Friday, July 2nd, 2010

BP had a pre-market increase to 29.79/share, up an additional 1.77%, and the market opens in 20 minutes, hmmm.

A smart Trader/Chartist may place a hedge on his BP stocks. Meaning that he puts a sell-order in place that would automatically sell his shares of BP if the stock dropped. So if he set his hedge at 28.50 (what he paid on WED), and the stock drops to that, he'd break even (minus commissions). An alternative would be to place a limit-order which sells out at a price you specify that's above the current value. So if the pre-market was at 29.79/share, you could set your limit-price to somewhere around there like 29.89 before the market opened, and when it did you would sell out making an additional 1+% ($150) on your money, this time for 5 minutes effort.

Remember, long-term investors need not concern themselves with any of this stuff after they bought on WED. They can just kick their feet up and enjoy the show.

Let's see how BP does today...

UPDATE
So BP closed a -.14%.
Reason being if you look at the chart [ click the link on the previous post ] you will see a red volume bar meaning that institutions are dumping some shares. That's what they do out of greed. This is an indicator of a down-trend.
If you haven't done so by now, I'd set a stop-order preserving myself a 2.25% return, then kick up my feet.
If you get stopped out, then atleast you made more money in 4 days then you would of made in 6 months with a savings account.
If you don't get stopped out, you'll continue to "ride-the-wave" while being protected (hedged).

**********************************************************
DISCLOSURE
Stock performance can't be guaranteed.
Risk can be reduced through proper education and tool application.
The author of this post has posted for educational/information purposes only.
The author cannot be held liable for the readers investment performance, or lack there of.
***********************************************************

Saturday, July 3rd, 2010

Market Closed.

Sunday, July 4th, 2010

Market closed.
Showing an after-hours increase of .03%
May you have a blessed Independence Day!

Monday, July 5th, 2010

Market closed.

Tuesday, July 6th, 2010

Wow BP opened at an increase of 6+%, this was dubbed "Six percent in 60 seconds". That's a lot better than in 5 years on a CD right?

For those who set a limit-order, you walked out with a nice lil' profit.
For those who are long terming, you are sailing just fine at 9.89%.
For the ones who took my advice, you are protected at 2.25% but worth the now 9.89% (Better off than the two above).
9.89% puts you at $1,400 in 7 days and two hours of effort. That's enough for a mini-vacation or a PSD course...

STRATEGY
Here's what to do from here.
1. Cancel your 2.25% stop-loss;
2. Immediately create a new one set at 8%;
3. Smile ear-to-ear that you've just GUARANTEED yourself approximately $1,200.

Here's the best part, you are protected at 8%, but you are still riding the wave. One note to make is that on the current chart [ stockcharts.com/h-sc/ui?s=bp ] there was a drop in buying volume. This indicates that the heat is slowing down a bit on the institutional side. My guess though is that for a few more days individual investors will continue to jump on the bandwagon thus driving the price up more.

FINAL THOUGHT
This is all you have to do now...
As the stock continues to rise, you adjust your stop-loss to around 2% below your total return. If you set it too close by getting greedy you'll get stopped out and potentially miss out on even more profit. So, just keep employing this strategy until the stock tanks (which it will, eventually) and you'll be stopped out putting a fat chunk of profit into your account.
It truly is this simple, but these opportunities are rare. But if you could find one a month by looking for a good company with a battered stock price due to some drama, you can increase your income considerably.

V/R


**********************************************************
DISCLOSURE
Stock performance can't be guaranteed.
Risk can be reduced through proper education and tool application.
The author of this post has posted for educational/information purposes only.
The author cannot be held liable for the readers investment performance, or lack there of.
***********************************************************

CAPITAL GAINS
Someone may argue that you'll have to pay capital gains on the profits. Yes you will.
And although long-terming would pay less when they did sell, that stock could lose half it's value in one day and you'd be screwed.
I'd rather pay 34% on $1,200 profit that I made in 7 days versus hanging onto a stock for an entire year and watch it lose half it's value.

Don't get me wrong, I actually prefer long-terming as Warren Buffet does, but even he traded stocks when he saw an opportunity like this when he was younger. It's written in his book in the very last paragraph of the book.

V/R

UPDATE (Last One)

If you are still in BP from when I recommended it, even factoring in the last 4 days of Bear market losses, you'd be up 36%+, or $5,400! These opportunities are rare, but the ability to capitalize on them can greatly advance your journey to retirement!

Best Regards,

Novice investment may be quite confusing due to the millions of questions that will flood their minds.