One reason why 90% of traders lose money is because they don’t give themselves the best chance to win.
What do I mean by giving yourself the best chance to win?
You can overcome a laundry list of mistakes if you focus on the right things.
I dedicate this to anyone who thinks everything has to be perfect to have a winning trade…
How a Struggling Business Owner Saved His Bakery With One Trading Pattern
3 Ways to Give Yourself the Best Chance to Win
During last week’s Trading Challenge webinar, I took a trade where almost everything went wrong…
- I was suffering from sleep deprivation from traveling.
- The time zone was a tough one for trading the U.S. markets.
- My entry was terrible.
- I got a bad exit.
- The overall market was terrible due to the Russia-Ukraine war.
- Also, I had brokerage issues. I actually had to stop the webinar and log in to my trading account online to see how many shares I had and at what price.
- I totally underestimated the upside potential…
- And I mistraded it.
In the face of every obstacle, I locked in 11.5% and $720 on my Elektros Inc (OTCPK: ELEK) trade.
How? By giving myself the best chance to win. Here are three ways…
3 Top Penny Stock Trading Lessons
Each of these lessons is an example of overcoming obstacles by focusing on the right things. That’s how you give yourself the best chance to win.
Penny Stock Trading Lesson #1: Focus on the Right Pattern
From the outside, trading penny stocks looks like sheer madness. From the inside, the ELEK trade looked nice. But it only works if you focus on the right patterns.
Check out the March 2 ELEK chart…
As you can see, ELEK had a big morning spike. Then it consolidated and had a nice breakout during power hour.
For the sake of this lesson, focus on the morning spike. There’s no question it was a morning spike with clean price action. A lot of people in chat focused on cybersecurity play CYREN Ltd. (NASDAQ: CYRN). Compare the ELEK chart above to the CYRN chart below…
CYRN had a big premarket spike before dipping back to the green/red level. But after it double-topped, it dropped and traded sideways. It would have been difficult for me to trade this. The price action was too choppy.
Penny Stock Trading Lesson #2: Use the Right Strategy
Before I explain the strategy, check out the ELEK six-month chart…
Based on the Sykes Sliding Scale, ELEK had several things going for it…
- ELEK is a former runner. Look at how much it spiked last November on the chart above.
- It had a strong news catalyst. The company announced production’s underway for its Elektros Sonic vehicle.
- When I traded the morning spike, it was already the highest daily volume since November. By the end of the session, ELEK logged its highest ever volume.
- Even though I didn’t get a great entry, it was already a big percent gainer.
What’s the strategy?
Look for former runners with news, big volume, and clean price action. Then, be happy to take a single. There are a lot of bag holders left from the November spike. So even though the news was excellent, I didn’t hold and hope.
Trade the price action, take the single, and move on to the next. If that’s difficult, it might be the #1 thing you’re doing wrong.
Penny Stock Trading Lesson #3: Let the Best Plays Come to You
I prepared to NOT trade that day. Why? Because I was tired and trading from a bad time zone. Not to mention E-Trade has been giving me issues lately.
But when there’s a gimme like ELEK, I’m forced to come out of retirement.
Out of all the plays in the market, when I was barely awake, I pulled off a win on the biggest percent gainer and made $720. That’s because of experience.
Like I always say, you don’t have to trade. Instead, let the best plays come to you.
More Top Penny Stock Trading Lessons
Every week I give a Trading Challenge webinar. They alternate between Q&A sessions and live-trading webinars.
Over time, lessons from webinars compound to grow your knowledge account. Come with questions and work to get better at trading penny stocks under $1.
5 More Penny Stock Trading Lessons
Miss the webinar? Trading Challenge students can watch the replay here. Here’s a taste of what you’ll learn when you watch the replay…
- How to find confidence as a trader. (It’s so simple, most people don’t believe it until they do it.)
- The truth about why I started teaching. (And how students like you help me avoid becoming a degenerate trader.)
- Think you need to subscribe to the “healthy body, healthy mind” theory to be a successful trader? Think again! Watch the replay to see why I think that’s BS.
- 3 key indicators for panic dip buys besides percent drop. (And why HOOK had better odds as a short than a dip buy on March 2.)
- My “no guilt” approach to trading weak bounces. (This might surprise you…)
There were at least two dozen more questions and trading lessons during the webinar. I can’t encourage you enough to watch the replay. Then, show up every week with solid questions.
Ready to take your trading to the next level? To access the live webinars and hundreds of archived webinars…
Take the Trading Challenge
Live webinars separate the Trading Challenge from our stand-alone products and newsletters. Every week there are two to four live webinars from mentors like Tim Lento, Mark Croock, Matt Monaco, and me.
Want more penny stock lessons from Trading Challenge webinars? Comment below, I love to hear from all my readers!
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