This week started strong on Monday, May 19 …
Protagenic Therapeutics Inc. (NASDAQ: PTIX) spiked 340%* after the company announced a merger with Phytanix. The resulting company will continue to work on treatments for obesity and metabolic disorders.
Look at the price action below of PTIX. Every candle represents one trading minute:
I pulled a 7% profit from this spike when it started to run during premarket hours.
My students and I wake up early every day to find these plays before the spike turns vertical.
But there are risks …
Anyone who tells you otherwise is lying.
To protect my account and build profits, I follow a specific process while trading the hottest stocks in the market.
My Process For Success
Too many traders try to time these stocks perfectly.
They see it as a “bad trade” if they leave money on the table.
That’s a dangerous mindset.
It’s almost impossible to time these plays perfectly. Let alone to do it over-and-over again on every hot stock.
For an example of my mindset, when PTIX spiked 340%* yesterday, May 19, I wasn’t trying to catch a 340% profit. I wasn’t even trying to catch a 100% profit.
My millionaire students and I use popular trade patterns to find low-stress setups that can yield 10% – 20% gains intraday.
My 7% profit on PTIX was on the low end of our potential trade setups.
Look at my trade notes below:
There are still risks when we trade these stocks.
But our trading patterns help us find setups where the reward outweighs the risk, as long as we’re able to follow the patterns.
The patterns are important because they show us where to buy shares at a point that maximizes our potential gains while minimizing our potential loss.
Now, understand that there will be losses during your trading journey. Even I lose from time to time.
How you react to those losses will define your success.
When To Take Profits V.S. Losses
A lot of traders understand how to take profits on a successful trade …
We sell our shares into strength as the chart follows our pattern.
Watch my video below for an example of these trading patterns:
But the other half of the equation is a bit foggier.
It can be confusing for new traders to understand when to take a loss.
- People don’t like to admit when they’re wrong.
- And they don’t like to lose money.
Taking a loss while trading is a combination of those two unpleasantries.
To help ease your mind and to show you how we control these losses, let’s look at a loss of mine recently.
On Friday, May 16, I bought shares of TSS Inc. (NASDAQ: TSSI) as it consolidated into the close.
The stock spiked 80% that day after the company announced bullish first quarter earnings for 2025.
I theorized that the price could spike higher on Monday as the news circulated over the weekend. So I bought shares above a major support level that afternoon.
I sold some of my shares later on Friday for a loss when the price dipped below my support level. And I sold the rest for a loss on Monday morning.
But I should have sold my position immediately when the price fell below my support level on Friday, per my trade pattern.
Look at my trade notes below:
Here’s my position overlaid on the chart. Every candle represents one trading minute:
Had I sold sooner when the price fell below my support level, I would have taken a 3% loss. That’s manageable.
Instead, I got a little undisciplined and took a 7% loss.
Small losses are OK and part of the process. Big losses are unacceptable.
Study this price action and learn from my loss.
Follow my trade patterns to protect your account.
Cheers
*Past performance does not indicate future results
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