Micro-cap Movers and Shakers From Tosh Lines, 6th December 2019

“I just wait until there is money lying in the corner, and all I have to do is go over there and pick it up.

By Tosh Lines

I do nothing in the meantime. Even people who lose money in the market say, “I just lost my money, now I have to do something to make it back.” No, you don’t. You should sit there until you find something.” Jim Rogers

A well-known trading proverb which highlights the need for patience. Overtrading is a common mistake made by many new Traders as they think they need to trade all day every day. The more experienced you become, the more you realise that actually you don’t even need to trade every day, even in a Bull market. Unless there is an obvious trade where the odds are stacked heavily in my favour, I simply won’t risk my hard-earned cash just for the sake of having something to do.

This week there were a couple of days where nothing tickled my fancy so I filled my day with other things I enjoy doing…a game of golf, visiting a bored stay-at-home mum for a cup of tea (wink). It beats being stuck staring at my screens when nothing is happening.

And if I missed a trade while I was out, so what, there will always be another trade. However, on days like Wednesday which saw the likes of Defenx (TICKER: DFX), Firestone Diamond (TICKER: FDI) and Richland (TICKER: RLD) all return treble digits, I sat glued to my screens, waiting patiently for the right entry/exit. Ok, I wasn’t in all of them, as that is often impossible when multiple plays are spiking simultaneously.

An experienced Trader friend of mine (@Furtim_Natura) has drummed into me over the years, the art of patience. Waiting for the best setups, not chasing a trade, picking your entry/exit prices before you enter a trade, and if you miss out then so what there will always be another opportunity.

He is relentlessly disciplined, and that is why he has been a successful profitable Trader for many years. And having studied many other top Traders over the years, patience is definitely one of the disciplines they too have instilled in their trading plan.

Being a Trader can be a lonely experience, staring at screens day after day by yourself can be mind-numbing. So that is why, for me, networking with fellow successful Traders is really important. Ok, it’s your money you are trading with, and the buck ultimately stops with you, but I have found that chatting to fellow Traders about certain micro caps, the state of the market, trading ideas, helps me to keep me sharp between the ears.

You’ll be surprised at how differently other Traders see certain trades, so it might just open your eyes to something you missed, which is never a bad thing.

Any new Trader out there feeling lost, put yourself out there more, ok there are a lot of dickheads on social media, but there are also a lot of nice decent people who are more than happy to help you out.

This week the FTSE Aim All Share took a breather from its recent surge. Four red days followed by a green day today saw it drop back to 908.39. Nothing wrong with having a breather after a long run of daily gains, maybe with the General Election next week a lot of folks are pulling their capital out to wait for the result? Maybe they are being patient and waiting for better setups? A result deemed bad by the market can, of course, be a Black Swan event, and those sat on a cash pile will be well placed to take advantage.

That said, it was still a cracking week for many micro caps, with lots of opportunities to make decent profits. I have highlighted below, nine such opportunities where you could have made a treble digit profit. Not bad eh?

Red Emperor Resources (TICKER: RMP) +139%
Red Emperor Resources (TICKER: RMP) is engaged in oil and gas exploration.
This week it announced it had signed an Option Agreement to acquire a 70% stake in a Perth Basin oil play.

Same pattern, different company. As highlighted last week with the TICKER: ROCK spike, TICKER: RMP followed the exact same pattern…gap-up/big spike on open (from 0.46p to 0.69p), early profit takers bailed dropping the price, support was found at 0.55p, before it exploded once again, peaking at 1.10p. A lovely spike of 139%.

The below 5-minute chart highlights once again how, if you are a newbie Trader and you are unsure of how to trade these big spikers, you can put the odds of success in your favour by waiting patiently for a support/resistance level, as opposed to just buying at whatever price and hoping for the best.

For example, using the resistance level of 0.69p which it first spiked too, and then the support level of 0.55p which it then bounced off, would’ve enabled you to calculate your risk/reward and determine your entry/exit prices. Such as, buying as close to the 0.55p support level as possible and selling had it repeatedly failed to break resistance at 0.69p or if it broke support and dropped below 0.55p.

Alternatively, you could’ve waited for it to break past resistance at 0.69p before buying. This is a really simple, yet disciplined way of trading these types of plays, and one that I find to be very successful.

Other micro caps which spiked big this week were G3 Exploration (TICKER: G3E) which soared 451% from a low of 3.9p to a high of 21.5p, Defenx (TICKER: DFX) which flew up 329% from a low of 0.70p to a high of 3p, Firestone Diamond (TICKER: FDI) which spiked 241% from a low of 0.41p to a high of 1.40p, Lightwaverf (TICKER: LWRF) which jumped 208% from a low of 1.85p to 5.70p, Chamberlin (TICKER: CMH) which rose 157% from a low of 21p to a high of 54p, Rockfire (TICKER: ROCK) which went up 141% from a low of 0.974p to a high of 2.348p, Richland (TICKER: RLD) which shot up 131% from a low of 0.086p to a high of 0.199p, and Alpha Growth (TICKER: ALGW) which increased 113% from a low of 1.45p to a high of 3.09p.

Well done to everybody trading these plays and making nice juicy profits.


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 

Twitter: @DCI_ToshLines 


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.


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