Have you ever felt your blood boil after a losing trade?
Join the club; most traders have been there, including myself…
But here’s the twist…
Hidden within those losses are invaluable lessons that can transform your trading game.
I’ve personally turned my biggest blunders into my greatest assets.
Just yesterday, I suffered a losing trade, but that didn’t rattle me.
Today, I’m going to break down both my winning and losing trades…
And how each of them taught me something new about this market.
Let’s dive in!
Bigger The Better
When you make a trade, you’re hoping for the stock to keep running higher and higher…
The higher it goes, the more you make, right?
As that’s true, it’s not always the right mindset to have when it comes to trading penny stocks.
Every morning I’m looking for some of the biggest percent gainers out there…
In fact, the bigger the better!
The thing is that I’m not looking to chase them or ride the wave higher unless it’s a StocksToTrade Breaking News Play…
I’m just simply waiting for them to panic…
And I’m always rooting for the biggest panic possible on these big percent gainers.
The bigger the morning panic the better chance for any bounce plays.
Most newbies like to just buy and hold…
But that’s one of the worst things you can do as a trader.
Today, I want to highlight two of my most recent trades…
But before I do, I want to remind you of something.
When you make a trade you shouldn’t expect to profit every single time…
And small losses are okay, it’s all part of the trading strategy to help you grow as a trader.
Let me show you why that is.
Small Losses Are Fine
Believe it or not, when I lose money on a trade, it could be a good trade.
Most traders base it on a win or a loss…
But I don’t see it that way.
If you want to improve on any trading strategy, it’s going to take time and practice…
Taking small position sizes and locking in quick profits, while cutting losses quickly if things don’t go as planned will help you better understand how this market looks.
Let me show you how that works.
My first trade was SeaStar Medical Holding Corporation (NASDAQ: ICU)
When I traded this stock on Wednesday, I was able to profit $382…
But yesterday, I didn’t make any money at all, I lost $350!
Source: Profit.ly
Most traders would’ve been upset with losing money…
But I see it as a valuable learning experience for me and my students.
Let me break it down for you.
Yesterday morning ICU gap-up…
Source: StocksToTrade
It’s nice to see such follow-up on ICU to help you understand how dead wrong short sellers were in their entire thesis/existence.
This is what we’re seeing time and time again, but if it wasn’t for their narrowmindedness we wouldn’t be seeing some of the opportunities we have today.
When I saw this stock spiking higher, I was waiting for it to panic…
And I was hoping for the biggest possible panic.
Just a few minutes after the market opened, ICU dropped roughly 7% off the highs and that’s when I decided to dip-buy it.
Source: StocksToTrade
I entered my trade at $1.17 and sold it at $1.10 for a -5.98% loss. (Risked $5,865).
When I tried to dip-buy it, I was initially trying to buy this quick dip, but looking at it now I should’ve been more patient and waited for that bigger panic.
Take a look where I drew the white line…
ICU bounced off of that earlier in the morning and did it multiple times throughout the day…
And if you look at the first chart I shared with you, it bounced off of that previous resistance level it broke out from.
It’s a good lesson for me and the same thing as my TGL trade yesterday, so make sure you’re learning from your mistakes for the next trade you make!
My second trade on the day was Spectral AI, Inc. (NASDAQ: MDAI)
Just take a look at this monthly chart…
Source: StocksToTrade
It looks the same as ICU and the one reason it’s spiking is all due to these over-aggressive short sellers.
All of you need to get used to looking for these types of plays every single day…
And when the market shifts, I’ll alert you, but right now this is where all of the plays are.
I hear it time and time again that they are crappy companies and they will fail…
I know they are crappy companies, and yes, 99% of them will fail…
But I’m not looking to trade good companies, I’m looking to make a quick trade and get out!
Penny stocks offer us the volatility we need to make quick trades and that’s simply what I’m looking to do.
Let me show you why that mindset was so important when I traded MDAI.
MDAI had a double bottom early in the morning and as it started to spike back up again and break through, I decided to take a small position size.
Source: StocksToTrade
I entered my trade at $4.24 and sold it at $4.58 for an 8.02% profit. (Risked $8,480).
MDAI didn’t have the big panic I was hoping for, but it had the volume and appeared to find a support level shortly after the market opened.
As soon as I exited my trade, you can go back and see that the stock had a double top and failed to break out and that’s when it started to fall back down.
If you held onto it hoping for a larger profit, you’d be wishing you sold your earlier gains…
That’s why it’s so important to lock in gains along the way and wait for the next opportunity to come your way.
There’s a lot that goes into trading, and it’s so important that you understand how this strategy works.
That’s why I encourage all of you to keep attending these FREE trading sessions to help you better understand what’s happening in these markets!
I’ll see you in chat
-Tim
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