What. A. Week.
While writing last week’s update I was on the way home from Australia. I mentioned heading to New York to speak at the Trader Expo. It was an excellent event. I spent time at the StocksToTrade kiosk. I actually made a trade from the kiosk using my laptop.
I’ll get more into that trade and a beautiful premarket play that sent the chatroom crazy. First, you can learn how to trade from anywhere with a good wifi connection — even a Trader Expo kiosk — when you apply for the Trading Challenge.
Tim Bohen and I hosted a Q&A: An Evening with Timothy Sykes & Tim Bohen, How to Trade Hot Sectors and Identify Stocks. It was like the bad boys of trading hit the city when we started knocking over chairs. (It was all in good fun.) There was even a moment of t-shirt throwing that got me in trouble with Bohen. Here it is …
Definitely watch the video to gain honest and hard-hitting insights like …
- Why it’s not fun getting rich, but it’s fun what you can do with the money.
- How boring old habits gave Ray Allen two NBA championship rings. They’re also the key to your success as a trader.
- Why it’s good that all the smartest and richest people hate penny stocks.
- And … how trading penny stocks is like crocodiles looking for dead ducks. I’m serious. Watch the video. Take notes.
In the video, Tim Bohen gave away the big news about something amazing we experienced on Tuesday the 12th. If you’ve been following me on Twitter, the cat’s out of the bag and you already know. I’m excited to share it with you — I’m gonna write a whole post about it. It was a dream come true.
For those of you who don’t know, I’ll say it was a great honor for me and the StocksToTrade team. More on that next week. Keep your eyes and ears open for it. [Hint: it’s about the Nasdaq. If you’re not on my email list — get on it. I’ll drop you an email when the post is ready.]
I just got back to the U.S. after spending the last week in Guatemala. As soon as the Trader Expo and Nasdaq thing finished I hopped on a flight to Guatemala. We had two new schools open with my charity.
We’re also working with a great charity called Pintando. We’re painting a small town called Santa Catarina Palopó to turn it into the Santorini of Guatemala.
The locals realize that traditional economic activities are no longer a sustainable option. In the past, agriculture and fishing could support the entire community. Now it’s not enough. Tourism, textiles, and sales of artisan products are now a major part of the local economy.
So the charity, Pintando, is helping this community transform through art. And they’re going to use the same model for other communities near Lake Atitlán.
We stayed at a stunning hotel nearby called Casa Palopó. This place is a definite must on your bucket list. Great food, incredible panoramic view of the lake … amazing staff. Go check out their website and let me know what you think.
There was only one problem: they don’t have great wifi. It’s unfortunate but so far I haven’t found anywhere in Guatemala with great wifi. It makes trading a little harder but I can’t really complain because we opened the two new schools and had a great time.
Table of Contents
Trades Of The Week: Two for the Price of One
I’m including two trades this week because it’s been so mental. Last week I didn’t even have time to write about the trade from the StocksToTrade kiosk at the Trader Expo.
Midday Breakout I Couldn’t Resist — Sky Solar Holdings Ltd (NASDAQ: SKYS)
So there I was in the STT kiosk at Trader Expo and SKYS spiked on news of a big new investor. I bought the midday breakout — which was moving fast — with a goal of making 10-20%. I don’t trade midday often, but this former runner had volume and the news catalyst. I couldn’t resist. I’ll take the $2,037 profit** on that any day of the week.
Here’s the chart:
“Tim, Why Would You Do This?” — Restoration Robotics (NASDAQ: HAIR)
This trade sent my chat room crazy. It was a dip-buy into a panic. So, my classic pattern. It was pre-market but I bought it nicely. I had a lot of doubters saying “Why would you do this?” And then 10, 15, 20 minutes later it worked out it was a good trade.
Take a look at the chart:
There’s a good lesson in this trade …
Yes, it was speculative based on a seeming earnings winner. But it was on a Friday. It’s okay to be a little more aggressive on Fridays once you have experience. By the time I entered my position, there were already nearly 2 million shares traded on the day. Pre-market …
My goal was to take 10-20% on the bounce-back near its highs. It did have a nice little bounce after breaking a wall of sellers at 1.40ish. Nothing huge, but again, it’s good to be aggressive on Friday mornings.
(Please don’t take this as a reason to go make some crazy trade that’s gonna blow-up your account just because it’s Friday. Do your research. Get experience with small trades. Experience played a key part in this trade.)
That said — join the Trading Challenge so you can learn how to do it. It’s not rocket science. Where will you be five years from now? Always a good question to ask when you have to make a decision to invest in yourself.
Big Runners — My Students Play the Hot Market
There are so many plays right now I can’t even keep track. A lot of big runners. This isn’t my pattern because I don’t like to chase. But it’s a hot market and several of my students are doing great.
Head over to my Twitter feed after you read this and check out some of the amazing things my students are posting.
You’ll find everything from people just starting their journey, studying a couple hours a day …
… to students taking singles and crushing.
Like this great trade by Aidan. He works full time and isn’t even a Challenge student yet. He’s developing his skills by working his butt off.
Or this conservative trade by Ryan. He’s learned that “getting out too soon” can be a good problem to have.
And this one by Johann. “Not greedy, just playing the price action.”
It’s inspiring. I’ve been trading for 20 years and teaching for 10. I love hearing about my students earning success through hard work.
It’s that time …
Question of the Week
This one from a student. I made a comment over on Profitly where I share all my trades. The comment was about a pre-market earnings spike gone bad. Instead of an earnings winner it turned into an earnings failure.
Here’s the comment I made on March 14:
UXIN now $1.40/share off its premarket highs, this is why you don’t just buy anything spiking on earnings, make the stocks prove themselves before you risk your hard earned $.
And the question of the week …
What type of proof are you looking for when you say ‘make the stocks prove themselves’?
Price action. If a play is really good enough, it should be able to hold its initial spike. Uxin Ltd (NasdaqGS: UXIN) was a recent runner at the end of 2018. Going into earnings it was uptrending because everyone thought earnings would be good.
It closed in the $4.60s and pre-market it was in the $5.30s. So everyone was “Oh, earnings winner.” But right at the market open it tanked. That is NOT an earnings winner. That’s an earnings failure.
So I don’t even try to dip buy something like that. Some people were trying to dip-buy it. As you can see from the chart below, when a company drops big in response to earnings …
… I don’t know what they said on the earnings call. I don’t know what earnings were. But for some reason, people don’t like it. And usually, this is the result. This is not a dip-buying opportunity.
And, you cannot just buy any stock pre-market because it has news. It has to spike pre-market and then it has to hold its gains during the regular market. Ideally, it should even extend its gain and close high.
Here’s the chart:
Pretty disastrous, right?
Now compare that to Aurora Cannabis Inc. (NYSE: ACB) They reported a new billionaire joined the board. You see the spike pre-market but then it held the spike. Then day 3 was when it actually really broke the highs. Day 4 and 5 was when you could have made a dollar a share.
The news was already out. So you don’t have to be there when the news hits. Take a look at the chart:
Respect the fact that a lot of these stocks spike on day two, day three … even day four. So you don’t have to be a slave to your computer. And shouldn’t necessarily be focused on what it does initially. The biggest moves sometimes happen later.
There’s a good lesson in the contrast between those two charts. Check them out again.
Millionaire Mentor Market Wrap
I’m considering changing the name of this section of the update to ‘The Closing Bell.’ You’ll understand next week. One of the coolest things I’ve experienced in my 20 years of trading.
The weekend is coming, right? Use it to study. Apply for the Trading Challenge. The year is one-third of the way gone … get on it.
Are you a trader? How are you trading the hot penny stock market? If you’re new to trading I’d love to hear from you, too. Comment below and share on social.
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