20 Stock Trading Lessons From One of the Hottest Stocks in the Market

This is a very important post today with 20 stock trading lessons from one of the hottest stocks in the market…

Alpine 4 Technologies Ltd (OTCQB: ALPP) has been on fire recently.

A lot of people rip on low-priced stocks and they rip on OTCs. For me, I keep seeing the same pattern … and this one has been incredible.

I’ve traded ALPP five times during this recent run. The first was while the stock was running into the close on October 29. I wrote about that trade in my top penny stocks to watch in November watchlist — which included ALPP.

Since then I’ve focused on dip-buys into panics on this stock. Every trade was profitable. But each also provided lessons. So I want to share some of the lessons with you. Again, my goal is to be the mentor to you that I never had. Apply for my Trading Challenge here.

With that in mind…

20 Lessons From My Recent ALPP Trades

First, take a look at the 10-day chart to see ALPP’s massive volatility over the last couple of weeks…

Lesson 1: Don’t Look Forward to Trading too Much

When this stock kept running between October 29 and November 1, it was unreal. When it gapped up on November 4, I knew it was gonna give a good morning panic dip buy sometime this week.

That got me excited to trade. I looked forward to it too much. And that’s a classic mistake. It happens to everybody, which is why I want to point it out. I was looking forward to the trade, and then during the trade, I psyched myself out.

Lesson 2: My Patterns Work, But It’s Not an Exact Science

The pattern I traded — a classic example of my morning panic dip buy — works well. When you watch my Pennystocking Framework or Pennystocking Framework Deux DVDs, you’ll see this pattern is part of the framework. I’ve been trading this pattern for years.

Profit.ly user CrazyWillows also saw it on November 6…

01:51 PM CrazyWillows ALPP great example of the first 5 steps of the framework…

But it’s not an exact science.

With each of my four ALPP trades this week, the pattern played out almost perfectly. But there were some fakeouts — and I fell for more than one. Which leads me to the next lesson…

Lesson 3: You Don’t Have to Time It Perfectly (You Don’t Have to Nail the Bottom)

First, take a look at the intraday chart from November 6 to illustrate this lesson…

You’re not gonna get the exact low. From the low in the 13-cent range, the stock ran all the way to 26 cents a share. Let’s say you time it almost perfectly and buy in around 14 cents a share. And you sell perfectly and get out when it hits roughly 23 cents at around 12:30.

If you do the math, that’s a 64% bounce. And for me, I probably wouldn’t have held even through the previous dip (click on the chart to open it in full-size view in another tab). I probably wouldn’t have held it through the consolidation there around 10:30 a.m. So best-case scenario for me was roughly 14 cents to 19 cents. But that’s still over 35%!

Lesson 4: Patience Is Key

Again, I was looking forward to this pattern playing out. I didn’t have enough patience. If you look at the chart again, I bought the very first dip right near the market open. I got in at 17 cents and out at 18 cents. Yes, I still made $415. But the move I got was only 5.88%.

I wasn’t patient enough and tried to force it. This might be one of the most important lessons in this post. I have some students who are very patient and others who are impatient. The good thing is, you get to choose. For me, I’m working on being more patient.

Lesson 5: You Can Still Be Profitable Even When You Underestimate

This is a good lesson. I was profitable on each of my five (so far) ALPP trades. Two of my four trades this week I’m pretty happy with. But I’ve underestimated this stock over and over again. I underestimated its upside … and I underestimated its downside.

I underestimate stocks all the time. It’s nothing new to me. And I’m consistently profitable. That’s one of the beautiful things about my strategies. The patterns play out similarly and you just have to learn how to take the better part of the move.

Lesson 6: Bigger Panic, Bigger Bounce

For me, I want stocks like ALPP to spike as much as possible and then drop as much as possible. That’s the formula for the biggest bounce possible. I even said it in my Profit.ly commentary on November 5…

11/05 10:20:11 AM – Sold 10000 of $ALPP at 0.37 – Took a nice little bounce, really need more panic to have a bigger position and potential bigger bounce so small gain here, hoping for bigger panic in a bit, today or more likely tomorrow.

I took two trades that day. On the first one, I took a very small position because the panic wasn’t big enough. It got a little bounce, but I know from experience that it needed more.

The second trade, I took a bigger position size. Why? Because the stock had a bigger panic, which set it up for a bigger bounce…

Take a look at the intraday chart from November 5…

Again, on the first trade, I took a smaller position because the panic wasn’t that big. So I made $290 profit on an 8.5% gain.

The second trade, my position was twice the size. And the stock got a bigger bounce due to a bigger panic. So I made $860 on a 16.41% gain. Memorize the pattern.

Lesson 7: Some Stocks Don’t Bounce

This is very, very important. Sometimes these stocks don’t bounce at all. That’s why you have to follow rule #1: cut losses quickly. You have to be careful. Don’t just randomly guess where the bottom will be.

Lesson 8: Focus on Perfecting Your Process More Than Profits

It’s not about how much you profit or even how much you lose. You should be trying to perfect your process. Even though this is an imperfect game, you want to try to capture as much of the move as possible. Perfection is never possible, but you should strive to get better.

Which is why I became a teacher. I love my job and I love helping others achieve their potential. But it takes a team of mentors and chat-room moderators like Mark Croock who had this to say about the crazy week we’ve had in penny stocks…

Finally a busy week in smallcaps…. we nailed all the best setups in @timothysykes https://t.co/YxjLdWOlXl chat $ALPP $XNET $AGRX $FCEL both long and short 🙂

— Mark Croock (@thehonestcroock) November 8, 2019

Lesson 9: There Are Different Opportunities

Several of my students had success with this stock at different times. Some did well after the bottom had already been put in on November 6. Look back at that chart at the consolidation between 10:20 a.m and 10:45 a.m. Some students bought there in the 16–17 cent range.

One of my top students, Huddie, gets it. Check out his chat comment early on November 6:

0:27 AM Huddie $Alpp , for me personally, its that first turn on the level 2 after a massive panic of 30%+. That was .24 yesterday. There are multiple angles, whens, and ways to make money on a stock. You do not have to understand them all, find the familiarity for yourself and play that moment. I’m won’t touch $Alpp from here on out, but I do think there is merit in looking for dips today. Make sense?

For me, I prefer the big panics right at the open. Whichever part of the pattern you like to play, you have to put it in perspective.

Lesson 10: Trading vs. Investing: Which Has More Potential?

I love the 64% bounce this stock got in roughly two and a half hours on November 6. But look back at that chart. Look at the entire day. The total bounce was 100%!

Again, you’re not gonna time it perfectly. But even if you only managed to get 15% out of the stock on the day, that’s a good annual return for investors.

Trading takes more time and more effort. You have to be more meticulous. But at the same time, it’s laughable that people will try to make 10%–15% on their account over the course of the year.

They say, “That’s the stock market, that’s investing.”

All I can do is shake my head. That’s gonna take forever to get rich. So while a lot of people rip on me and rip on penny stocks … if you can wait for these perfect plays you can make 15% … or 30% … or more.

Yes, I mistimed it a few times. But I made over $2,500 on this stock trading it five times with very low risk.

Lesson 11: Don’t Overtrade

When I missed the big 100% move, I have to say I wasn’t happy. In a perfect world, I could just go back in again, and again, and again. But at some point, I start to think it’s one of those weird plays that doesn’t bounce. The more times I tried to buy it, the more it felt like I was trying to force something.

So I didn’t put myself through the pain of a bunch of frustrating and meaningless trades. I stuck to trading my pattern. Even though I was early a couple of times, I was on the right track.

Lesson 12: Beware of Mental Fatigue While Trading

When I missed the big bounce on November 6 — remember, I played the small panic right at the open — it kinda mentally fatigued me. And again, even though I profited on all three trades to that point, it was starting to wear on me because I’d misjudged.

It was a case of thinking, ‘This is the bottom … OK, now this is the real bottom …’

But it wasn’t the bottom. And even though I profited, when the actual bottom came, I didn’t want to partake because I was too mentally fatigued.

Lesson 13: Trading Can Leave a Mark on Your Psyche

Understand that my trying three times for the ultimate crash … even though I made money … it left a little mark on my psyche. Why? Because even though it took the majority of the move, I was wrong about my entry. I didn’t get the big bounce I wanted. Then when I saw the big bounce, it was frustrating. Be prepared for that.

Lesson 14: Stick to Your Trading Plan

This is important. When a stock isn’t doing what I expect, I get out. The reason each of my ALPP trades was profitable is because I stuck to my trading plan. Yes, I got in too early a couple of times. But the last trade I absolutely nailed the bottom. (See that trade below…)

Lesson 15:  Being on the Right Track Is Better Than Being on the Wrong Track

One of the reasons I was able to overcome the psychological aspect of trading this stock is because I was always on the right track. I psyched myself out after missing the big bounce, but I had enough confidence to retrade it.

Lesson 16: Hold and Hope Is NOT a Strategy

The philosophy of hold and hope is a good way to blow up your account. Going back to my trade on November 6, I could have held from 17 cents where I bought. I could have held all the way to the end of the day and made a nice big profit.

But what if it never bounced? So I’m proud of myself for not holding and hoping. Live to fight another day…

This is something you really have to guard against. Focus on safety.

Lesson 17: Fear of Missing Out 

If you miss a trade, don’t feel bad. I’ve been doing this for 20 years and I missed the majority of that bounce on November 6. But yesterday … I nailed it.

You’re human. No matter how much experience you have, it’s not a given. So if you missed the whole move or missed your trade on it … don’t worry. The pattern will come around again.

Twitter user @Vetting4Success has the right idea:

$ALPP still teaching. I played it on the way up forming the supernova, but missed the dip buy opportunity. Rewatch @timothysykes Dip buy video. Time to rewatch Trader Checklist.

— Ken Reed (@Vetting4Success) November 7, 2019

If you couldn’t trade it because your broker restricts certain stocks … maybe consider changing brokers. I use these brokers. And recently I warned against using brokers like this.

Lesson 18: Focus on Solid Plays With the Most Potential

Focus on big percent gainers and watch to see if they have multiple green days. Those can become the hottest stocks in the market. Then…

Start looking for these morning panics on multi-day supernovas. If you start looking for them, you’ll start to see this pattern. Even if you miss out on the actual trade — or misjudge it like I did a few times — once you’ve seen it 10 times, you’ll notice the similarities.

When you watch my Pennystocking Framework or Pennystocking Framework Deux, you’ll see this pattern. Plus, I have more than 800 video lessons on morning panics over on Profit.ly. Subscribe to PennyStocking Silver for access to the entire library of over 6,000 video lessons.

Lesson 19: Successful Traders Test and Tinker

Even with experience, you’ll have to test and tinker. Again, after two decades of trading, I’m still making adjustments. I still have some tinkering to do. So don’t think this is gonna be handed to you just because you have five years of experience. Test, test, and test some more.

Lesson 20: Constant and Never-Ending Improvement

This is super important. I always try to get better.

Those other trades, I didn’t mess them up from being over-aggressive. I messed them up not being aggressive enough. And with ALPP I knew if there was another opportunity I was going to take it. And I did…

Take a look at the ALPP November 7 chart…

I missed the big bounce on November 6. And even with the trade you see in the chart above, I still sold too early. But nailed the bottom this time and met my goal with a 19.52% gain of $904.

Some people asked why I bought where I did. It’s because the stock had lots of support in the 20-cent range. Take a look at the 10-day chart again and you’ll see it. So buying at 21 cents, I had a penny of risk. I’m happy with that.

Conclusion

There are so many lessons you can learn from a stock and from trades. Not only is ALPP one of the hottest stocks in the market, it’s another example of a stock that follows my Pennystocking Framework. Learn the framework as a member of the Trading Challenge. Apply today.

A lot of people asked me why I kept trading this stock. So I’ll give you a bonus lesson as an answer to that…

Bonus Lesson: Take Advantage of Volatility Like This

I can’t waste this kind of volatility. ALPP is one of the hottest stocks in the market. Yes, I got too antsy. And I missed the big one on November 6. But I didn’t want to chase into the close that day. Several people asked why I wasn’t taking the first green day for an overnight hold.

Profit.ly user Henry_L was thinking about the overnight hold. I’m happy to see that he locked in profits…

03:27 PM Henry_L There seems to be some confusion with the FGD here on ALPP. I got in at .23 (late entry on my part but I acknowledge it as soon as I entered….in hindsight of course…), and I got out at .2599 – I was really hoping for a Tim Alert, would have pushed this bad boy even more.

The thing is, it had already bounced 100% off its lows. I don’t like to chase like that. But…

… that set up the perfect chance for another morning panic. And that one … I finally nailed. Woo hoo!

Remember, be patient … wait for only the best setups … cut losses quickly, and…

… happy hunting.

See you in the chat room.

What Students Are Saying

So many students traded this stock. Some went for dip buys like me, others played the breakouts. There were even some successful short sells as you’ll see below. Here are just a few of the many comments by Profit.ly users…

Trading Challenge Chat

November 4: 

09:30 AM michaeldufresne sold ALPP at .263 from .209.

09:44 AM LKScientist ALPP IN at 0.225 (Friday evening) and out at 0.299 (now).. 30% profit.. unfortunately only 1/4th of my buying order was executed well and i had a small position (2200 shares).

09:51 AM mkashou11 Small gain on ALPP. In at .28 out at .32.

10:03 AM tstinson made $711 on ALPP this morning! Done for the day!

10:16 AM Jackaroo ALPP took some long at .27 into morning spike, but sold awful at .29 -.30.. then shorted .33 and covered down here at .28.

I’d also like to welcome Trading Challenge student Titan06 who only found the chat room on that day… Welcome!

10:41 AM Titan06 since i started THE CHALLENGE i have been studying the dvds i completely forgot to look at the chatrooms a lot of insight!!!! love this [expletive deleted]!!!!!

November 6: 

06:02 AM KCremeens ALPP might be headed for the dip Tim mentioned yesterday.

10:20 AM jtran That was the dip buy on ALPP had my order set at .13 missed by half a penny. oh well.

Don’t worry about it jtran. You’ll see this pattern again. Be happy you were on the right track!

11:01 AM ABayer Made another 50 on ALPP. In at .16 out at .19.

11:47 AM Bloodhound $alpp in at .1502 on 10k shares out at .2101.

TimAlerts Chat

November 6: 

11:35 AM Androo ALPP having its #5 bounce, I misplayed this one a bit, got out a bit early but I’ve learned.

12:12 PM StickerJon In ALPP .166 10K out $.217.

November 7: 

09:33 AM Androo ALPP in at 20.21c out at 22.11c too quick to alert.

09:34 AM RussellET Good dip buy on ALPP 0.21 to 0.23.

10:41 AM Androo ALPP quick play in at 25.06c out at 27.38c.

And Finally… a Few Comments From Twitter

Look at this nice trade from @SublimeTrades:

I needed this, I haven’t been close to 4 figures on a trade since September. Shorted $ALPP near the open, highest short at .395, covered the last of it at .2101 for $965 profit (2.54 R). Need to work on my timing on adds when shorting. On to the next. @timothysykes pic.twitter.com/2PaBUb9msH

— John Papa (@SublimeTrades) November 5, 2019

And this one from @Jackaroo … Jack Kellogg:

$ALPP Nice OTC first red day (-50%). I didn’t trade it perfect, but still happy with it. $NIO nice little wallet pad in power hour. Lately, I’m trading safely and small consistent profits following..@timothysykes pic.twitter.com/NKzftZJFxB

— Jack Kellogg (@Jackaroo_Trades) November 5, 2019

And finally this from @TessaLamping, one of the hardest studying students right now. We need more female traders!

@timothysykes Missed the big dip on $ALPP. Had my support lines at .14 and .16. Saw buyers at .16 so I bought at $.168 and missed .19 so sold at .18. Then watched it dip until my original support line at .14 and climb to .17… still learning OTCs! pic.twitter.com/BS1Kz9W09z

— Tessa (@TessaLamping) November 6, 2019

[Note: these results aren’t typical. These students and I put in the time and dedication and have exceptional skills and knowledge. Most traders lose money. Always remember trading is risky … never risk more than you can afford.]

What did you think of this post? Comment below, I love to hear from all my readers!