Small Things Part 1

This article is about small things that really couldn’t justify having their own article. If you have

been around OTCMethod for a little while you know that I don’t care for “Life Hacks” or “This

one trick”, so if you feel that you are reading an article about hacks or tricks you would be sorely

mistaken. You are still having fun right now though.

Buying and Selling

There are a couple things I have picked up with buying and selling that you may hear me talk

about but have never seen laid out perfectly so here they are.

1. Selling on strange numbers:

Part of your job as a trader is to find a way to outsmart your competition. A lot of new traders

make the mistake of treating the stock market like a video game or a computer that they expect

to do things at certain milestones or thresholds. You must always remember that you are

competing against other human beings, or computers programs that have been programmed by

human beings that have studied weak/amateur traders.

At the beginning of a large of sustained run there is usually a rush of people buying it right off

the bat and let’s say that number is .01. The majority of people buy .01 and chances are they all

want to sell half at .02, so they will set their orders at .02. A trader that thinks he/she is smart will

set their order for .0199 (gotem!), then another trader sets his/her order at .0198 and on and on.
I might set my order at .0187. This is still an 87% gain for me and I will have shares left over and

guarantee that I get out clean while other traders fight over a tick or two. Those key milestone

resistances like .01, .02 etc are very hard to break and while they may get tested sometimes

they are never re-tested depending on share structure, catalyst, etc.

Whether you are bidding or selling on the ask, logical round numbers are the best way to get

your order skipped by someone more savvy.

2. Broad Slap/Whack

As gross as this sounds, this is actually a very important skill for a trader looking to get entry on

an explosive catalyst or get out as soon as possible on a very negative catalyst.

A broad slap allows me to get into a stock that is running without accidentally hitting way too

high, lets look at a level 2:

I have set a limit buy for .119 which allows me to take anything from any of the orders on the

ask to fill my order. Chances are that I will get the .104 and .105 but I will also accept other

levels without accidentally hitting .13 or 8.00 on MAXM. If you think that doesn’t happen to

people, it happens ALL THE TIME. This is a broad slap. The same principle can be used in

reverse for escaping a nasty stock that just announced a reverse split or something.

DD
One of the things I haven’t written about for DD is the use of the “Wayback Machine” which is a

tool that allows me to determine if something is getting pumped on old website data. The

website is located at https://archive.org/web/ and is a place where much of the internet is

achived in an easy to search format. Let’s look at HXPN from this past week as an example of a

Wayback machine confirmation of a material change.

As of July 6, 2019 the website for Harris Exploration looks like this:

There are traders saying this is a big change and something is coming, but how can I confirm it

for myself?
I put the URL into the wayback machine and found two archived dates for it from last summer:
I can see that the website was very different last summer, then I can use the daily chart to

understand when it was first discovered:

Looks like mid June, or maybe April when the change happened, so at least we now know that

the change happened sometime relatively recently and this isn’t a pump on an old website.

This happens more often than you think so you need to make Wayback Machine a big part of

your DD when you are trading dark securities.

Fear Management

A lot of people have asked me about how I manage my fear in trading and what are some tips

for that moment when you are unable to pull the trigger and I choose a macro view of the world

whenever I think about why I am trading.

This graph represents the income growth of the people in North America at the highest and

lowest ends of the personal wealth spectrum. The grey line represents 1980 where the lowest

percentile earners were seeing a 3.5% growth in their wages year over year where the highest

percentile earners were seeing smaller income growth year over year. Contrast this with the

chart of 2014 where lower income earners are seeing negative wage growth year over year

while the highest income earners are seeing over 6% per year growth on average.
Here is data presented by the US Congressional Budget office on inflation adjusted salaries vs.

cost of living. We can see median income has actually gone down while the major cost of every

item has risen dramatically.

Couple this data with a workforce that is living and working longer, and the massive increase in

automation for many of our jobs we are living in a time where taking your success into your

hands is more important than ever.

In addition to these facts there is another thing to consider if you are fearful, you can’t get good

at something you don’t do. Many of us (including me) are “traders” that have actually been

bagholders for months or years prior to OTCMethod. It is tough to get good at trading if you

don’t trade so sitting on the sidelines and being afraid to make a trade is the best way to make

sure you never improve. The only way to get good at anything is by actually doing it, so what

are you waiting for? The only thing you have to fear is a workforce that values you less than

ever, and an employer class that will replace you with machines as soon as they get the

chance.

How’s that for fear management?