The right setup can make or break your trade…
But with thousands of stocks to choose from, how do you decide which to take?
Today, I’m going to pull back the curtain on two different trades I took yesterday…
And give you an in-depth look at the strategies that made them profitable.
This isn’t just about making better trades, it’s also about:
- Figuring out who you are as a trader
- Playing to your strengths
- Learning to take advantage of opportunities when you see them.
It’s A Hard Life For Short-Sellers
It’s an endless summer packed with trading opportunities thanks to those stubborn, peanut-brained short-sellers.
It’s all about spotting the setup.
I had two trades yesterday I want to talk to you about, one in the ticker symbol BDTX and the other in TIVC.
Let’s start it off with BDTX which soared by more than 200%.
Shares of Black Diamond Therapeutics took off yesterday in the pre-market after the company released this headline:
Black Diamond Therapeutics Announces Initial Dose Escalation Data Demonstrating Anti-Tumor Activity of BDTX-1535 in Non-Small Cell Lung Cancer Patients Across Multiple EGFR Mutation Families
It went as high as $4.50 and then later dipped into the $3s.
I saw it as an opportunity to buy the panic dip on this morning spiker.
A lot of newbie traders will see positive news like that and just buy regardless of the price. However, if there’s one thing I want you to take from today’s lesson is that price matters.
You can be in the same ticker symbol as someone else, but if you are in at different prices– IT’S NOT THE SAME TRADE.
So yes, I did like the catalyst in BDTX, but I wanted to wait for my price. And if it didn’t happen, I wouldn’t have traded it.
I don’t care if I miss trades. I only want to be in them if the price is right.
My plan was simple, play for a quick 5-10% move. And if it didn’t happen, get out fast for a quick loss.
I entered the trade at $3.20 and was able to peel out at $3.42 for a solid 6.9% winner.
Now, the stock did get past the $6.50s…but I couldn’t get upset at myself because I executed my plan perfectly.
8:28 AM EST
<Breaking_News> $BDTX (20m float) Gap 1.84 to Pre mkt Highs of $3.27 Black Diamond Therapeutics Announces Initial Dose Escalation Data Demonstrating Anti-Tumor Activity of BDTX-1535 in Non-Small Cell Lung Cancer Patients Across Multiple… pic.twitter.com/uJcfjkyN2X
Of course, if I continue to see biotech runners hold…then I will be open to holding onto winners longer…but I haven’t seen that trend yet.
Now, let me tell you about the second trade, a totally different type of setup, this one in the ticker symbol TIVC.
Be Careful With Scary Stocks
BDTX wasn’t the only high-flying stock I traded yesterday.
I also got involved in the ticker symbol TIVC.
But instead of waiting for a panic dip buy, I decided to play the momentum breakout.
Shares spiked off the news that it entered into a non-exclusive distribution with Cardinal Health.
This is what we call legitimizer type news. That’s when a small-cap company can associate itself with a large-cap, giving off the appearance that the small-cap company is legitimate because they are doing business with “real” companies.
I got in at around $0.16…
The stock was all over the place…getting up towards $0.18 and then down to $0.15.
I prefer trading the panic dip buy…but if I do play for a breakout…the trade has to be clean. And this one wasn’t.
I decided to bail for a small win, getting out at $0.17.
What About You?
Some traders prefer being patient and waiting for a dip before getting long. However, others see dip buying as “knife-catching.”
Do you prefer buying breakouts instead?
Let me know in the comments section below.
And yes, it’s true. I’m on the hunt for some new millionaire students.