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Watchlists-Penny Stock Investment Strategy

How To Invest in Stocks in Canada Using Reddit

Written by Tim-bot
Reviewed by Friedrich Odermann Fact-checked by Ed Weinberg
Updated 11/17/2023 17 min read

Investing in stocks in Canada through Reddit refers to using the social media platform to gather information, discover investment opportunities, and make more informed decisions about Canadian companies and the stock market. As someone who doesn’t invest but trades patterns, it’s all about information for me. The same applies to investing. Reddit serves as a community-driven platform where you can get diverse opinions on everything from tax implications to index investing, ETFs to individual stocks. Given its large user base, Reddit can sometimes even influence market trends, making it a resource you can’t afford to ignore.

You should read this article because it dives deep into how Canadians can leverage Reddit for stock investing, offering insights on everything from trending stocks to community-driven advice.

I’ll answer the following questions:

  • What is the role of Reddit in stock investing in Canada?
  • How can you identify top trending Reddit stocks for 2024?
  • What kind of influence does Reddit have on investing?
  • Why does Reddit impact the stock market?
  • Is Reddit relevant to ordinary investors in Canada?
  • How reliable is Reddit for researching stocks?
  • What are the advantages of using Reddit for stock research?
  • What should you watch out for when using Reddit for stock tips?

Still with me? Good. Now let’s dig into the details.

What Are Stocks in Canada on Reddit?

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Stocks in Canada on Reddit refers to discussions, advice, and tips shared on subreddits like r/CanadianInvestor and r/PersonalFinanceCanada. These platforms offer a treasure trove of information from a variety of users — from novice investors to financial analysts. Just like how I’ve shared years of trading experience, you can find experts on Reddit willing to share their wisdom.

However, be cautious. Just like you shouldn’t mirror my techniques without understanding your own risk tolerance, don’t take Reddit advice at face value.

Never invest more than you can afford to lose and always have an exit strategy. If you’re new to the Canadian stock market and need a primer on how to buy stocks, check out this guide on how to buy stock in Canada.

Identifying Top Trending Reddit Stocks for 2024

My top 8 Reddit penny stocks to watch in 2024 are:

  • NASDAQ: INVO — Invo Bioscience Inc — The Biotech Merger Penny Stock
  • NASDAQ: LMDX — LumiraDx Ltd — The Biotech Spiker With Partnership News
  • NASDAQ: LIAN — LianBio — The Biotech Stock With New Deal News
  • NASDAQ: INM — InMed Pharmaceuticals Inc — The Biotech Stock With Alzheimer’s News
  • NASDAQ: HUBC — Hub Cyber Security Ltd — The Israeli Security Stock Former Spiker

There’s always buzz about certain stocks, companies like Tesla or Moderna for instance. On Reddit, trending stocks are often upvoted and discussed in detail, providing a snapshot of market sentiment. When I trade, I look for patterns and trends. The same sort of scrutiny can help you identify potential investment opportunities in Canadian stocks. However, trending does not mean guaranteed success. It’s essential to pair this crowd-sourced info with solid financial analysis before making a move.

There’s no guarantee I’ll trade any of these stocks. I’m watching them to see if they match my preferred setups — only then will I trade them.

The best traders watch more than they trade — that’s what I’m trying to model here.

Invo Bioscience Inc (NASDAQ: INVO) — The Biotech Merger Penny Stock

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My first Reddit stock pick is Invo Bioscience Inc (NASDAQ: INVO).

You need to check in on the market’s hottest stocks every single day. That’s how we distinguish between stocks with profit opportunities and random movers.

For instance, you could have traded INVO for a profit if you knew about this market phenomenon: the biotech sector is red hot this year.

It’s called sector momentum. At any point in the market, some stocks are hotter than others.

The biotech sector is historically volatile. But the bullish volatility usually only lasts for a few months at a time.

In 2023 we’ve seen biotech stocks spike month after month since January.

INVO is the most recent example … 

On Monday, October 23 the company announced a merger with NAYA Biosciences during premarket hours.

In a merger, two companies that become one are more valuable than either alone. As a catalyst, it’s a great demonstration of value added.

And it’s exactly why the price spiked 460% before noon.

But the momentum behind these stocks doesn’t continue forever. Eventually, INVO fell back down.

That doesn’t mean it’s over. These runners can stay in play for days and weeks.

Keep INVO on your watchlist and tune in for a live trading session to discover which patterns we’re using.

Depending on the current price action, our strategy might be different.

LumiraDx Ltd (NASDAQ: LMDX) — The Biotech Spiker With Partnership News

My second Reddit stock pick is LumiraDx Ltd (NASDAQ: LMDX).

Another biotech stock. Make a note of this sector momentum!

I’m not some sketchy promoter here to pump my positions. I don’t even have any money in the market right now. I sit in cash and wait for the hottest opportunities. That’s what the smart money does in choppy markets …

Like LMDX, the company announced its partnership with AstraZeneca & Everton to set up the very first heart and lung screening hub in England.

But there’s a caveat.

Some of these companies don’t know how to play the game.

The biggest spikes come from stocks that release news during premarket hours. Then the market opens and the spike is still new.

But LMDX announced the news at 6:30 P.M. Eastern on Friday. That’s well after normal market hours.

By Monday morning, the price was able to spike 420% in premarket.

Unfortunately, when the market opened for regular hours the stock sold off. It’s all because the spike started Friday afternoon and premarket traders exhausted the price action.

There’s still a chance the price will bounce. After all: the news is fairly bullish and prices are still above the level it first spiked from.

But notice the timing of the catalyst and its effect on the spike.

It’s an important pattern to remember. You don’t want to get stuck on the wrong side of this volatility. And these movements can be quick.

LianBio (NASDAQ: LIAN) — The Biotech Stock With New Deal News

My third Reddit stock pick is LianBio (NASDAQ: LIAN).

On October 24, at 6:59 A.M. Eastern, the company announced an agreement with Bristol Myers Squibb.

Bristol Myers obtained rights to commercialize Mavacamten in certain Asian markets. In turn, LianBio received $350 million and doesn’t have to pay $127.5 million to Bristol Myers’ subsidiary MyoKardia.

Hopefully that all made sense. Essentially, LIAN gets a lot of money and doesn’t have to pay looming outstanding debts.

The price spiked 150% after the news was announced.

And prices consolidated into the close. Volatile stocks that consolidate between levels are an automatic watch.

There’s an intraday resistance level of $3.50 and decent support at $3.

If you’re unfamiliar with the concept of support and resistance, watch the video below …

It’s fairly straightforward. However trading without this knowledge could be disastrous for your account.

Take the necessary precautions and educate yourself.

Some of my students only find me after they’ve already taken a big loss. It could have been prevented if they knew the rules.

InMed Pharmaceuticals Inc (NASDAQ: INM) — The Biotech Stock With Alzheimer’s News

My fourth Reddit stock pick is InMed Pharmaceuticals Inc (NASDAQ: INM).

Some biotech stocks put out news and they don’t spike.

The type of news plays a significant role.

We usually see stocks with cancer news spike because cancer is a well-known illness and especially scary. Fear and greed move stocks.

Alzheimer’s is another medical condition that’s well-known and decently common in today’s society. An estimated 6 million Americans live with Alzheimer’s. Any potential cure is of obvious importance to the medical industry overall.

On October 24, INM published news that shows promising preclinical data from the INM-901 Alzheimer’s treatment.

The price spiked 250% as a result.

The chart could set up for possible plays in the next few days, but beware the $5.2 million financing announced after the market closed.

These biotech plays can offer HUGE profit opportunities. But they’re notorious for raising money in the middle of a spike. The financing usually pulls the rug out from under traders because the introduction of new shares makes every remaining share less valuable.

That’s why I wouldn’t hold these plays overnight. But they’re prime for intraday profits.

Hub Cyber Security Ltd (NASDAQ: HUBC)  — The Israeli Security Stock Former Spiker

My fifth Reddit stock pick is Hub Cyber Security Ltd (NASDAQ: HUBC).

Sometimes the biggest catalysts in the market are current geopolitical events.

For example, we saw a lot of volatility in the market during the 2020 COVID-19 lockdowns. We saw market volatility when the war in Ukraine first erupted back in February 2022.

I’m sure by now you’ve heard of the war in the Middle East between Israel and Hamas.

The attack on October 7 stunned the world. And we still see a lot of volatility in the market as tensions rise.

One of my main examples is HUBC. It’s an Israeli company that specializes in cyber security.

On the Monday after the attack, October 9, the price spiked 240%.

It’s currently consolidating between recent lows and the breakout level at $0.80.

We don’t know which way the price will go … but we can prepare for the best AND the worst case scenario with the right pattern.

The main question is: do you have enough discipline to stick to the rules?

Understanding Reddit’s Influence on Investing

Reddit’s power lies in its massive user base, generating a whirlpool of opinions, advice, and news. Think of it like having a room full of traders and investors sharing their two cents. I’ve always said, good trading isn’t just about buying and selling; it’s about understanding the market. The sheer volume of posts on Reddit can sometimes even move markets, both in Canada and internationally. It’s like having a community of traders and investors who help illuminate market conditions in real-time.

Reddit’s influence can be a double-edged sword. While it can spotlight undervalued stocks, it can also create unnecessary hype around certain companies. I’ve seen stocks skyrocket only to plummet later. This is why it’s essential to balance Reddit’s crowd-sourced wisdom with solid financial analysis. If you’re interested in understanding the pitfalls of investing in hyped-up stocks, read my thoughts on growth stock blues.

Why Does Reddit Have Any Impact on the Stock Market?

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The main reason Reddit can influence the stock market is its crowd-driven nature. It’s a large-scale exchange of information, almost like a virtual trading floor. Now, you know I keep my risk tight and cut losses quickly when trading. Similarly, Reddit threads can give you a quick pulse of market sentiment. If there’s a trending topic on Pfizer or SpaceX, it’s often a sign that these stocks might see significant activity in the near future.

Does Reddit Matter to Ordinary Investors?

Absolutely, Reddit matters to ordinary investors. Consider it an open-source platform where investment opportunities, financial advice, and market trends are up for grabs. It’s like how I make all my trades public, aiming for transparency. Ordinary Canadians, especially those who are new to investments, can gain a lot by merely lurking and learning. However, it’s essential to complement this with your own due diligence, just as I suggest to beginner traders.

Is Reddit a Reliable Place to Research Stocks?

Reddit is a starting point, not an endpoint. You’ll find tips, advice, and information there, but always verify before you act. I teach traders to develop their own techniques based on their comfort level and risk tolerance. In the same way, use Reddit to help form your investment ideas but validate them independently. Also, be aware that not all advice comes from well-intentioned folks; some could be promoting certain stocks for personal gain.

Advantages of Using Reddit for Stock Research

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The benefits of using Reddit are numerous. The platform offers real-time discussions, diverse opinions, and even breaking industry news. It’s an excellent place for Canadians to get a read on both national and international market trends. If you’ve followed my teaching, you know that real-time info can be a game-changer in making profitable trades or investments.

Reddit isn’t just about hot stocks and trends; you can also find discussions on more stable, dividend-paying stocks. These can be a great addition to your portfolio, offering a balance of growth and income. And guess what? Some penny stocks pay dividends too. If you’re looking to diversify your income streams, take a look at this guide on penny stocks that pay dividends.

Things To Watch Out for When Using Reddit

Reddit is a community, and like any community, it has its mix of experts, novices, and unfortunately, manipulators. Just like I expose promoters and thieves in the trading world, be cautious of users who might be pushing an agenda. Take special note of any disclosures and cross-reference tips with other reliable financial sources.

Key Takeaways

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Reddit can be an invaluable tool for Canadians interested in stocks, but it should be part of a broader research strategy. It offers the collective wisdom of a highly engaged community, but that doesn’t replace the need for professional financial advice or your own due diligence. Reddit is what you make of it, just as trading is not a one-size-fits-all game.

Trading isn’t rocket science. It’s a skill you build and work on like any other. Trading has changed my life, and I think this way of life should be open to more people…

I’ve built my Trading Challenge to pass on the things I had to learn for myself. It’s the kind of community that I wish I had when I was starting out.

We don’t accept everyone. If you’re up for the challenge — I want to hear from you.

Apply to the Trading Challenge here.

Trading is a battlefield. The more knowledge you have, the better prepared you’ll be.

Do you use Reddit for your research? Let me know in the comments — I love hearing from my readers!

Frequently Asked Questions

Does Reddit Have an IPO?

As of now, Reddit Inc. has not gone public, so you can’t invest in the company itself. But you can certainly use the app to enhance your investing strategy.

How Can I Identify Reliable Stock Tips on Reddit?

Look for tips supported by data, charts, and sound reasoning. Always cross-reference information with other credible sources. Remember, in trading or investing, doing your homework is crucial.

Are There Any Risks Associated with Following Reddit Stock Tips?

Yes, relying solely on Reddit can be risky. Just like trading, investing has its risks, and it’s essential to have a balanced portfolio and a well-researched strategy.

How Can Reddit Home Help in Stock Investment?

The “Reddit home” for stock investing is usually a subreddit where you can discuss money, options, shares, and capital allocation with other Redditors. These communities are a great place to gather information but should not be your sole basis for making investment decisions.

What Options Do Canadian Banks Provide for Stock Investment?

Canadian banks offer various services to help with stock investment. They provide options for trading shares, future contracts, and also allow you to leverage your capital to increase potential wealth. Always consult with your bank for personalized advice.

Are Companies Like AstraZeneca and Walgreens Good Investments?

Companies like AstraZeneca and Walgreens often make headlines and can be topics of discussion on Reddit. While these companies are significant players in their respective fields, the decision to invest should be based on a thorough analysis rather than Reddit recommendations.

Is It Worth Investing in Novavax or Best Buy?

These are companies that often come up in Reddit conversations. Before investing your money, be sure to look at their financial health, capital requirements, and future prospects. Reddit can offer anecdotal evidence but should not replace professional advice.

Can I Invest in Avatars and Collectibles?

Yes, you can invest in avatars and other types of collectibles. These investments often involve the purchase of unique digital or physical items that grant you certain rights. While not traditional forms of investment like shares or futures, they do offer another avenue for potential returns.

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Timothy Sykes

Tim Sykes is a penny stock trader and teacher who became a self-made millionaire by the age of 22 by trading $12,415 of bar mitzvah money. After becoming disenchanted with the hedge fund world, he established the Tim Sykes Trading Challenge to teach aspiring traders how to follow his trading strategies. He’s been featured in a variety of media outlets including CNN, Larry King, Steve Harvey, Forbes, Men’s Journal, and more. He’s also an active philanthropist and environmental activist, a co-founder of Karmagawa, and has donated millions of dollars to charity. Read More

* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”