYS someone manipulating

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• OTC companies are NOT investments!!!!
• Might as well play the lotto

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• There will be another “Hot” sector eventually
• There IS upside opportunity before crash
• Keep daily chart “big picture” in mind
• Don’t be the sucker buying at the top
• Don’t be the sucker buying into the hype

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• Whatever next “Hot” sector is, remember these charts
• They will be VERY similar

Ignore the Hype: Listed Stocks

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• “But aren’t listed stocks more legitimate?”

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• “But the stock had good news?....”

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• You must decide! Do you want to be a TRADER or an INVESTOR??

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• If you want to be a TRADER
• Like OTC stocks, trade the chart! Ignore “legitimacy”
• Fundamentals will only matter LONG TERM
• Not a guessing game I want to play

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Ignore the Hype: Listed Stocks

Ignore the Hype: Listed Stocks

Ignore the Hype: Listed Stocks

Ignore the Hype: Listed Stocks

Ignore the Hype: Listed Stocks

Listed Stock Takeaways

• Do these charts look familiar??

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• If it looks like a pump, treat it like a pump!
• Take advantage of the pattern!

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• Once again, there IS upside opportunity!
• Don’t be the sucker buying high thinking “next big thing…”

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• Some of these very well could succeed long term
• Do you really want to hold and hope??
• Traders play familiar part of pattern, then MOVE ON

Other “Trade the Chart” Advice

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• Hide “Unrealized profit/loss” column on brokers!
• Helped me keep emotions in check
• Helped me trade off of chart, not off of unrealized $

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• Don’t set price targets!
• Example: “I cut all my losses at 3%”
• WRONG
• Example: “I’ll cut my loss if the $1 support level breaks down”
• CORRECT
• Every chart/situation unique
• Have a unique plan for each!
• Use the chart to determine your next move, not preconceived %s

Cut Losses INTELLIGENTLY

• “Quickly” isn’t always best
• Are you chasing a panic trying to sell?
• Are you covering your short into the top of a spike?

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• Unless I get executed right near a breakout/breakdown level, I like to WAIT
• Instead of chasing panic, I’ll wait for first bounce
• Might not get break-even, but can still minimize!

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• Fine line between “Smart” and “Stubborn”

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• Factors to consider:
• Emotional decision?
• What is the “big picture?”
• How large are you in?
• Risk of broker closing you?

Cut Losses INTELLIGENTLY

SBOTF Example

Shorted Weakness, low $2.20s avg

Cut Losses INTELLIGENTLY

SBOTF Example

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• Big picture: Overextended Daily chart
• Know OTC overextension tends to snap HARD

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• Small size, plenty of room to add

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• No buyin for three more days

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• My conclusion:
• No need to panic and cover for small loss during closing squeeze

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Cut Losses INTELLIGENTLY

ISNS Example

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Shorted early in low $9s

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Fast rebound towards $10

Cut Losses INTELLIGENTLY

ISNS Example

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• Big picture: Up from $5 to $9.90 in less than one hour of market time
• Don’t want to cover into strength

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• Small size, plenty of room to add
• No forced buyin risk, even if it goes nuts

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• My conclusion:
• Even if squeeze through $10, there WILL be a pullback to cover into
• Since small size, can always average up

What I Trade

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• OTC Stocks my “Bread and Butter”
• Original “niche” was buying breakouts and new promotions
• Blatant promotions and hype stocks my main focus
• Very few effective promoters left

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• Nasdaq momentum runners
• Focus on the most volatile & overextended stocks
• Really got serious about trading these May 2014
• “Adapt or perish”

Favorite OTC Setups

• New MAJOR promotion releases
• www.stocktips.com really only major promoter left
• www.invests.com “sister site” that publishes BS articles

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• Overextended daily charts
• Multiple green days in a row
• Large % run with no significant pullback

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• Bounce Plays

Major Promo Releases

• www.stocktips.com the only Day 1 promos I would play at this point

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• Picks typically announced Sunday evening

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• Look to buy alongside premarket “blocks” or right at open
• Sell into spike throughout morning

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Overextended OTC Shorts

• Start by looking at daily chart

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• Judge overextension one of two ways:
• How many straight “green” days?
• How much is it up from breakout level?

OTC Overextended Shorts

• After identification, how to play intraday?

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• Typically, I look for one of three things:
• Morning spike to short into
• The stock going g/r on the day
• If I belive g/r insignificant, I look for other trend breakdown

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• I almost always will try shorting into a morning spike if I get one

OTC Overextended Shorts

Morning spike example: ASTY

OTC Overextended Shorts

• When do I believe g/r is significant?
• If stock hasn’t gone g/r in days, I am much more aggressive
• If multiple g/r moves, but no collapse, I look for other trend breaks
• WSTI Example

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OTC Bounce Plays

• Level 2 is a MAJOR factor
• Get level 2 videos at www.tradetheticker.blogspot.com

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• I prefer stock to be very liquid if attempting bounce
• Low volume makes it very difficult to exit if mistimed

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Changing OTC Market

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• More halts than ever in 2014

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• Seemingly random which promos are targeted

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• EXTREME risk to be long any OTC overnight anymore

Transitioning to Nasdaqs

• Picked my niche: Shorting overextension

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• Created scanner criteria:
• Nasdaqs up 15%+ on day
• (10%+ was too many results)
• Total Trades > 3000
• Price < $10

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• Created spreadsheet to track next day performance
• Saved charts, looked for an edge
• Further categorized based on certain criteria

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• EXACT same approach I took when starting OTCs

Both stocks closed up 15%... but VERY different charts

Transitioning to Nasdaqs

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Spreadsheet Example:

Transitioning to Nasdaqs

Using Data to Find Opportunity:

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• I called stocks up 15%+ with ugly charts “Bad Day 1s”
• Looking for ugly daily candle
• Created a sheet for tracking JUST those
• How did they tend to perform day 2?

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Transitioning to Nasdaqs

Advanced “Bad Day 1” Stats:

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Possible Plays:

• Swing short after Day 1
• 96% go red at some point on Day 2
• 75% of these have Day 2 low of -6% or worse
• If gap up, short near open or into a spike
• 89% of gap ups go g/r Day 2
• Short at open, hold til close
• 75% of these fade -3% or more from open to close

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Not necessarily “must follow” rules, but stats can help guide decisions!

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Concluding Thoughts

Don’t just rely on gurus to get you there

• Be your own trader, do what works for YOU!
• May be different than what works for me - that’s 100% okay!

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• If you truly want to succeed, WORK FOR IT

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• Extra work WILL pay off

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• Self sufficiency builds self confidence
• Confidence leads to profits