The baggy dead stock bounce strategy (works with crypto too)Hello,
let me present you: the baggy dead stock bounce strategy.
What is this strategy? Short version: Often, when a company has clearly died, has had months and months and years of downtrend, bad earnings, bad sales, bad everything one ofter the other, it does not reached the ground (where it belongs), but gets to the bagholder super strong hand area. And in that area, you might see some positive news. This gives a sliver of hope to iron hands bagholders, it is not rare to see stocks surge 200-500- here even 250,000% up!!! In a FEW DAYS!
The goods:
1- The price has kept going down, all the smart money has been out for a long time, there is no way any pro's are left, all that is left are dumb retail baggies that will never sell. Which makes it very unlikely that the price just falls 99% in 1 day or something like this.
2- Since the only people left is dumb money, well it's not even dumb money at that point, it's beyond... These baggies are NEVER going to sell. They will hold the bag to ZERO and beyond! So, since no one is interested in selling, any small demand can push the price up massively. Hundreds of percents.
3- Obviously, the massive returns for small accounts (even small accounts should risk a small % thought).
4- You do not have to worry about "wall street" competition for 2 reasons: First, the liquidity is often too small for them, Secondly and more importantly, there is no way anyone serious will be bullish on companies (or something else) like this, AND if a trader goes to a metting and tells people "Oh ye guys I am very bearish on this but I am going long today because reasons idk I just feel like it" and ends up taking a loss, this is a sackable offense and good luck finding another job (and maybe get a punch in the face too :p).
5- You do not have to worry about taking advantage of baggies false hopes and misery, these people are complete morons and you stepping in will not make them lose more money. Consider you increase their buy price by 20%. They are going then to buy a little higher and lose 100%. If you do not interfere they would buy lower and lose 100% of that... Literally makes 0 difference.
6- No risk of short squeeze like people shorting penny stocks...
7- You will have good laughs. I CRIED looking at this today and seeing the price remained at that 0.10$ level more than 10 years later, I swear I am not making this up.
Strong hands! They did not sell! Just a matter of time before this recovers now!
The bads:
1- Risky business of course... Be prepared to lose 100%. Obviously this is easilly countered by not going all in like a madman. You risk 100% of what you put in, but since it goes up hundreds of percent, your RR is high with a "stop loss" at 0.
2- You must make sure you do not overstay your welcome! So one must be good at knowing what people in this think (not much ;}), and understanding how momentum works.
3- Small. Very niche. Does not scale.
4- You would be a complete Vulture.
I do not trade this myself, I already watch plenty of markets and have 3 strategies (they all use the same tools and are similar but still that's alot), I can't add yet another...
So I do not know exactly how that will work, for those interested, play around with it see how you can do this. But from what I looked at and from what I heard, this works well. This is different from the penny stock educator scammers that go short after pumps.
Here for example on HMNY that made every one laugh last year:
Here, after dropping from 500$ to a few cents, Bitconnect did the same thing, as idiots bought, thinking "wow this is so cheap, what if it goes back to 500$ +1 million % returns". And what if your lottery tickets is a winner?
charts.cointrader.pro
AIG example:
A few more:
There should still be plenty of opportunities in crypto for the years to come because like it or not, crypto is full of idiots.
