Being a great trader isn’t defined by the amount of money you make…
But rather knowing how to spot some of the best opportunities that other trades fail to see.
In this present market, my students and I aren’t generating record profits…
And I’m constantly reminding my students not to be overly aggressive and continue to lock in small profits every chance they get.
On Monday, I placed my first trade near the market close, locking in a small single that may not seem like a lot to some…
But knowing how to find opportunities like this can help you as you grow throughout your trading journey.
So today, I am going to show you how this trade caught my eye and what you can do to spot the next opportunity like this.
Breaking Down IDEX
Before any trade, I’m always looking at the big picture.
You don’t want to just focus on what’s happening currently, you also want to know the history behind any stock before you trade.
Looking back at the last few years, you can see that the stock is a former Supernova…
And this fits my 7-Step Penny Stocking Framework almost perfectly.
The reason I look back at a stock to see if it was a former runner, or Supernova, is because I want to know if it has the ability to spike.
It doesn’t necessarily mean it’s going to get back to where it once was, but it has the ability to move quickly on any given day.
But this isn’t the only type of chart I look at, let’s take a look at the chart over the last few months…
Looking at this chart you may ask me, “Tim, why would you ever trade this ugly chart?”
To be honest, it was a speculative play and I was testing my First Green Day strategy on this former Supernova.
You don’t need to take big risks on every trade, and if a trade doesn’t work out, you simply have to know how to cut losses quickly.
That’s what trading is all about, no trade is going to be perfect, and it’s ok to test out your strategies.
With any trade, I’m just looking to take the meat of the move.
I went in with a small position size and as always, have a target price in mind, and here’s how I was able to spot this opportunity on Monday.
Step-By-Step Play
Let’s take a look at the chart…
The reason this stock caught my eye is because it was a big percent gainer on the day…
Every single one of you should be looking for a big percent gainer every morning, then apply it to the strategies I teach you every single day.
At first, I didn’t really think too much about this stock…
And take a look at how the stock quickly moved in the early morning, from roughly $0.025 a share up to nearly $0.05…
That’s nearly a 100% move!
No large-cap stock is moving 100% on any given day, and that’s the beauty behind these penny stocks.
I teach all of my students how to look for these types of moves.
It’s important to realize if you find a stock that spiked 100%, you don’t want to chase it…
You want to plan for what your next move is going to be.
That’s exactly what I did.
I entered my trade just a few minutes into the close at $0.0457 a share but decided to add to my position size at $0.044 a share.
Just an hour after the close, I exited my position at $0.051 for a $549 profit or a 13.59% gain. (Risked $4,041 in capital)
I didn’t want to hold onto this trade any longer than I needed to, because first, this stock wasn’t an OTC…
So it was trading after hours, and if you know me, I can’t stand to hold onto a stock any longer than I want to.
If this stock was a First Green Day on a Friday and was an OTC, I would’ve followed my over-the-weekend strategy…
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Because OTC stocks don’t trade after hours, and if there is a powerful enough catalyst involved in the stock’s price movement, it could potentially jump as soon as the market opened on Monday.
Final Thoughts
The reason I pay attention to a First Green Day is that it could potentially signal the start of something bigger.
It doesn’t mean isn’t going to happen every single time, so don’t go jumping into it thinking it has to move.
In this current market, I’m just looking to take small profits with my trades and do it with minimal size.
You don’t need to go for a home run every time.
It’s important to protect your trading account and when things start to heat up again, I’ll be sure to let you know.
Study up, stay safe, and I’ll see you in chat!
-Tim
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