People keep asking how I spot my trades so quickly. When I nail the bottom dip-buying into a morning panic, it looks like I’m some kind of stock-picking genius. At least to the uneducated observer.
First, I don’t nail every opportunity. I misjudge sometimes — that’s part of trading. But it’s not rocket science. It really comes down to a few very basic ideas. I could say it in six words…
… tools, education, patterns, rules, patience, and dedication.
Here’s my reason for putting tools first: If you have the right tools it can help with your education. When you ask how I’m spotting trades … this is how. I use the right tools. Use the right tools, and you won’t wonder. You’ll see it because you have access to the tools. Simple.
Before I tell you about the tools — the best education I can offer is the Trading Challenge. All my top students are members. Apply today.
Here’s how I used to spot stock plays…
Table of Contents
The Old Way to Pick Stocks
You can still do it the old way. Each day, find the highest percent gainers priced under $10. Find those with news catalysts, good trading volume, and enough trades so you know it’s moving. That’s a good place to start.
Let’s say you decide to go this route. Here’s what you’re in for…
- One hour to check different websites to find the biggest percent gainers.
- One or two hours hunting down news catalysts and searching SEC filings.
- Another hour or two studying the charts to determine support and resistance, past behavior, and possible trades.
That’s a conservative time estimate for new traders. Most of the websites you’ll search don’t even have information about low-priced stocks. Yes, you can learn to do this faster, but that requires experience. Even once you’re experienced it takes time.
Let’s say, hypothetically, you’ve done your research. You’re ready. So, then you go to your broker’s trading platform only to discover…
Bad Brokers and Bad Software Are a Recipe for Disaster
Stop wasting your time with bad brokers. I hear this all the time: “I tried using thinkorswim. I didn’t get filled.” That’s because thinkorswim was acquired by TD Ameritrade, and I don’t find their execution to be ideal … just my opinion.
If you’re nickel-and-diming it by going for the cheapest broker, you’re throwing money down the toilet. You pay for what you get.
You want good executions? Pay a little more for your broker. That $5 or $10 you save on commission going with the cheap broker could cost you hundreds due to bad execution. Possibly more.
Bad Brokers Don’t Have Data
Here’s another one I hear from Robinhood users: “Oh, I don’t even see these stocks.” Yeah, no duh. Because Robinhood, in my opinion, also isn’t ideal for my needs. There are others where you can’t get the data you need for these stocks.
I use Interactive Brokers and E-Trade, by the way. I like to think of them as the least-bad brokers. Your goal with a broker is to be able to get your orders filled. Pay the commissions. It’s worth it if you need to get in and out of trades fast. Which you do.
And I don’t get paid to promote brokers. This comes up sometimes. The brokers hate me because I don’t trade enough. They hate me more because I teach my students to not over-trade.
Pay attention: I’m here to help you. I’m not necessarily your friend. I’m your mentor, OK? If you’re offended by me, go somewhere else. Come back when you’ve blown up your account because you ignore good advice, or worse, follow bad advice.
Here’s a better alternative…
StocksToTrade: The New Way to Pick Stocks
If you’re already a student and you’re not yet using StocksToTrade: Please use StocksToTrade. Use it every single day. It’s my blunt and transparent answer to the question.
Designed by Traders for Traders
We designed StocksToTrade for you. We designed it to help you. It has all my favorite scans built in. And you can create your own scans. StocksToTrade lead trainer Tim Bohen has scans you can upload when you watch the weekly webinars. Plus, he teaches you how to create custom scans as part of the 14-lesson introductory course.
I urge you to use StocksToTrade because it can save you time in the learning process. It doesn’t mean you won’t need to study. You will — a lot. StocksToTrade lets you focus on patterns and setups.
It gives you the opportunity to practice trading in real-time. And your paper trade orders are matched with real orders. It’s the closest to real trading you’ll find anywhere. Make no mistake, it’s not only for practice trading. It’s the one stock screener to rule them all.
Before I go any further…
Crushing the Conspiracy Theories
There are a couple of conspiracy theories floating around. Frankly, I shouldn’t even give them the time of day. But they pop up on message boards or comments every once in a while, and I’m sick of it. I’m crushing them here and now. They’re complete BS.
Conspiracy Theory #1: Tim tells his students when to buy and sell, and their actions change the price of stocks. Tim benefits when his students lose by following his trades.
Seriously?
Can you imagine what would happen if all my students followed my trades? If I actually managed to pump a stock’s price and then dumped so my students lost … I’d put myself out of business. I teach my students to spot pump and dumps so they don’t get scammed. More about my alerts for students later in this post.
Conspiracy Theory #2: “You only push StocksToTrade because you want more money.”
What? WRONG!
StocksToTrade is the tool I wish I had when I was learning. And it’s the tool I’m grateful to have now. Our entire goal with StocksToTrade is to provide you with the best tool possible. How long do you think it would last if I was just trying to take your money? Not very long, I assure you.
Data Costs Money
I don’t think people understand how much data costs…
I’ve had people ask why it costs more for a Level 2 data subscription…
It’s because Level 2 data costs us more! It’s pretty simple. Our cost basis for StocksToTrade is high. It’s not about making a bunch of money. It’s about you. It’s about giving you the tools to succeed.
I Win When You Win
I’ve designed everything around how to create successful students. My entire business is more successful when I create more successful students. And I’m happier.
It’s about you. It’s not about this conspiracy-theory BS. It does me no good if I make money on a trade and nobody else does.
How many students do you think would stick around if I was pumping stocks and they lost money on the play?
When you watch my DVDs I explain it all in very simple terms, but let me just clarify: If I trade 10,000 shares of a stock that trades 2 million shares a day…
… it’s not possible for me to affect the stock price.
Perhaps more importantly: I don’t recommend you or anyone trade from my alerts.
My Alerts Are For Education, NOT to Chase Trades
Don’t Follow Anyone’s Trades
I don’t want you to follow any of my trades. I don’t want you to follow any of my alerts. In other chat rooms, there’s a follow-the-leader mentality. They just mention a ticker and everyone tries to buy.
That’s disgusting.
I don’t want my students to follow me into trades.
I write out my trade descriptions because I want you to learn my mindset. I want you to learn my process. I want you to use StocksToTrade because it’s the right tool. I want you to become self-sufficient.
My top students are all self-sufficient. They don’t need me. They don’t need my process anymore. They’ve developed their own process … but it takes several years.
Let me clarify in case you skipped over that last part: It takes several years.
Beware of Scammers and Charlatans
Once you get in my chat room you’ll realize it’s different. It’s not a case of I buy, everyone else in the chat room buys, and then I sell. There are chat rooms like that. A lot of them.
There are a lot of fakes teaching these days. Ask whoever’s trying to teach you for all their trading details, not just profit and loss. A screenshot showing how they made $50,000 doesn’t mean anything. Show me everything.
How much did they risk? If they’re risking $300,000 to make $100,000 … that’s irrelevant to 99% of students. Some of these idiots are using up to $700,000 on a trade. They risk losing $50,000 to $100,000! Then they make $20,000 and it looks great because they post their screenshot.
Ask for every single detail. You need to see it. You have to dig in — be rude about it. There’s no room for dishonesty in this game. The reason that somewhere around 90% of traders lose is lack of preparation.
That’s why I started teaching. And I’m not gonna do it politely. I teach in my own way, and it offends some people. I could probably have more students if I was more polite. But it’s not about quantity, it’s about quality.
What I teach is to help protect you and make you self-sufficient…
Patterns and Rules to Keep You Safe
I teach several patterns. You choose what patterns you like. (And adapt to the market — because it changes.) You’ll figure it out over time, but it’s going to take time. Tim Grittani made nothing for nine months, even while studying.
Choose and Master Your Patterns.
Use StocksToTrade. Then focus on dip-buys, morning panics (my specialty), or possibly shorting morning spikes. That’s been working for some people — experienced traders. Newbies shouldn’t short. Period. My students Mark Croock and Tim Grittani report that they’re shorting nicely, but remember, they’ve been doing this a long time.
There are other patterns, as well, but it all takes time. And you can’t learn every pattern at once. The smart students pick one or two and master them.
Stay In the Game: Risk Management
Your number-one priority at the beginning is to protect your trading capital. That means learning to cut losses quickly. Every trade needs to be planned, and you have to stick to the plan. Learn to play by the rules.
Start with StocksToTrade to spot the plays. Then create your plan — which includes using a risk management system. Every. Single. Trade. Stay in the game!
Use the Best Tools Available
Trust me … In the beginning, use the tools I give you. Adopt the mindset I give you. Use the strategies and patterns I teach. It’s in my own best interest to create successful students. Why is this so mind-blowing for people?
Patience Is Key
You need to have patience. Singapore wasn’t built in a day. You won’t build your trading account in a day. You need to acquire knowledge. You need to gain experience when there are hot plays. Sometimes there aren’t any hot plays, so there’s no experience or knowledge to be gained. There’s definitely nothing to be gained from random stocks.
You Will Have To Do Research
“Oh, Tim, I’m watching random stocks today.” You’re learning nothing. NOTHING!
Study the past. I have a whole video lesson library and DVD library of good patterns. I also teach you what NOT to do. But don’t waste time. Don’t waste opportunity not using StocksToTrade or not using the right broker.
StocksToTrade doesn’t do everything for you. But it does put everything at your fingertips — in one place. You will have to do research, you just won’t have to go on some random search that can lead you down a rabbit hole.
You Will Have To Study
I wish I could tell you if you focus on such-and-such pattern and learn a few rules you could get views like this:
Unfortunately, it’s not so easy. So many traders lose due to lack of preparation and improper guidance. So be prepared to study your ass off.
Dedication Requires Consistent Action
I love seeing dedication. But don’t just think it. And don’t say you’re gonna be dedicated and then be lazy. You’ve gotta dig in. Don’t be one of the losers because of lack of preparation.
Use the right tools. Get the right mindset. Learn the right strategies. Get the right teacher.
Tools, education, patterns, rules, patience, and dedication.
How do I spot stock plays? It starts with the right tools. Give yourself the benefit of using proper tools.
There’s an old saying: A person shopping for a drill isn’t buying a drill — they’re buying the holes they can drill with the drill. You want crappy holes? Buy a crappy drill. You want good holes? Buy a quality drill.
StocksToTrade is an incredible tool and it’s what helps me do it. It saves me a ton of time. Wanna take it for a test drive? Start your 14-day trial now for only $7.
The Bottom Line
I’m not your therapist. I’m not a guidance counselor. I’m here to teach you what I’ve learned over the past 20 years. Sorry to be rude about this, but I want to be transparent. I don’t do well with snowflakes.
I know that’s offensive to some people but I’m trying to teach my students to protect themselves. The stock market is a battlefield. Penny stocks are a battlefield. If I don’t prepare you for war, you’ll get freaking annihilated like too many traders.
Are you a trader? Comment below by writing: “I will use the right tools.” What else will you do to prepare today?
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