“The elements of good trading are: (1) cutting losses, (2) cutting losses, and (3) cutting losses. If you can follow these three rules, you may have a chance.” Ed Seykota
Oh, how I wish I had instilled this kind of discipline in me when I first started to trade back in 2011. Many a small loss turned into a big loss, wiping out my profits. Doh!
And that is why for any new Traders out there or unprofitable Traders, make sure you cut your bloody losses early. Do it religiously, no questions asked. Don’t be stubborn or egotistical, be disciplined.
As an example of how so very true the above is, take Anglo African Oil & Gas (TICKER: AAOG). After all the original IPO hype in 2017 where the share price spiked to 33.5p, it has been nothing short of a nightmare since. Problem after problem saw its share price drop all the way down to 6p. before they eventually had some good news with their DR Congo drilling campaign, hit oil and the share price spiked to 19p.
It has subsequently seen more problems, including this week’s announcement of yet further delays and financing issues. The share price tanked to an all-time low of 0.65p. It finished the week at 0.675p, a drop of 94% for the year. What a complete and utter shambles.
No wonder the Chairman legged it back in September, he knew what was coming, and is now laughing all the way to the bank having rinsed shareholders with his large salary and poor performance. Classic AIM and a classic example of how you should cut your losses early when a micro-cap doesn’t perform the way you want it to. I hope 2020 delivers a miracle for shareholders and the company sorts its mess out. Good luck!
As expected, with it being General Election week, it’s been a topsy turvy week across the junior market. The FTSE AIM All-Share took shoeing earlier in the week dropping down to 895 with investors being jittery about the General Election result. However, they clearly liked the result as it sprung back up on Friday, closing out at 917.71.
Hopefully next week, with the Election uncertainty out of the way, and it looks highly likely now that BREXIT will get sorted by the end of January, investor confidence will return and the markets will see more upturn in the coming weeks and months.
That said, it was still a good week for many micro caps, with a number of chances for Traders to make big profits.
Zibao Metals (TICKER: ZBO) soared 440% from a low of 0.20p to a high of 1.08p, Oracle Power (TICKER: ORCP) flew up 296% from a low of 0.423p to a high of 1.675p, Richland (TICKER: RLD) shot up 245% from a low of 0.132 to a high of 0.455p, G3 Exploration (TICKER: G3E) rose 227% from a low of 12.10p to a high of 39.60p, and Karelian Diamond Resources (TICKER: KDR) climbed 110% from a low of 1.76p to a high of 3.70p.
Five good opportunities for you to pay for Christmas, well, if you celebrate it. Well done to everybody trading these plays and being profitable.
In a bit
Author: Tosh Lines
I am a full-time trader who focuses on micro-caps, a freelance writer, and when I am not staring at the screens I am most likely climbing 3 mountains in 1 day for charity
Tosh Lines has not been paid to produce this article by the company or companies mentioned above. A donation has instead been made on his behalf to charity.
This article is for educational purposes only. Information contained within this article does not constitute any form of advice or recommendation and is not intended to be relied upon by readers for investment decision-making purposes.
All information is provided on an as-is basis. Where we allow Bloggers to publish articles on our platform please note these are not our opinions or views and we have no affiliation with the companies mentioned