One of my all time favorite patterns is the bull flag pattern. It is super easy pattern to spot and it has a defined risk point where you know exactly when you are wrong on the trade and it is time to get out.
You want to see the stock run higher and then have a light volume pullback, usually to the 10 or 20 day moving average on the 1 or 5-minute chart, where it will find support and buyers will jump back in to take it higher.
The key to trading this pattern is waiting for volume to pick back up as buyer’s pile in and then jumping in with them.
My other favorite pattern is a flat top breakout over premarket highs. Shorts will put stop orders in just above highs so I know if it breaks above it we will see their buy stop orders trigger which will help push shares higher.
This pattern isn’t as easy to define risk so you can go about it a couple different ways. You can use the low of the candle that breaks out above the premarket highs OR you can use a set amount to risk like 20 cents for example.
Are you a Penny Stock Day Trader or a Penny Stock Investor?
In my experience penny stocks are so volatile, unpredictable, and subject to market manipulation, that being an investor is nearly impossible.
You need to have a short term outlook in order to survive, and you need to be one of the first traders to get in and the first traders to get out with profit.
Remember that a penny stock company can have a horrible balance sheet, awful fundamentals, and then spike up 200% on breaking news of a new partnership.
For this reason, shorting penny stocks expecting the companies will go bankrupt is extremely risky. The fundamentals will matter eventually, but in the meantime, most investors can’t handle holding a position down 200%. I’m a penny stock day trader.
This means I follow a few very specific rules about how to pick stocks and how to trade them.
Day Trading Penny Stocks at this point is like riding a bike for me. As this point, I can make $100k in 3 months without breaking a sweat, but remember it took me years to get to this point.
One of my favorite things is working with beginner traders in our Day Trading Courses because I know what it’s like to be brand new to the market!
The reason working with beginner traders is so much fun is because I remember what it was like to be a beginner trader.
I consider myself to be no different from beginner traders, the only difference is that I’m a little further down the road to success and I can look back at where you are today and know what it takes to get you to where I am today.
