At the end of October 2016, the shares of the Bakrie group (B7) whose prices were at the level of Rp. 50, aka gocap, rose rapidly again. This increase was preceded by an increase in BUMI's shares, one of which was due to rising coal prices. You can read more of his posts here: Studying Bandarmology: ENRG Stock Accumulation. The increase in BUMI's shares was also followed by increases in the shares of other Bakrie groups. Also read: Get to know fried food stocks in Indonesia.
Precisely on October 27, 2016, the stock market and fellow traders were shocked by the rise of Bakrie group stocks or what traders usually call zombie stocks. Bakrie stocks that were previously at the gocap level, including BUMI, BRMS, UNSP, ENRG and DEWA, suddenly climbed one by one.
It started with an increase in BUMI's shares, which were initially still in the 70's until they rose to 240! The increase in BUMI was also followed by an increase in its subsidiaries. Then followed by BRMS which increased from 50 to 100 per share. Then followed by an increase in DEWA shares which were hit by auto reject right, ENRG and finally UNSP. Also read: Meaning and Illustration of Auto Reject. The increase in DEWA, UNSP, and ENRG occurred very quickly in one day (27 October 2016).
Well, the rapid increase in Bakrie group's shares occurred in just a short time, less than 1 week. In fact, DEWA, UNSP and ENRG shares rose very fast in session I, then at the end of session II all of the Bakrie group's shares fell mercilessly.
Guess who can raise the stock price and lower it that fast?
"Market Maker" your answer
You are smart. This dealer always plays the price of illiquid stocks. Because the bookies have large funds, they like to "fry" stocks (the Bakrie group is an example of stocks that have been fried recently).
Yes, those are the characteristics of fried stock movements. It's not just the Bakrie group's stocks. However, if you look at stocks with a small market capitalization and generally having a nominal value below Rp1,000, the movements are not much different from these Bakrie stocks. It goes up so fast, but then it slides really fast. Read also: Get to know Stocks in Indonesia.
Since you are a critical reader, you ask: "Bung Heze is also trading Bakrie stock, isn't it?" Ask you
If your guess is that I am trading Bakrie shares, it means that your feeling is strong and correct. I also bought Bakrie shares even though I didn't buy in large lots (because the risk of fried stock is very high compared to the reward). One of the reasons I bought Bakrie's shares was because I wanted to study the behavior of dealers in the stock market. I bought 2 stocks, namely ENRG and UNSP.
In this post, I will explain how to trade in fried stocks.
[Note: I do not recommend you to continue trading in fried stocks, because the risk is very large. Many traders are stuck on gocap prices because the risk of fried stocks is not worth the reward.
For beginners, I do not recommend trading in fried stocks, because the potential risk is very large. In addition, the psychology of stock beginners is not well formed, so fried stocks can be very dangerous for beginners. Also read: Beginners, Avoid Fried Stocks. You can trade in fried stocks with the smallest possible lot or just to learn the behavior of the dealer.]
If you want to trade in fried stocks, there are several strategies / tips that you must apply so that you avoid the risk of getting stuck and so that you don't keep bad goods (stocks) for too long.
First. Do not be greedy. Implement a quick entry-exit strategy. I repeat once again: Apply a quick entry-exit strategy.
Take a look at the stock portfolio below. On 27 October 2016, I bought two shares of the Bakrie group, namely UNSP and ENRG.
Second. Dare to cut losses. If suddenly the stock price drops rapidly, you must dare to take action cut loss. Don't leave it. If you don't want and don't dare to take a cut loss, your stock can get stuck, and you can only hope when the dealer will fry your stock again so that it goes up. It is better to cut loss as early as possible and your losses can be suppressed, than not wanting to cut loss and all your capital is stuck.
Third. Never hold things too long. If you buy fried stock, as much as possible you should sell it on the same day, if the stock price has gone up fast. If you look at the UNSP and ENRG stocks that I bought, I bought that day and sold on the same day.
Why is that?
The disproportionate comparison of risk and reward in fried stocks makes traders always feel anxious if they have to "take home" fried stocks. If you keep fried stocks until the market closes, your psychology is very vulnerable to being disturbed. Want to eat thinking, want to sleep not calm, want other activities are also not good. You can indeed make big profits from fried stocks, but again the risk of fried stocks, especially your psychological risk, will be greater than the rewards you get.
It all comes back to you. Do you want to do activities quietly, or do you carry out activities with a burden on your mind because you store fried stocks whose direction of movement is not clear?
Fourth. Take profit targets. I advise traders NEVER set take profit targets for fried stocks that are too high. There have been many fellow traders whose shares have become stuck (even though previously it was profitable if they wanted to sell early).
The desire to continue to pursue profit is the nature of a trader's greed. Also read: Market Psychology: Fear And Greed (Part I). Market Psychology: Fear And Greed (Part II). Market Psychology: Fear And Greed (Part III).
