Time and This… Could Mean More Cash
I can’t say it enough: how truly grateful I am to be able to work from anywhere. To be able to live the laptop lifestyle and teach students how they can achieve their own monetary freedom to live the dream life.
I’ve said it before and I’ll say it again — you can do it too.
All it takes is some practice and studying… lots and LOTS of studying. And you’ve already started off on the right foot by reading Penny Stock Millionaires. So kudos to you.
So give yourself a little pat on the back and read on for today’s lesson…
If you’ll recall, in the last issue we talked about the daily power hours for trading.
(If you didn’t read that issue, I encourage you to go check it out before reading on.)
Want to take advantage of these trading windows? There’s a new, never-before-seen strategy that lets you do just that… you can find out about it here.
But if you want to tackle it on your own… then you need to be able to identify how the market is trending and what that could mean for any possible trades…
Trade When the Pattern is Right
I teach my students patterns — the same patterns I’ve been trading for the past 20 years.
I keep seeing them. I don’t trade every pattern all the time. After all, markets fluctuate. Things change. Technology changes. Patterns evolve. You will have to adapt.
But the underlying patterns — I keep seeing them. They look very similar to what I was seeing 10-years, 15-years, even 20-years ago.
I’m not saying they’ll last forever, but while they do, take advantage of them. I call myself a glorified history teacher. I believe if you study patterns and prepare, you’ll start to see them.
Study Patterns … But Beware of Memorizing a Pattern
There’s more to it than memorizing patterns. Learning a pattern is an important step, but only the beginning.
Patterns evolve, they mutate.
They shift with the market.
Not every supernova chart looks exactly the same. Patterns have variations.
Take dip buys, for example.
What if a stock is panicking on a Thursday during afternoon power hour? Should you take a position? Is this a potential dip buy? No. Because that price action can lead to a morning panic the next day.
I don’t want to buy just anything on a dip — it’s like trying to catch a falling knife. I’m always thinking: What does this move that’s happening right now … what does this indicate is likely to happen the next hour or the next day?
Preparation is key. Most traders lose because they aren’t prepared. So learn the patterns, be able to see them, and understand how they play out.
How can the afternoon trading help you predict the next morning? How can a morning play turn into a potential afternoon play?
It’s all connected. Like I said, it’s not an exact science. But I hope you’ll begin to see how interrelated the power hours are. The key is being prepared. I want you to be prepared and I want to help you get prepared.
I want you to see the pattern before you execute. Before you get into a trade. See it in your mind. This doesn’t mean the stock market is going to bend to your will — don’t take me wrong. It’s absolutely NOT going to do what you want … the stock market doesn’t care.
Sometimes I get the pattern right but my timing is off.
FOR EXAMPLE: Like my recent $25 profit on CBD Unlimited Inc (OTCPK: EDXC). A measly $25 win … which could have been much more if I’d got the timing right. But instead of hold and hope with the possibility of losing a bunch of money — I took the miniscule win and took a step back.
If you looked at the EDXC chart at the time, there was a morning panic followed by massive — over 100% — bounce.
Recognizing the potential for that is preparation. It’s not random. I misjudged the timing. And it just means I need to be prepared for the next one.
That’s what I want for you — to prepare for the next one. Who cares when it happens. The question is … will you be prepared? There are opportunities everywhere. In the stock market there are opportunities both long and short — if you’re prepared.
Cut Losses Quickly
I say this constantly. I write about it, tell you to do it in my videos, and tell my students to do it when I alert trades. This is rule #1 for a reason. This post fully explains when to cut trading losses.
Remember: Whatever trade you’re in, it’s a moving target.
Trade scared and you’ll never be scared to trade.
Whether it’s pump and dumps, earnings winners, contract winners, or any other big news, you need to learn what drives price. You will lose some. But if you’re prepared — if you’ve studied and follow the rules — it can better help you trade the market the right way. Know and understand catalysts.
Trade Only When the Pattern Presents Itself
One thing I want to make clear: Don’t force trades.
I have to repeat this to students on a regular basis. So take it in — tattoo it on your forehead if necessary. (Ok, don’t do that. It wouldn’t look good. But remember it. Don’t force trades.)
If I don’t see anything worth trading, I don’t trade. Sometimes the best trade is no trade. Patience, while tough, is necessary to grow your account.
Trade When Your Head Is Straight
I can’t stress this enough. Yes, this post is about my favorite times to trade. But I also want to make it crystal clear that there are times when you shouldn’t trade. Don’t trade when your head isn’t right.
Don’t trade if/when you’ve been drinking or taking drugs. It’s a recipe for disaster.
Keep a clear head during trading hours. Enough said. Heed this advice. Ignore it at your own risk.
You’ve been warned.
Another time when your head is not straight is when you’re sick. It messes up your perspective. I had a bad loss back in 2016 trying to short a stock I should never have been trading. I got biased and broke my own rules.
The price I paid?
Roughly $37K. Painful lesson. If you’re going to step in front of a freight train, you’d better be sure it’s worth it.
I’ll repeat this because it’s important: Trade scared and you’ll never be scared to trade.
I trade conservatively. I have my hand on the button to get out of a trade at any moment. See my previous point about cutting losses quickly.
Be ready to get in or out of a trade at any moment.
FOR EXAMPLE: I recently had a trade where I lost $745 on Medicine Man Technologies Inc (OTCQX: MDCL). I couldn’t get my sell order executed.
Sometimes this happens. If I’d set an electronic stop or not been nimble it could have been a lot worse.
Think Like A Sniper
Watch the movie “Enemy At the Gates.” It’s a great movie. It can teach you things about trading. Sniper versus sniper. You have to learn to think like this with trades.
What’s your target? Go only for that target. Win or lose, know when it’s time to get out. Focus.
Part of this concept is trading when your schedule allows. In other words, I don’t freak out if I can’t trade because I have another commitment. Nor should you.
Don’t try to trade and do something else at the same time. Either trade or don’t trade. But don’t trade and do something else. It’s usually a bad combination.
Time of day is important to consider when trading. But it’s not the be-all and end-all. Sometimes it’s better to just sit on the sidelines.
The two power hours are my favorite times to trade. If something perfect happens at another time, I sometimes take a trade. For example, a late morning spike with volume and a news catalyst.
When things aren’t right or I don’t see the perfect pattern, I stay away.
Editor, Penny Stock Millionaires