Author Topic: Dumb Day Trading Idea - Will Keep You Updated  (Read 2892 times)

A Fella from Stella

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Dumb Day Trading Idea - Will Keep You Updated
« on: July 30, 2019, 08:33:31 AM »
As noted in my Penny Pot Stock thread (thanks everyone for chiming in), I've been following these companies for about 5 years now, and have made some profitable trades. For some context, I'm better than a broken clock, which is right 2x a day, but worse than someone whose advice you should follow.

The Dumb Idea: There is a ridiculously worthless stock with the ticker USMJ. It ticks up and down at very tiny increments each day, and I imagine some people have BitCoin dreams of it being a big deal. I don't, but think it can be utilized for some trades.

I just bought 3,000,000 shares at $0.0005, and hope to flip them today for $0.0006. Perhaps I just threw $1,500 into an open pit.

Will let you know.

MustacheAndaHalf

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Re: Dumb Day Trading Idea - Will Keep You Updated
« Reply #1 on: July 30, 2019, 09:59:40 AM »
VTI (Vanguard Total Stock Market ETF) is currently trading at $153.63/share.  If you benchmark your stock picks, you'll see if you beat the market or not over time.  It's not exactly a fair comparison, since penny stocks are extremely high risk.

Isn't there a risk of this stock going nowhere, and then getting de-listed?  Then you're trapped waiting for a profit, only to find you can no longer buy and sell shares on the open market.

vand

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Re: Dumb Day Trading Idea - Will Keep You Updated
« Reply #2 on: July 30, 2019, 10:22:38 AM »
You are basically scalping the bid-ask spread.
As always the risk is that the market moves against your open position.

What is the price of a stock? There is actually no single price that you typically see quoted - you have a bid price and you have an ask price and never the twain shall meet. If you buy a stock you are buying at the current bidding price (the lowest price that a seller is currently willing to sell at) and if you sell then you are selling at the ask price (the highest price that a current buyer is willing to buy at).  Those ticks up and down on the chart that you see are just buys and sells on either side of the bid/ask.. the more illiquid a stock, the more pronounced it appears
« Last Edit: July 30, 2019, 10:44:42 AM by vand »

habanero

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Re: Dumb Day Trading Idea - Will Keep You Updated
« Reply #3 on: July 30, 2019, 11:24:23 AM »
Congratulations - you are effectively sort of a market maker in that stock as long as you are willing to buy on the bid price and sell on the offered side (provided you managed to buy some in the first place). It works until it doesn't. Assuming you never short the stock (i.e. sell shares you don't have) your risk is that it drops below the price you bought at. As you are either long or flat, the stock taking off can't hurt you. On the other hand, you are set to loose money in a scenario where the stock moves even lower in price.

Zamboni

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Re: Dumb Day Trading Idea - Will Keep You Updated
« Reply #4 on: July 30, 2019, 11:30:51 AM »
I clicked just because I enjoyed your title. Well done!

A Fella from Stella

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Re: Dumb Day Trading Idea - Will Keep You Updated
« Reply #5 on: July 30, 2019, 02:48:17 PM »
End of DAY 1

I am still the owner of 3,000,000 USMJ shares. Price is the same

Financial.Velociraptor

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Re: Dumb Day Trading Idea - Will Keep You Updated
« Reply #6 on: July 30, 2019, 06:01:48 PM »
Most brokers make it hard to do this kind of scalping.  Penny stocks usually don't qualify for flat commission pricing and often have exchange fees passed through.  0.0001 in "margin" might leave you with a trading loss.

vand

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Re: Dumb Day Trading Idea - Will Keep You Updated
« Reply #7 on: July 31, 2019, 02:56:09 AM »
Successful scalping is usually done putting opposing buy/sell orders in on either side of the bid/ask spread and then waiting for them to get matched.  You are aiming to take a 1-tick profit with a very high win/loss ratio because it will cost you at least 2 ticks each time it goes wrong.

If don't know if you're at all familiar with betting exchanges which offer a pure market on sports and other events, but it is exactly the same principle: https://www.youtube.com/watch?v=os05kv4LncA


Chris Pascale

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Re: Dumb Day Trading Idea - Will Keep You Updated
« Reply #8 on: July 31, 2019, 08:02:11 PM »
Very interesting gamble. Googling the price, it appears that day 2 is the same as day 1. Nothing lost/gained yet.

A Fella from Stella

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Re: Dumb Day Trading Idea - Will Keep You Updated
« Reply #9 on: August 01, 2019, 08:04:58 AM »
Very interesting gamble. Googling the price, it appears that day 2 is the same as day 1. Nothing lost/gained yet.

Yes. And it's flat for the morning thus far. We shall see if fortune ($300, specifically) falls upon me.

A Fella from Stella

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Re: Dumb Day Trading Idea - Will Keep You Updated
« Reply #10 on: August 01, 2019, 02:02:15 PM »
And so goes day 3. Nothing to report.

BicycleB

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Re: Dumb Day Trading Idea - Will Keep You Updated
« Reply #11 on: August 01, 2019, 02:22:03 PM »
You ARE keeping us updated!

vand

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Re: Dumb Day Trading Idea - Will Keep You Updated
« Reply #12 on: August 02, 2019, 12:32:15 AM »
I assume you bought them at the going offer price, so if you liquidate your position today then you'll be making a one-tick loss?

It could easily tick up, but could just as easily tick down. You're just sat there with a load of stock in a company you know absolutely nothing about hoping to catch some volatility.  Looking at the chart, it has lost 4 ticks since the start of this year. That's not a great trend to try to be batting against.

The idea of penny stocks is that you buy a few forget about them while they work on a cure for cancer. they're not for day traders.

soccerluvof4

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Re: Dumb Day Trading Idea - Will Keep You Updated
« Reply #13 on: August 02, 2019, 02:37:27 AM »
I did this for years with I believe the ticker was BQI . It was from 7 cents to 9 cents if I recall. Basically was just some land in Canada that was waiting to be sold for Fracking. It was alot of fun for a few years and I actually did pretty good on it and was fortunate that I got into other stuff before whatever happened to the stock did. If its money you dont care about then so be it otherwise you would be better off buying a basket of 5-8 stocks and you just need one to take off but even that now a days I wouldnt play that game.

A Fella from Stella

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Re: Dumb Day Trading Idea - Will Keep You Updated
« Reply #14 on: August 02, 2019, 11:39:30 AM »
I assume you bought them at the going offer price, so if you liquidate your position today then you'll be making a one-tick loss?

It could easily tick up, but could just as easily tick down. You're just sat there with a load of stock in a company you know absolutely nothing about hoping to catch some volatility.  Looking at the chart, it has lost 4 ticks since the start of this year. That's not a great trend to try to be batting against.

The idea of penny stocks is that you buy a few forget about them while they work on a cure for cancer. they're not for day traders.

It's worse than knowing nothing! I checked out their website, and was not impressed - with the site.

When I say "dumb" in the title, I am referring to my idiocy, not the actual idea, which is maybe "okay."

A Fella from Stella

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Re: Dumb Day Trading Idea - Will Keep You Updated
« Reply #15 on: August 02, 2019, 11:42:27 AM »
I did this for years with I believe the ticker was BQI . It was from 7 cents to 9 cents if I recall. Basically was just some land in Canada that was waiting to be sold for Fracking. It was alot of fun for a few years and I actually did pretty good on it and was fortunate that I got into other stuff before whatever happened to the stock did. If its money you dont care about then so be it otherwise you would be better off buying a basket of 5-8 stocks and you just need one to take off but even that now a days I wouldnt play that game.

Glad you made a few bucks. Personally, it may be for the best that if this $300 gain comes in, it wasn't in the first hour. Otherwise, I might have bought in again with $1800, then 2160, then.......

It would be sweet to take home an extra few grand doing this, but it's totally possible my $1500 buy made me someone else's sucker.

bacchi

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Re: Dumb Day Trading Idea - Will Keep You Updated
« Reply #16 on: August 02, 2019, 11:46:05 AM »
The idea of penny stocks is that you buy a few forget about them while they work on a cure for cancer. they're not for day traders.

This literally worked for a close friend of mine. He dabbled in biotech stocks for years and finally picked a winner to the tune of several million. Granted, he is (was!) a doctor so he could lose $10k here and there and not sweat it.

He was closing in on ER anyway; the gambling just accelerated it by a few years.

August26th

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Re: Dumb Day Trading Idea - Will Keep You Updated
« Reply #17 on: August 02, 2019, 03:18:18 PM »
I did the penny stock thing once for kicks..... spent about $250 on a ton of shares as I recall. It was for a “green” company so I was intrigued. Held it for several years (yes years, because why not?).... eventually got de-listed and I lost that money. Not a biggie for me, but definitely a failed experiment.

ChpBstrd

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Re: Dumb Day Trading Idea - Will Keep You Updated
« Reply #18 on: August 02, 2019, 09:59:07 PM »
I did the penny stock thing once for kicks..... spent about $250 on a ton of shares as I recall. It was for a “green” company so I was intrigued. Held it for several years (yes years, because why not?).... eventually got de-listed and I lost that money. Not a biggie for me, but definitely a failed experiment.

There's a cottage industry of people who start companies, get listed on the pink sheets, circulate a prospectus to sell shares, and then the insiders sell their shares and move on to the next "startup". There is just enough money to be taken from penny stock traders and programming errors that such a strategy can make founders and executives quite rich.

Chris Pascale

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Re: Dumb Day Trading Idea - Will Keep You Updated
« Reply #19 on: August 02, 2019, 10:56:53 PM »
I did the penny stock thing once for kicks..... spent about $250 on a ton of shares as I recall. It was for a “green” company so I was intrigued. Held it for several years (yes years, because why not?).... eventually got de-listed and I lost that money. Not a biggie for me, but definitely a failed experiment.

There's a cottage industry of people who start companies, get listed on the pink sheets, circulate a prospectus to sell shares, and then the insiders sell their shares and move on to the next "startup". There is just enough money to be taken from penny stock traders and programming errors that such a strategy can make founders and executives quite rich.

Some companies are referred to as nothing more than golden tickers. When I was at a green energy co that was incubated by a hedge fund on Madison Avenue, I remember thinking that the president of this green co (a former trader in the hedge fund) could run the company into the ground, get funding for another, and repeat the process about 10 times until its time to retire. The hedge fund can get investors and divert a small portion into "start-ups," meaning friends' businesses.

Now, that wasn't the case of that company. It's still in business today, 9 years later, but could have gone the churn-and-burn route with lessons learned carrying forth the team as they hope to get rich with public money, if listed.

A Fella from Stella

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Re: Dumb Day Trading Idea - Will Keep You Updated
« Reply #20 on: August 06, 2019, 07:40:12 AM »
Welp nothing to report and I'm taking a couple days off to hang out at home.

A Fella from Stella

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Re: Dumb Day Trading Idea - Will Keep You Updated
« Reply #21 on: August 13, 2019, 09:52:49 AM »
Welp, the stock for USMJ has teetered toward .0006 on a day or two since my buy, but today it's fluctuated between .0003 and .0004. I really thought I'd have turned this over a few times. Guess I'll just have to hope to clear it just the once if there's a way-up.

Blueberries

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Re: Dumb Day Trading Idea - Will Keep You Updated
« Reply #22 on: August 13, 2019, 10:16:46 AM »
Welp, the stock for USMJ has teetered toward .0006 on a day or two since my buy, but today it's fluctuated between .0003 and .0004. I really thought I'd have turned this over a few times. Guess I'll just have to hope to clear it just the once if there's a way-up.

Death knell.  It might go up, but it might not.  Why are you willing to risk the rest of your capital on hope?  Put in a limit order, take your loss, and consider it a cheap life lesson. 

A Fella from Stella

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Re: Dumb Day Trading Idea - Will Keep You Updated
« Reply #23 on: August 13, 2019, 10:22:18 AM »
Welp, the stock for USMJ has teetered toward .0006 on a day or two since my buy, but today it's fluctuated between .0003 and .0004. I really thought I'd have turned this over a few times. Guess I'll just have to hope to clear it just the once if there's a way-up.

Death knell.  It might go up, but it might not.  Why are you willing to risk the rest of your capital on hope?  Put in a limit order, take your loss, and consider it a cheap life lesson.

Looking up limit order........and this is why I'm glad I posted about my stupid idea.

Thank you.

To answer your Q, it's not a lot of money, but I am seeing that dividend-yielding, established, successful companies are more worthy.

Blueberries

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Re: Dumb Day Trading Idea - Will Keep You Updated
« Reply #24 on: August 13, 2019, 10:52:13 AM »
Welp, the stock for USMJ has teetered toward .0006 on a day or two since my buy, but today it's fluctuated between .0003 and .0004. I really thought I'd have turned this over a few times. Guess I'll just have to hope to clear it just the once if there's a way-up.

Death knell.  It might go up, but it might not.  Why are you willing to risk the rest of your capital on hope?  Put in a limit order, take your loss, and consider it a cheap life lesson.

Looking up limit order........and this is why I'm glad I posted about my stupid idea.

Thank you.

To answer your Q, it's not a lot of money, but I am seeing that dividend-yielding, established, successful companies are more worthy.

If it's not a lot of money, I'll give you my address and you can send it to me.  Of course I'm joking, but digital money has caused you to think you'd just waste $1500 on anything.  You wouldn't.  Why not buy 1500 $1 lottery tickets.  Preposterous, right?  But, that's exactly what you're doing buying a highly speculative penny stock.  I'm someone that believes you can beat the market investing in individual stocks if you put in the time, effort, work, etc., especially if you have a passion for it.  If that's you, read some books on how to trade stocks and hone your skills.  Don't expect to get rich on one trade and like any other discipline, it takes years to get good.  Don't throw your hard-earned money away in the hopes of getting rich quick.

Chris Pascale

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Re: Dumb Day Trading Idea - Will Keep You Updated
« Reply #25 on: August 13, 2019, 08:03:33 PM »
Welp, the stock for USMJ has teetered toward .0006 on a day or two since my buy, but today it's fluctuated between .0003 and .0004. I really thought I'd have turned this over a few times. Guess I'll just have to hope to clear it just the once if there's a way-up.

Death knell.  It might go up, but it might not.  Why are you willing to risk the rest of your capital on hope?  Put in a limit order, take your loss, and consider it a cheap life lesson.

Looking up limit order........and this is why I'm glad I posted about my stupid idea.

Thank you.

To answer your Q, it's not a lot of money, but I am seeing that dividend-yielding, established, successful companies are more worthy.

If it's not a lot of money, I'll give you my address and you can send it to me.  Of course I'm joking, but digital money has caused you to think you'd just waste $1500 on anything.  You wouldn't.  Why not buy 1500 $1 lottery tickets.  Preposterous, right?  But, that's exactly what you're doing buying a highly speculative penny stock.  I'm someone that believes you can beat the market investing in individual stocks if you put in the time, effort, work, etc., especially if you have a passion for it.  If that's you, read some books on how to trade stocks and hone your skills.  Don't expect to get rich on one trade and like any other discipline, it takes years to get good.  Don't throw your hard-earned money away in the hopes of getting rich quick.

Agreed, and there are many good sites out there, like Motley Fool, Wealthy Joe, etc.

I haven't made a fortune in stocks, but have made some good trades (short-term gains) based on things I've seen. For example, in 2017, when Amazon bought Whole Foods, Kroger grocery stores took a huge dump. I took a bigger look at Kroger, and personally didn't see that anything changed, especially in the immediate future. They were still an excellent employer and were still selling apples and bananas. So, when the stock fell off a small cliff, I picked it up a little too soon at $23, then had to hang out for a bit for the quarterly reports to come out. When they did in the fall, I turned a nice little profit.

Had I kept it, the stock would be about even at this moment, except that I'd have taken home reliable dividends every 3 months, and honestly, that would still be pretty good. Reliable income off of the stock of a great company that is of good service to communities around the country - it's certainly more than can be said for USMJ, which, sadly, isn't appearing to be much a business.

Not meaning this as a criticism. You seem to have criticized yourself enough already.

vand

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Re: Dumb Day Trading Idea - Will Keep You Updated
« Reply #26 on: August 14, 2019, 04:31:23 AM »
Don't forget to double down..

heh, just kiddin'

OK, there's obviously lessons to be learnt, and just about everyone pays their dues to the market at one time or another. There's a difference between knowing what you should do on an intellectual level because you have read or been told about it vs having actually put yourself through the experience and suffered the pain to know it deep in your bones. Not wishing to sound mean, but I hope it hurt a bit and you don't just shrug it off... because pain of loss is how you really learn.  I have learnt much more from my losses than I ever have from my profits.


A Fella from Stella

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Re: Dumb Day Trading Idea - Will Keep You Updated
« Reply #27 on: August 15, 2019, 09:28:35 AM »
Don't forget to double down..

heh, just kiddin'


Putting in for 7,000,0000,00000,000000000,000000 shares...purchased! And for only $9.12.

You're right. What's great about this community is that if it did/does work out, and the stock goes to $2.00, or something nutty, there'd be worry that I'll something dumb, like put a down payment on a yacht, but no jealousy that I got rich for a minute.