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The Algorithm: Occam's Razor
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============================
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[𝗦𝗽𝗲𝗰𝘂𝗹𝗮𝘁𝗶𝗼𝗻](https://www.reddit.com/r/DDintoGME/search?q=flair_name%3A%22%F0%9D%97%A6%F0%9D%97%BD%F0%9D%97%B2%F0%9D%97%B0%F0%9D%98%82%F0%9D%97%B9%F0%9D%97%AE%F0%9D%98%81%F0%9D%97%B6%F0%9D%97%BC%F0%9D%97%BB%22&restrict_sr=1)
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Some Heartfelt Words
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Hello, apes. I am not a financial advisor. I am merely autistic, number-crunching engineer.
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I have been pushing this theory a swinging cycles for a few months now. When I first presented it, I was teased, mocked, and memed. I went through quite the hazing when I first posted this theory to reddit. I bring this up to specifically comment on my frustrations I have felt as a result of those that have not gone through that ostracized feeling but have yet benefitted from this idea. I have spent countless hours going through iterations of modeling and cross comparing models, data sets, sources, distributions, and so so much more.
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It is my view as a engineer with a strong stats background that TA has not been applicable to this specific ticker for a very long time. This is evident because of my formal training in orthodox statistical analysis and it very prevalent uses in this specific situation. I have not changed my original idea that an underlying, repetitive computation has been at play. I have evolved the ways I have modeled it but my greatest thesis of the existence of an algorithm has been constant.
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During the times when I was constantly teased, ridiculed, and so many other harsh responses the internet tends to give those that introduce a thought that greatly contradicts the overall community's belief, I did exactly what I have been advised to do. I was told that when everything went dark, to trust the DD. I trusted mine.
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To Understand is to Love
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All my DD, twitter spaces, statistical examples, et cetera have been worded with having those that are completely new to investing and data analysis in mind. I did this to encourage learning a subject I have a great love and passion for and to show how this stuff isn't really all that intimidating. Although something may look really, really hard and complicated, when you spend the time to observe it and understand it, you must realize that it really isn't at all.
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The most beautiful thing to me about this particular behavioral trend is its simplicity. There isn't a bunch of lines drawn influenced highly by observational bias and there isn't some sort of coding script to identify patterns. It literally is just looking at the data as a function of time which is one of the most fundamental examples of statistical modeling.
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This is poetry to me.
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God from the Machine
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The term "Deus Ex Machina" is defined as "a person or thing that appears or is introduced into a situation suddenly and unexpectedly and provides an artificial or contrived solution to an apparently insoluble difficulty." To me, I interpret that something so improbable that occurred in an all too perfect way could have only have happened by divine intervention. For me, this "algorithm" is my Deus Ex Machina. It is my black swan.
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Evolution of a Theory
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I purposefully have not posted a follow-up to one of my previous data analysis where I identified when the most significant dates along with the history of these swings because I received too many response show they bought options from my conclusions. I did not like how what I posted for others as purely a form of knowledge was used for financial gains. Since we are now so close to when I believe a very volatile (potentially MOASS inducing) day will happen, I am writing this up. I believe I have gone over my statistical analysis and mathematical process flow enough where the below graphs can easily be referenced to my previous DD.
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Without Any Further Ado
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[](https://preview.redd.it/f8h07sqww0m71.png?width=797&format=png&auto=webp&s=7806e53b90e63465e9bf5d3cd586045b7b241c79)
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Overlay of Previous to Current Cycles' Greatest Single Day Decrease
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[](https://preview.redd.it/0q643n51x0m71.png?width=788&format=png&auto=webp&s=cccdf5c48293089639479546120d417f151284d8)
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Overlay of Previous to Current Cycles' Greatest Single Day Increase
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[](https://preview.redd.it/mrjgaql8r1m71.png?width=1577&format=png&auto=webp&s=2b890b491a5ced30b84b49b10c55ed91c398d8bb)
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Greatest Overnight Change Theory
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Conclusion
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The repeating cycles are suggesting for a very volatile week.
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Thoughts
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I believe in you. It really is that simple. Data analysis, investing, stocks, or whatever isn't intimidating if you just take the time to observe and notice what its true nature is. Take good care of yourself because there is only one of you.
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[tweet](https://twitter.com/pwnwtfbbq/status/1435122799429840896?s=20)
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TL;DR
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Buckle up and get ready to see how well you can hold.
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Edit: For the Greatest Overnight Change Theory Graph, I made a typo of 5/24 and edited it to 5/25.
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178
Due-Diligence/2021-09-06-Buy-and-Hodl-the-Guide.md
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Due-Diligence/2021-09-06-Buy-and-Hodl-the-Guide.md
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Buy and Hodl: The Guide
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=======================
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| Author | Source |
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| :-------------: |:-------------:|
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| [u/gherkinit](https://www.reddit.com/user/gherkinit/) | [Reddit](https://www.reddit.com/r/Superstonk/comments/pj90o7/buy_and_hodl_the_guide/) |
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---
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[DD 👨🔬](https://www.reddit.com/r/Superstonk/search?q=flair_name%3A%22DD%20%F0%9F%91%A8%E2%80%8D%F0%9F%94%AC%22&restrict_sr=1)
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Greetings Apes!
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I'm not sure very many of you need this DD as I assume everyone at this point knows the thesis and has done their research. All of you have proven your mettle and diamond hands for months.
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[](https://preview.redd.it/blytmjxs3yl71.png?width=589&format=png&auto=webp&s=624cc21a88d65666362254bc3852391144d14768)
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I feel as someone that contributes in my own small way to this community that I should express my feelings toward some rumblings I have been hearing...
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As many of you have become aware there are cycles that effect the price of GME as more and more data becomes available to us with the passage of time, we are beginning to realize these.
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Retail should not attempt to trade these cycles for two reasons
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1. Selling shares reduces the potential effect of each run
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2. While we have some evidence of these cycles we have zero knowledge of their reliability. Many times throughout this we have been surprised by SHFs ability to manipulate breakouts and expected movement.
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But with the idea of swaps and other derivatives operating on cycles greed can take hold as long term profits become ignored in order to profit off short-term movement.
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This is not the way.
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MOASS only works because apes buy and hold
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We may not do a lot to effect price discovery in the short term honestly retails cash injections are not really noticeable on short time frames.
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But the effects of the strategy employed separately by hundreds of thousands of apes is what forces MMs and SHFs alike into terrible positions week after week. Every share bought and held regardless of cost basis is another cut added to the thousands that will eventually bleed them dry.
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I know some of these cycles seem obvious but the underlying causes are not yet fully understood. However, greed is a strong motivator, and a definitive cycle encourages trading regardless of ideologies.
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Remember that shares of GME represent a piece of a company that is carrying a short interest of 200+% and are part of a float that has over 300+% ownership. These shares carry potential energy unlike any stock that has traded before it, to trade these shares openly on the markets presents the short hedge funds a way out of what is currently an inescapable position.
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Since technical analysis is my thing let me show you in the best way's I can prove the buy & hold strategy is effective and guarantees MOASS.
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The Foundation
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Retails buy and holding present a difficult challenge to the SHFs and MMs alike by creating an almost impenetrable wall that they can't break though. That's right exponential floor guy was right...but maybe a little rigid in his analysis of what this meant.
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[](https://preview.redd.it/mbe21obojxl71.png?width=2454&format=png&auto=webp&s=0723dac584f19a06c71e96c63dc5e23231a0978a)
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An example of exponentially increasing price with every cycle
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This also gives a very good example of when the last time apes released shares into the market. Ever since the flash crash in march there has been little to no selling by retail.
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This theory is very simple selling shares reduces the potential growth of each cycle.
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Another visible effect of holding is that it reduces the amount of downward pressure that can be applied to the stock. So even though billions of dollars have been spent each time to drive the price down the lowest possible price keeps getting higher.
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[](https://preview.redd.it/twy38f0rrxl71.png?width=2460&format=png&auto=webp&s=0a1abebeb953b1be78e70c8daa1400956ed51502)
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Consistently Higher Lows
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Illiquidity
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Another effect of buy and hold is that over time the stock becomes very illiquid. The short hedge funds continue to pump synthetic shares into GME's float and apes continue to buy them. Not only effectively reducing the number of tradeable shares but also forcing short hedge funds to create more synthetics in order to cover previous FTDs.
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These compounding losses worsen over time as long as the floor (shown above) continues to rise the constant losses on the short positions compound exponentially.
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Additionally the constant hammering of the bid in order to suppress day-to-day price action increases the spread between bid/ask.
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Meaning, when SHFs finally have to cover their cycle of price suppression that covering raises the price much much faster. Making the next cycle even more difficult to suppress.
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[](https://preview.redd.it/r0nt761dvxl71.png?width=2460&format=png&auto=webp&s=de58f84186d92232b599821719b3ffeb814efe20)
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Fucked Hedge Funds on the 1D timescale
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A Little proof the shorts haven't covered
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Something new and old apes alike ask and probably the best theory to come out of that cesspool of paper hands over at meltdown.
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How do we know they didn't cover in January?
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Well maybe this helps explain it.
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[](https://preview.redd.it/80ru50sc2yl71.png?width=2459&format=png&auto=webp&s=bddbd66f36eb1b33131b2569e960db4b27aaaefc)
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Representation of the "original" GME short position on long-term OBV.
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Options
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I have not, nor will I ever encourage apes to participate in options on GME, unless they understand the risk involved. However, this is the only solution that I see that could possible satiate the inevitable greed of attempting to trade these cycles without sacrificing the floor apes have so diligently built. Nobody was ever hurt by a little education.
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So I think it's best to cover the advantages and disadvantages, best use case for GME, and some additional material. So apes can begin to educate themselves on this financial derivative.
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As always I consider better informed apes stronger apes.
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Why not options?
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Well for most people, especially inexperienced traders, the risk of options far outweighs the rewards. Losing money on these contracts essentially shovels hard earned money into the hands of Market Makers. Lack of understanding of options ultimately will lose people that do not understand them money.
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Why Options?
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Options present a contractual ownership in the underlying. They are a leveraged position meaning they represent control of 100 shares of the underlying per contract. As retail this can be beneficial as you can leverage a much larger number of shares than you can afford to buy at market with less capital exposure.
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Best use case:
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Options Yolo's of old are ineffective on GME. While we know the stock will go up it has been traditionally very difficult to predict exactly when. This is the primary reason so many apes have lost so much money on GME options and essentially why their use is frowned upon.
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The best use case for calls on GameStop are near or [in the money calls](https://www.investopedia.com/terms/i/inthemoney.asp) with far out [expirations](https://www.investopedia.com/terms/e/expirationdate.asp) (at least quarterly or greater).
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These give plenty of time for the price to move favorably, If the price moves against you you will suffer less in losses than you would if you owned the underlying.
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The most valuable part of a GME contract is without a doubt...
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*theta-* The term theta refers to the rate of decline in the value of an option due to the passage of time. It can also be referred to as the time decay of an option. This means an option loses value as time moves closer to its maturity, as long as everything is held constant. Theta is generally expressed as a negative number and can be thought of as the amount by which an option's value declines every day.
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The primary reason "cheaper" contracts are so affordable is that they have very little theta left and expire in a short time period. These options are cheaper because the risk present to the seller of the contract is lower.
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Meaning it is more likely to lose you money.
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Educational Sources for learning more:
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I highly suggest that anybody interested in options reads through these articles at a minimum and downloads a paper-trading platform with options like TDA's Think or Swim and practice options trading before ever considering using real capital on these risky investment vehicles.
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[Basic Guide to Options](https://www.investopedia.com/options-basics-tutorial-4583012)
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[Options Strategies for beginners](https://www.investopedia.com/articles/active-trading/040915/guide-option-trading-strategies-beginners.asp)
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[Options Greeks and what they mean](https://www.investopedia.com/trading/using-the-greeks-to-understand-options/)
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Conclusion
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While the short interest on GameStop basically guarantees a squeeze the parties involved in shorting it have Trillions in assets. They can and will do everything in their considerable power to drive the price down on GME and maneuver themselves into a position that is more equitable.
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Buy & Hold prevents this buy constantly increasing the losses they sustain on their short positions they are left in a spot where they cannot get out from under them.
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This is a siege not a battle, and they are starving.
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[](https://preview.redd.it/jg8k6vomwxl71.png?width=630&format=png&auto=webp&s=5fe14811cc2c0890a162e3e4f7bdd5b3db43c7ec)
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One final note:
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Ronald Wayne was one of the original founders of Apple, twelve days later, he sold his 10% share of the new company back to Jobs and Wozniak for US$800, and one year later accepted a final US$1,500 to forfeit any potential future claims against the newly incorporated Apple, totaling US$2,300.
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That stake would have been worth $264B as of market close Friday...
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Don't be a fucking Ronald...
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[](https://preview.redd.it/d8vnqq05byl71.png?width=407&format=png&auto=webp&s=a03b856d9df31d20fc873fd4aa553a97a8a9b29b)
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Paper-handed bitch
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Buy & Hodl
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If you want to see more information on this subject matter feel free to join me in the :
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If you missed my [Discussion on the GameStop thesis with Tradespotting check it out here](https://www.youtube.com/watch?v=cV5tyCAvdKk&list=PLLZAlefVs0gJCEi2OIKO1xdEnk3x1SMT5&index=3)
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Daily Live charting (always under my profile [u/gherkinit](https://www.reddit.com/u/gherkinit/)) from 8:45am - 4pm EDT on trading days
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Join me, on my [YouTube Live Stream](https://www.youtube.com/c/PickleFinancial) from 9am - 4pm EDT on trading days*
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Check out the [Discord](https://discord.gg/BGmjnrvHnw) for more stuff with fellow apes
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As always thanks for following along.
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🦍❤️
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- Gherkinit
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Disclaimer
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** Although my profession is day trading, I in no way endorse day-trading of GME not only does it present significant risk, it can delay the squeeze. If are one of the people that use this information to day trade this stock, I hope you sell at resistance then it turns around and gaps up to $500. :)*
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**My YouTube channel is "monetized" if that is something you are uncomfortable with, I understand, while I wouldn't say I profit greatly from the views, I do suggest you use ad-block when viewing it if you feel so compelled.* *My intention is simply benefit this community. For those that find value in and feel compelled to reward my work, I thank you. For those that do not I encourage you to enjoy the content. As always this information is intended to be free to everyone.*
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**This is not Financial advice. The ideas and opinions expressed here are for educational and entertainment purposes only.*
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* *No position is worth your life and debt can always be repaid. Please if you need help reach out this community is here for you. Also the NSPL Phone: 800-273-8255 Hours: Available 24 hours. Languages: English, Spanish.* [*Learn more*](https://suicidepreventionlifeline.org/)
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@ -23,6 +23,7 @@ This repository of GME-related content and relevant information serves two prima
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## Featured Posts and Important Information
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| Theme | Title | Author | Source |
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| :-------------: | :-------------: |:-------------:| :-------------:|
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| Due Diligence | T+69 | [u/gherkinit](https://www.reddit.com/user/gherkinit/) | [Reddit](https://www.reddit.com/r/Superstonk/comments/pk1g5d/t69/) |
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| News | Jungle Beat (09-03-2021) | [u/pinkcatsonacid](https://www.reddit.com/user/pinkcatsonacid/) | [Reddit](https://www.reddit.com/r/GMEJungle/comments/phdcvf/the_jungle_beat_week_of_09032021_remember_its_a_3/) |
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| Due Diligence | The Theory of Everything | [u/Criand](https://www.reddit.com/user/Criand/) | [Reddit](https://www.reddit.com/r/Superstonk/comments/pb22oj/the_puzzle_pieces_of_quarterly_movements_equity/) |
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| Due Diligence | Deep Dive into SWAPs | [u/broccaaa](https://www.reddit.com/user/broccaaa/) | [Reddit](https://github.com/verymeticulous/wikAPEdia/tree/main/01-Must-Read/Deep-Dive-into-SWAPs-by-broccaaa) |
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@ -123,4 +124,4 @@ You'll be able to find browse multiple compilations of due diligence (DD) like:
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## 🆘 How to Help 🆘
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Can't find content in wikAPEdia that you think should be archived? <a href="http://example.com/" target="_blank">Submit an issue on wikAPEdia </a> or directly message [me](https://www.reddit.com/user/Meticulous-) or [u/jsmar18](https://www.reddit.com/user/jsmar18/) on Reddit!
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### Buy, Hodl, ~~Vote~~ 💎🙌
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### Buy, Hodl, ~~Vote~~ Shop 💎🙌🛒
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Reference in New Issue
Block a user