I recently got this email from one of my students:
I feel you gave me the secret decoder ring this week. I saw the pattern, I didn’t trade it, but I am finally seeing the tip of the iceberg and it is glorious. Loved your comment in PennyStocking Framework Deux: “… Are you good at Tetris is more of a concern for me.” hahaha!
Please continue being “cruel to be kind.”
What is the secret decoder ring Len is talking about?
Well, it’s this pattern that played out again and again and again this week.
Download the key points of this post as PDF.
In fact, I have over 650 video lessons on this one pattern here because it’s my single favorite pattern in recent years that has helped made my top students and I seven figures, just a few thousand dollars at a time.**
Seven figures, a few thousand dollars at a time? What does that even mean?
Well, take a look at my two trades this past week on this one pattern …
I nailed the intraday bottom on CVSI both times, sold too quickly both times, but still made roughly $10,000 between the two trades, leaving roughly $30,000 on the table had I taken the whole bounce instead of just a fraction of it.**
So, that’s lesson #1: You don’t need to take the whole move, or even a majority of the move, to profit nicely on morning dip buys.
Lesson #2 is from my Trading Challenge student, Len, who actually missed the play but still witnessed it and learned from it … that’s a HUGE step in the right direction, as these morning panics happen again and again and again.
So lesson #3 is this: It’s not a question of “if,” it’s a question of “when” the next one will be — and how well or poorly prepared will you be when it does happen?
As I’ve said on far too many webinars (remember, my Trading Challenge students receive 2–4 live trading and Q&A webinars each week from me and several of my top students), 99% of my students are unprepared for the next great play …
So while everyone whines about a lack of plays during slow markets, instead they should be grateful because a slow market gives them time to catch up, as this game has been going on for decades, even if most students are just learning about it in the past few months or years.
Lesson #4: You cannot over-prepare enough. But FAR too many traders are unprepared, whether they don’t know the pattern, aren’t ready for it with the right broker (see my favorite brokers here), don’t know the proper position size to take, don’t realize how quickly the bounces happen, etc.
So it’s not a coincidence that if you follow me here on Twitter or here on Instagram, my central theme every single day is to “study hard” with “no days off,” as preparation is the key to increasing your odds of success on future plays.
Lesson #5: Yes, a few thousand dollars at a time multiplied by thousands of trades DOES add up to millions of dollars over time, especially if you follow rule #1 and cut losses quickly on the times you are wrong.
And remember here that NO pattern works 100% of the time, so you will be wrong sometimes. And it can happen on any trade, so don’t EVER get too cocky, bet too big, or refuse to cut losses quickly due to your own ego or stubbornness.
Lesson #6: Patience pays off. If you try to trade random patterns every day — like far too many traders do — you will get random results. You’ll also get a ton of unnecessary work, become frustrated that “trading is so hard,” and you’ll probably end up losing like most traders do.
So, why not listen to someone with 20 years of trading experience and now 10+ years of teaching experience?
Lesson #7 is, sadly, due of all the many fakes in my industry: There’s still a lot of hate and doubt when it comes to listening to my instructions
I have a small squad of moron haters who don’t realize that it’s in my best interest to create the most successful students possible, as that’s what brings me the most joy and fulfillment.
It’s also best for my fast-growing educational business, as it’s good to be real in an industry full of fakes and frauds who teach flawed — and ultimately, dangerous — techniques to newbies who don’t even realize the consequences yet since they’re just starting out.
Lesson #8: I will repeat the same lessons over and over and over again.
Why? Because this isn’t rocket science. The same patterns repeat. If you study enough of my now 5,600+ video lessons, you’ll see that even the same penny stocks are often in play — so the sooner you learn these lessons, the sooner you’ll be ready to start potentially profiting from the patterns, and eventually won’t need me anymore
And if you’re like some of my top Trading Challenge students, you’ll get annoyed how often I repeat myself and probably dislike me (which is fine because I’m not here to be liked; I want to teach you the basics and be your “training wheels,” then you’re free to discard me).
After a while, lot of people feel guilty that they don’t like listening to me repeat myself over and over again. But what they don’t understand is that I WANT THAT FOR YOU. Because once you feel that way, that means I’ve done my job teaching you to be self-sufficient and independent — like my top students.
Lesson #9: Once you do get it, you’ll laugh at others when they hate on penny stocks.
I don’t want you to try to change their mind, I’m very grateful for all the misguided hate, as it keeps competition away and it allows these simple patterns to work time and again. So it’s easier just to laugh at those who don’t believe, and keep building your account a few thousand dollars at a time … just like my top students and I show every few days/weeks when a perfect pattern like this comes along.
Lesson #10: It’s not enough just to know key support and resistance levels — you must learn to understand the patterns and the “why” of what creates them.
That’s why I encourage you not just to watch my 650+ video lessons on dip buying, but also ALL 5,600+ video lessons, like one of my Trading Challenge students, Mark Croock, did three times — and he’s also responsible for tagging and categorizing them all here**