Happy New Year! As we start off into the new year, let’s think about strategies when playing HSX. (I’ll discuss movies later.)

The most common question for new traders to ponder is “What strategies should I use to trade?”

There are several types of traders.

• The day traders – who trade hourly because of their easy access to the net-The day traders need to use short term strategies obviously. This includes riding the waves and maxipulation.

• The evening traders – those who trade when they get back home and play the game when they have time.-The evening traders can use the “it goes up, it goes down” strategy
• The long term traders – those who just buy long term stocks and check HSX occasionally.-The long term traders actually ride on the likelihood of a stock doing well at the box office as well as focusing on Arbitrage stocks.

So lets go over each of these strategies.

Riding the Waves

-Riding the up wave–

This strategy usually focuses on the early morning traders. You need to be up in the morning when trading starts (4pst) You need to see what’s going up. You should buy into the stocks that are starting to rise. This usually results in at least a 1/2 point up to a 3 point gain for a majority of stocks that you buy. You need to watch this strategy though, because if you trade too late (basically after 12), you may fall prey to profit takers who will take the money and run. However, you yourself have to watch this strategy for it involves selling at what is the perceived peak. Use the graphs at hsbr.net to help you out.

–Riding the rebound–

This is a midafteroon strategy. Here is when you have to pay attention to a few stocks. Look at the market movers and see which stocks have dropped dramatically (2 or more points), and should reasonably do better in the next few days. Buy 100 shares of that stock and watch your portfolio. As soon as it goes up a quarter point, buy in to max out on the stock and watch your profit go up. This is a difficult wave to ride because it can be very choppy, but it can also be very profitable.

MAXipulation

Maxipulation is the simple use of looking at journal articles and picking up the stocks recommended there. Journals are rotated every day at 4pst, so you have to be up really early to make sure you pick up the stocks at an early hour. Journal articles aren’t just the only ones to watch though. Many stocks feature in the front columns in HSX (“the movies” “the fans” “the stars”) should also be picked up.

It goes up, It goes down

Watching the normal cycles of stocks are important. Seeing what goes up and down each day lets you see what the normal boundaries are for a stock. What’s important here is to realize that stocks can go down dramatically 2 days in a row, and suddenly shoot up the following days. Examples of this phenomenon are  STAR2 and STAR3. They show a distinct pattern of ups and down that evening traders can easily use to track when to buy and sell. Try this out with ENDOF (this is dated jan 5th. ENDOF has dropped over the last 2 days)

Likelihood to succeed

The most likely to succeed stock usually has you researching stocks ahead of time and figuring out which ones are probably going to be good or which ones aren’t going to be good. Thus you buy a stock when it’s low and hold it until it’s release. This usually involves buying the stock a month to two prior to it’s release.

To do this, you should have a list of stocks that you keep in front of you, and look for the deals. Take the price of what you believe the movie will open at, multiply it by 2.9, and you’ll get an approximate number of where the stock should be at. If it’s a lot lower, then buy it. If not, then don’t as the daily rate of return for the stock will be negligible. Don’t hesitate to buy any stock up to a year into the future.

Arbitrage

This is one of the most overused, misunderstood terms in the HSX market, so I’ll take a minute to explain this. Arbitrage is when a movie is being traded lower than it’s current  box office gross. This is important as people think that arbitrage means a good deal

Working arbitrage is hard, but sometimes really good movies that are in release drop below their Box office total. This is when you buy in and wait for it to go up a few points till it reaches it’s current box office total. Then you have the option of selling and buying into other stocks or simply wait until the stock delists.

addendum to Arbitrage

Misunderstanding of this term is usually used in cases where the movie is a good deal. Movies may sometimes do outstandingly well in the box office both on weekends and weekdays, bringing in amazing amounts of money to their gross daily. This is where people look at stocks that are extremely good deals and buy them up because although they may be high priced stocks, the box office will continue to bring in so much money that the high priced stock will rise even higher.

When this happens, it usually occurs because the movie is good and the word of mouth is good as well. This is called legs. A movie has legs when it does consistently well week after week, with little drop-off in their box office weekend grosses every week.

This phenomenon occurs most frequently during the winter and summer, when people are free, have money to burn, and a decent crop of movies are showing at the theatres.

Obiah the Writer