Luck is when preparation and opportunity meet.
And last Wednesday, my students had a chance to show how much they’ve learned…
One of them said…
The best panic maybe all year…
Another one said…
The easiest 12% I’ve made in a month.
The crazy thing about it is the average trader doesn’t even know how to spot these opportunities, let alone how to take advantage of them.
But since you’re reading this, I will let you in on this.
The only thing I ask you to do is to study this pattern…because there’s no doubt in my mind, we’ll see this pattern again.
Table of Contents
Boy Is It Choppy Out There
If you’ve been reading this blog then you know I’ve been calling for a sell-off.
No, I’m not bearish or anything like that.
But I do know that we can’t go straight up forever.
Healthy markets need pullbacks and corrections. And we’re starting to see that in the Nasdaq.
Some of the top stocks that lead this rally have sold off from highs. Stocks like AAPL, TSLA, META, and MSFT are trading well at their most recent highs.
That said, the price action in the market has been choppy.
And while I don’t trade the overall market or large caps for that matter, it’s important for me to know how everything is trading.
Why?
Because most stocks tend to follow the overall market.
Also, during sell-offs, I want to be quicker with my trades. That means I want to take profits faster, and of course, cut losses quickly.
The two best setups I’ve found working have been buying strong multi-day runners during sell-offs. And buying heavily shorted stocks during panic sell-offs.
And on Wednesday I called out a beautiful one in the ticker symbol TTOO.
Source: StocksToTrade
The stock was a big earnings winner that became a short squeeze.
It went from $0.28 to a high of $0.73 in a few short days.
But on Wednesday at the open, the stock opened up and started selling off HARD.
It went as low as $0.40!
A drop of more than 45% in just a couple of minutes.
Savvy students who have studied the panic dip buy saw it as an opportunity.
The stock quickly bounced off its lows, reaching nearly $0.60.
Source: StocksToTrade
The Psychology Behind The Strategy
Make no mistake about it, TTOO has run up a lot recently. And shorts are looking for an opportunity to crush the stock.
Many shorts will wait till there is weakness before they attack the stock.
However, they are getting over-aggressive.
And that over-aggression is trapping more shorts. Which is why we’re seeing more and more squeezes lately.
Savvy traders who pick up on this can take advantage of these panic sell-offs.
More Breaking News
- Baidu’s Strategic Moves: Exciting Times or Caution Ahead?
- ITUB’s Surging Performance: Time for Caution or Celebration?
- Lumentum’s Stock Surge: Breakthrough or Bubble?
Something I’ve been doing lately and showing my students how to do.
Taking The Next Step
Becoming a consistently profitable trader won’t happen overnight.
It requires commitment and perseverance.
I want to help you reach your maximum potential.
That’s why I’m inviting you to join one of my free live classes.
Discover what separates elite traders from the rest.
CLICK HERE IF YOU’RE READY TO TAKE THE NEXT STEP.
Leave a reply