As I mentioned in an earlier Penny Stock Prophet Review post, I found myself slightly ahead on his picks but was holding off on a conclusion until I had a chance to trade more picks. I still haven’t come to a final conclusion but am getting closer.
I looked back at some of my previous trades and noticed I was leaving profits on the table and missing small spikes the brought stocks into his sell range. So I figured I need a system to play his system. First I had to use the knowledge I picked up trading his stocks for the first three weeks or so. I noticed a few things about his picks:
- He picks stocks that had very small down sides.
- After a quick jump, many stocks seemed to trade sideways with quick spike ups, then back down.
- The fast price jump on some of his picks makes it difficult to get in below his buy price because he is getting many followers.
- The constant flow of new subscribers into his picks seems to prop up his stocks from becoming big losers, at worst losses have been limited to a few percent
Based on these observations, I decided to implement the following strategy for each of his picks:
- Put my buy order in before the market opens with a limit price a bit above the Penny Stock Prophet’s high buy range.
- As soon as I get the shares set up a Limit sell order at the low end of his sell price (I look at the chart to get an idea what the best price might be)
- Also set a stop loss about 20 percent below my by price.
- Watch the chart if possible and adjust #2 and #3 as needed – this adjustment is based on how the stock is trading.
This system has yielded profits on 4 of the penny stock prophets last 5 trades so for now it is working. During this same time, my older brother who ordered the Penny Stock Prophet picks was complaining he has yet to have a decent winner while I am making money. I found that he was out of most trades before the stock moved because he was setting very tight stop losses which took him out of the game with a bunch of small losses. Since the Prophet’s picks don’t seem to crash and burn, an extremely tight stop loss is not really necessary. My loose stop loss keeps me in the trade and will prevent disaster just in case a stock has some unexpected bad news.
One trade that just finished this week illustrates how I made money on a Penny Stock Prophet pick “INTT” that was given last Monday. Here is what the penny stock prophet said in his daily stock pick email-
Buy Point: $0.50 and under
Sell Point: $0.70 – $0.90
The formula flagged INTT this weekend for a buy point. INTT is a solid company, and at this price it’s a bargin. The tech and gov sectors are going into recovery and I expect to see INTT benefit from it. At it’s current price ($0.45 a share) I think it’s a steal.
In the chart below you can see how the stock started to spike during extended morning trading. By getting in my order in early I was able to get in at .55 ( I was surprised when I saw the price my trade executed at but then was happy I got that price. Before I had a chance to put in a limit sell at .73 and a stop loss at .45 The stock continued to spike up to .80 but came down almost instantly. I was a bit disappointed I fell asleep at the wheel but hoped for the best. Then as you can see the next day the stock had another quick spike up to .75 and my order executed at .73 for a one day 30% cent profit.
Now the stock is back trading flat around .60 and I am glad I am out. Also the penny stock prophet ended trade on this stock because it hit his sell target twice in two days.
Previous to my new strategy I would have missed the sell point and would be getting out with a tiny gain or loss. I will continue this strategy and report back in another Penny Stock Prophet Review in a week or two.
Also, you can check out more at the Penny Stock Prophet at his sales page
Filed Under: Penny Stock Prophet