Let's follow a trade I placed today in $CNGT.  I was alerted to this on 10/30 in the TimChallenge chat room as the volume increased over 10x in this pink sheet stock compared to the prior day.  On 10/29, news came out in the afternoon that the company was going to increase the number of authorized shares of common stock.  Although that is often a negative for current stock holders (as the value of their current shares often goes down after the issuance), investors responded well to this and on 10/30 we saw the price move from $0.0079 to $0.0247. 

Notice also that on 10/16 and 10/19 there was a big spike followed by a large crash on 10/20.  So this ticker definitely had some recent price movement and volume in its favor.

While watching this in the chat, and looking to see how I could take advantage of this while being tied up on other positions, I decided that I'd wait patiently at a dip point of $0.01 and resist the tempation to chase.  It was difficult, but I'm glad I maintained my patience and I finally was filled today for 200,000 shares.  

Here is what I said in the 10/30 chat:

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12:56 PM oldninja93>stevetrader:  Right, that's one thing I like to do, sit at a previous low the day before a jump to see if I get the best dip price. When it works, it works really well. But one has to be patient.

01:02 PM oldninja93: Put in a 100,000 share order in CNGT at $0.01 to see if I get a sharp dip.

03:21 PM oldninja93: Increased buy order for 200,000 shares at $0.01 (right by 200 SMA), looking for the end of day drop with plan to sell around $0.04 or higher within a week.

03:21 PM oldninja93: on CNGT

03:53 PM oldninja93: CNGT not fading enough for me so if my order isn't hit I'll keep watching next week. Don't want to buy over $0.01 as I'm aiming for a few thousand in profit. Will enter between $0.005 and $0.01. Patience is key.

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The next day, I had lowered my 200,000 order to $0.0075 and watched it for several days.  However, it only started dipping on 11/5 and, given how slow it was to dip, I moved my price up to $0.01 and sure enough, I started a position today.  By the end of the day, I was up $300 in unrealized gains.

For now, my plan is to exit around $0.04 with a stop loss around $0.005.  This sets me up for a potential loss of $1,000 and for a gain of $6,000, all for a position worth $2,000.  Whether or not there will be another increase in volume and price soon isn't clear, but by watching the Level 2 over the last several days, I've seen many tens of thousands of shares trading hands in this during the day so I'm not that concerned about liquidity at this point.  The more challenging part of this trade is to see if I can capitalize on the low price and action to make this a repeating sequence where I make several hundred or several thousand every few days.  For the account I'm using on this trade, I couldn't afford to go over $0.01.  But if I'm able to pull off several trades with only a few pennies change in price, then I might be able to grow this account more quickly.

Anyway, that's the plan.  Let's see how it pans out.