Stock Market Experiment: ENER

I changed the parameters to allow for a 3% loss as soon as it reaches 5, instead of a 2% loss. This means that as soon as the stock reaches $5, it has to lose 3% of its total value for it to sell. Essentially, the least amount for which this stock will go for is 4.85. If it *doesn't* drop to $4.85 after reaching $5, the sell price will keep going up, trailing behind the actual bid price. What this does is automate the process to the point where all I have to do is make sure that the trigger is set and ready for usage.

This LOOKS like it's going to wrap up soon. Honestly, there's no real telling with the stock market, but I am going to assume that the position will be through, and the stock will be sold in the next three days if it follows the predicted pattern. That pleases me immensely, of course, to know that I was right on my first go 'round. That means that I've got a little bit of a buffer to play with for the second go round.

Speaking of which...


This is the stock that I have my eye on. I already have a small position in the stock, but the gains that it makes on a regular basis is nowhere near the gains needed to make it worthwhile in the system. With a larger capital base, of course, the percentage that I need goes downward. So, what I'm planning on doing is investing in a lot more shares of this one after the ENER position is done. The plan is to get into the game at .40, getting out at .44 for a 10% gain in two or three weeks.

The exciting part of this plan is that the two weeks might be JUST enough to have let the ENER go back down to its normal 'low' point level and give me the opportunity to pick it up once more. If you'll notice, the similarities between the two stocks is remarkable. I am very fond of picking stocks that have a sine wave pattern and a time factor of two weeks. The overall goal is to make 3% per month over the next 12 months (If you'll recall, the average rate on CDs and other investments are 3% APY. )

Stock Market Experiment: ENER

I was able to purchase the ENER stock for $4.56 per share instead of $4.60, meaning that I will receive an extra percent gain in the exit strategy. I have set a 2% trailing stop once the stock reaches $5. The trailing stop strategy allows me to take advantage of any gains over $5, yet preserves them in case the stock drops more than a dime. Having the account at TD Ameritrade instead of another online brokerage provides me that advantage.

Setting up the plan has always been the easy part for me. I can objectively look at the trends, find a pattern, and generally predict what will happen based on the pattern that I see. I look at the shape and make my determinations from there, judging whether it will be a stock which suits the overall strategy. The long term strategy will come later, as soon as I've developed a foundation with the short term strategy.

But, it's always been the easy part. The hard part is merely allowing the strategy to run its course. I've found that in all of my 'panic and sell' moments that I would have been a lot better off if I had just waited for the plan to run its course. This happened with SIRI (Sirius Communications). This happened with AAI (Airtran Airlines). It happened with F (Ford Motor Company).

Waiting is always the hardest part. It was the hardest part when I was playing for real the first time. It was the hardest part when I was playing for fun at Wall Street Survivor. It was hard when I did this the second time, and it's hard now. This time, though, I have my previous mistakes to guide me.

Stock Market Experiment: ENER

I learned a lot from Wade Cook's Wall Street Money Machine, Volume 1 where he espoused incremental gains through the use of options. This book talks about the idea that you can make small, steady gains through the prediction of the markets. It was something very pattern based, something very much up my alley.

The idea is that every stock has a certain percentage of fluctuation. Some stocks vary wildly during the day, some stocks jump around during the week or the month. It was also based on the idea that if there is no news, it will slip into a general pattern. Let's take a look at what this stock (ENER) says.



For someone who has my particular goal in mind, this is a great stock. There are regular sine waves that occur every two weeks or so, with the full cycle taking around a month. I look for volatility, because I am not after the long-term stock purchase. I only intend to make this last a couple of weeks. If you'll notice, the trend is going up just slightly each time, and it's well on the way to going back up once more.

Purchasing: 640 @ $4.60 = $2944
Exit Point: 640 @ $5.00 = $3200
Expected Gain: $256 (9.2% gain)
Overall Status: $0 0%