If you haven’t heard…most people who try to trade lose money.
Now, there are several reasons why that is.
They don’t have the knowledge, skills, discipline, and patience to make it.
Notice I didn’t mention money.
So many folks think you need a lot of money to get started…but that’s not true.
Most of my millionaire students only started with a few thousand dollars and built it over time.
Today I’m going to share with you two specific strategies that I believe traders with a small account should learn.
Not only have they been making me money lately but my win rate with them has been high…and I’ve managed risk effectively.
Table of Contents
Finding Edge In The Market
One of the worst things I see newbie traders do is give themselves unrealistic expectations.
I tell all my students that their chances of making money in year one are not good.
You need to build up your knowledge bank and put in screen time.
Not to mention, discover which strategies work best for your personality.
And let’s not forget the emotional side of trading…which, like everything else…takes time to get comfortable with.
Ultimately, you want to get to a point where you understand how a setup works, why it works, and how to take advantage of it.
Then you must establish the discipline to focus on that setup and not get lured into trading stuff you don’t know.
Here’s the thing…
Some setups and patterns work better than others during different market conditions.
That’s why you have to constantly review your trades and stuff that’s working.
That said, here’s where I’m finding edge in the market.
Buying Strong Stocks: Multi-Day and Multi-Week Runners
Yesterday AAOI climbed by more than 8%…
However, the move wasn’t just a one-off…this stock has been steadily climbing since June. In fact, I remember trading this in the $5s.
Another recent multi-day runner has been the ticker symbol GNS.
This stock has gone from $0.50 to a high of $1.57 yesterday.
So how am I playing these multi-day runners?
I’m buying them on weakness…usually near or around the open.
Another thing I like to do is look at the big picture.
When you’re day trading, you might look at minute-bar or 5-minute bar charts…which is fine.
But I like to look at daily and weekly-bar charts to understand where long-term support and resistance are.
In any event, I’m always on the lookout for these strong up-trending stocks and trying to take advantage of a play if I see weakness intraday.
If you have a small trading account, this is a setup I think can serve you well if you learn how it works.
Letting The Short Sellers Drown
The problem with short sellers is that they are right the majority of the time.
Now, you might be thinking, how is that a problem?
Well, trading isn’t about just being right or wrong.
You also need to manage risk.
For example, if you short a stock at $5 and it shoots up to $25 first and then goes to $3…guess what?
Chances are you got crushed on that trade.
That’s why you need super deep pockets and a great deal of experience.
But today’s short seller is overaggressive…they are not thinking about risk management…just that their idea is right.
So what am I doing?
Playing into their weakness.
I’m looking for terrible stocks being shorted aggressively, and I’m trying to buy them during panic sell-offs.
For example, stocks like WeWork…
Earlier this month the company said it had substantial doubt on whether it would continue as a business.
Of course, that’s negative. And the stock is probably a zero at some time.
But it went from $.12 to $0.32 in just two days.
Last week I got into a similar type of play…I bought shares of the ticker symbol DRUG.
This stock was up huge in the pre-market on solid news. It was being heavily shorted, and I saw an opportunity to buy on weakness.
I got in at $4.95 and out at $5.78 in a matter of minutes.
As you can see from the chart, the stock did sell off after my exit.
That said, these are very fast trades.
And if I’m not right on the trade I’m not sticking around, hoping and praying that it goes back up.
I’m always focused on risk management and cutting losses quickly whenever I’m wrong.
The Two Accounts You Must Build
I tell my students that there are two accounts they must build up.
Their knowledge account and their brokerage account.
We can’t control the market, and sometimes there aren’t that many good trading opportunities.
And that’s something I want to help you with.
That’s why my team and I are committed to building your knowledge account up.
We host live training sessions every day. In these sessions, you’ll learn what stocks are making waves, and how we’re trading them to make money in the market.
The best part is we’re bringing this to you at zero cost.