Many traders are struggling to find the best trades right now, despite the overall bounce we have seen in the market.
Yes, there are a lot of big runners again…
But do you know what the next steps would be that you need to take?
With any stock you identify as a potential trade, it doesn’t mean they all have good setups…
You need to be able to spot the ones that have the best setup.
Recently I tweeted this…
You better be loving all these plays as much as my https://t.co/fljCJN9sHY students and I are….soooooo many big runners again $OTIC $COSM $COMS $HLBZ $CLNV $KGKG $CGRA $VGFC $GDVM $HUDI $MMAT $WSRC just an unreal market for traders again, thanks $DIA $SPY $QQQ SO much love!
— Timothy Sykes (@timothysykes) November 29, 2022
Are you unsure of what your next steps would be with these 12 stocks?
Everyone here should be studying and practicing for their very next move.
It’s not just about finding stocks, it’s about understanding the process.
Everyday things change in this market so you need to be prepared for every cure ball it throws at you.
So if you are wondering how I am able to find all of these potential stocks to trade…
And what the best setup looks like…
Be sure you understand these 3 key things I am about to share with you…
And what might be one of the hottest stocks that I didn’t mention above!
Table of Contents
Volume
How many times have you traded a stock based on a hunch, or thinking that it has to go up…
Without any research or indicators screaming “buy me”, you decide to buy the stock based on what someone may have told you…
The stock starts to slightly go up…
You start thinking this is so easy…
Then it starts to fade away.
To be honest, this happens more often than you think.
Stock volume is only one piece of the puzzle, there are several other factors that can come into play, but every single piece counts.
Volume can impact the stock price in a positive or negative way…
But you need to understand, stocks like Amazon.com, Inc. (NASDAQ: AMZN) or Apple Inc. (NASDAQ: AAPL) both have significantly more volume than the small-cap stocks I like to trade…
That doesn’t mean it’s automatically a better trade than others.
You need to understand the big picture.
When you have a stock that is having higher than average volume and we are starting to see the price movement we want…
This can lead to volatility, which is why I trade penny stocks.
Volatile stocks don’t mean you should stay away from them, it means they can move quickly resulting in quicker and larger profits.
There can be many reasons why a stock may have an increase in volume, so you want to be sure you don’t stop analyzing your trade here…
There are specific steps you need to follow, and this is the first step you want to take a look at after you find a big percent gainer.
Perfect Setups
Over the last several weeks, I have been able to trade some solid setups…
But I also got sucked into other setups that weren’t so great.
This all boils down to discipline and I unfortunately let my emotions get the best of me.
Trading is all about finding the perfect setups, and the other day, I steered away from exactly that.
I was trading speculative trades more than focusing on what mattered…
Currently, we are seeing several multiday runners, here are just a few…
Clean Vision Corporation (OTC: CLNV)
Cosmos Holdings Inc. (NASDAQ: COSM)
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Meta Materials Inc. (OTC: MMTLP)
Just because you are finding these multiday runners, do you know what your next step would be?
When you look at charts, you want to be able to identify if this has a perfect setup and what your next steps are…
But there is one other piece to the puzzle you don’t want to miss…
Catalysts
A positive news catalyst can be very powerful and it could bring a lot of volume to a stock…
This is why I encourage every trader to use this.
You never know when there is going to be breaking news regarding a stock…
Maybe you read about it on the internet a day or even days later…
Or you finally hear about it on the television as you are scanning through other stocks…
Sometimes when you hear this news minutes or even hours later, you already missed the move and now you are chasing.
This is why you need to act as quickly as possible if you start noticing a price movement from a positive news story…
Buying the stock on its ride up and locking in a solid gain.
Now we have touched base on 3 key things…
But this is what you need to do next!
Putting Together The Pieces Of The Puzzle
When you sit down every morning to scan for trades, this is what I want you to ask yourself…
- Is this stock a big percent gainer
- Does this stock have a significant volume
- Does it have a perfect setup for me to trade
- Is there a possible catalyst that is adding to its recent price movement
All of these questions are important to help you make a more informed decision on your next move…
And here is how I would apply these questions to a recent runner, Manchester United plc (NYSE: MANU)
Step 1) The stock has had a significant percent gain over the last several days, rising over 50%!
Step 2) Notice that the stock has a significant amount of volume that has surpassed all other trading days in 2022…
When you have your scanner to identify stocks that have significantly higher volume than usual and it’s a big percent gainer…
It should make you scratch your head and question what is the cause of this…
Step 3) Notice the resistance line I drew above and mentioned how it was a solid breakout.
These are the perfect patterns we want to look for.
You can see the stock broke through multimonth resistance and the next day it continued to gap up…
MANU had a solid uptrend and closed higher going into Thanksgiving…
But these are the pieces of the puzzle you want to dissect if you are wondering if the breakout is for real.
Step 4) After you go through Steps 1-3, you may want to do some research to see if there was a reason behind this significant price movement…
And the reason for that is this, and maybe not everyone here heard about the breaking news, which could’ve resulted in you missing out on this recent run-up.
You want to be able to spot these stocks early before they have a solid break out, at this point you are just chasing…
So be sure to go through these steps for every potential trade you find!
Final Thoughts
Trading has multiple steps to it, this is why it’s important that you study and understand every step of the process.
Just because you find a big percent gainer it doesn’t mean it’s going to result in an instant trade…
Every good trader should be able to find those stocks with the perfect setup.
All of this will come with time and practice as there are a lot of patterns out there for you to learn.
I don’t want any of you to feel discouraged, take it day by day and continue to study as much as you can.
Until next time,
Study hard!
Tim
P.S.- I get it, there is a lot for you to study with all of these different types of patterns out there. This is why it’s important for you to become very familiar with one step at a time before moving on to the next, and this is why every trader should make this their first pattern to master!
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