In our daily lives, there are many ways we can perform some of our basic routines.
Maybe it’s the way we brush our teeth, comb our hair, or even how to put on our dress clothes before leaving for work.
And we all are looking to achieve the same end goal.
The same thing applies to trading, there may be many ways to trade a specific stock…
Regardless of the process, the end goal is to make money.
Take a look at my millionaire students, they all have taken the same type of strategies I taught them, but some of them put a twist on them.
Matthew Monaco trades crypto, and Mark Croock trades options…
But their trading strategy remains the same.
There are many ways to trade, but it’s important to remember to trade cautiously.
Over the years I have tested different strategies, and there is one that I typically stay away from…
Because it can feel like you are stuck in quicksand, and can’t get out.
Table of Contents
Don’t Get Caught On The Wrong End Of This
Many of you may question, what pattern can be so profitable…
And yet so dangerous at the same time?
Well, hate to break it to you, but any trade you make is always a risk.
When we place any trade we ultimately never know what the outcome is going to be, that’s why I created my #1 rule.
We want to make sure we have the right tools and strategies in place to help us better prepare every step of the way, instead of completely guessing with every trade.
There are thousands of stocks out there every day, but we want to find the ones that have the best setup and probability of going supernova, right?
Well, the way for most penny stocks to go supernova is from a stock being short-squeezed.
Short squeezes are triggered when short sellers trigger a rise in price on a stock that is being heavily shorted.
When this happens, this can send the stock parabolic.
Whenever there is a short squeeze, I tend to remember the stock forever…
Over the last few months, we have seen several short squeezes…
Many of you may remember the monster of a short squeeze we saw in AMTD Digital Inc. (HKD)…
But how about this recent one just last month…
Intelligent Living Application Group Inc. (NASDAQ: ILAG)
Short selling can be very risky and you can get stuck on the wrong side of the trade where you can’t get out…
Just take a look at one of my millionaire student’s comments who lost nearly a full year of hard work just on one simple trade…
ILAG got me today in size. I'm still in the game but I'm back to where I was in April. Max losses save accounts and I was too good to have them prior to today. I'll be okay. No need to express sympathy; I'll mute comments.
— Michael Goode ❤️ 🦆 (@goodetrades) October 15, 2022
Short selling is inherently risky, this is why I don’t do it anymore…
But there are ways to find these short squeezes prior to them spiking.
How To Potentially Profit On A Short Squeeze
Finding a stock before the go parabolic is one of the most difficult things…
But if you do, you may be on the ride of your life as the stock soars 100%, 200%, or even 500% in just a matter of hours or days.
So how would one find these types of plays before they happen?
Here are some key indicators that I look for…
Now, a short squeeze doesn’t happen every day where it makes a stock go supernova…
But we continue to see short squeezes happening, just like the stock below we saw this week.
Here is an example that I sent my students that were HKD-like, but needed a little bit more volume.
Satixfy Communications Ltd. (NYSE: SATX)
A lot of these stocks that are short-squeezed can follow my 7-step pennystocking framework.
So be sure to study my framework and make sure you are looking for stocks that have the potential to squeeze higher!
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Friday Thoughts
As the market was closed yesterday, I still reviewed a few of my plays from earlier in the week to see what opportunities I missed out on.
Every day I trade, I am trading a very similar pattern over and over again…
Some of you may say that seems boring, but in the end if you are making money, what does that matter?
Most of you probably repeat the same steps over and over again for your 9-5 job…
Except I repeat the same steps over and over again while trading, mainly with one pattern.
We all follow a regimented schedule in our lives, but we stick to what works, and what we are comfortable with.
Short selling can be very dangerous, but very profitable…
But I don’t recommend traders to focus on short selling as it can result in devastating losses.
Yes, all of these pennystocks come crashing back down to earth, eventually…
But you don’t want to guess at the wrong time and the stock continues to go 10, or 20 times higher than when you bought it for.
Continue to focus on the key principles I teach you every day, but I continue to stay away from short selling as I don’t want to see my 2022 gains disappear before my eyes.
Enjoy the weekend!
Cheers,
Tim
P.S. – Every day there are opportunities for traders, but then there are opportunities that are one in a lifetime. Throughout the several years that I have been trading, there are a few stocks that I look back on wishing I did things differently. As I don’t dwell on the past, I am looking ahead and keeping an eye on the next big thing.
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