The Russell 2000 index led the pack when it came to market losses yesterday…
The index was down as much as 1.8% and that took a bit of wind out of small-cap sails.
And this isn’t the first downturn or big red day we’ve seen lately…
So I want to share a few tips to help you navigate days when the market sells off.
These can help you focus on the best potential plays and hopefully avoid sub-par setups.
So if you get caught up trying to force trades when they’re not ideal, step back and review these five tips…
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Red market days don’t always mean there aren’t trade opportunities…
Even with yesterday’s big sell off, ShiftPixy, Inc. (NASDAQ: PIXY) still gained 150%.
PIXY chart: 1-day, 5-minute candle — courtesy of StocksToTrade.com
But I wouldn’t call it a box checker — it had no exciting news catalyst and it wasn’t a big morning gainer.
If you’re an experienced and aggressive trader, you could maybe catch a winning trade.
But as a mentor who likes to help you build consistency and focus on repeatable strategies, I always stick to the same lessons.
So instead of trading random spiking stocks, create a process and follow it. These tips can help you stay on track…
1. Learn from History
The first lesson I want to share with you is the power of history.
If the market had a rough day yesterday, and you’re wondering what to do today — go look back at what worked in the past.
History doesn’t repeat, but it often rhymes…
What’s happening in the news that’s moving stocks? Is it biotechs with news?
Or is there a macro theme and sector you can focus on like COVID stocks during 2020 and 2021, or artificial intelligence stocks earlier this year?
You can also focus on recent multi-day runners.
Even during red days, you can see penny stocks have huge runs due to short squeezes.
Yesterday my focus was Femasys Inc. (NASDAQ: FEMY). It was the single best stock in the market over the last week.
So like I said in Pre-Market Prep, “When you have a multi-day textbook short squeeze, why focus on anything else?”
It had a quick morning spike and it still looks like some shorts might be trapped since it held up…
FEMY chart: 1-day, 5-minute candle — courtesy of StocksToTrade.com
The next thing to remember on red market days is…
2. The Power of Repetition
Now, let’s talk about consistency…
The key to mastering the stock market is showing up every day.
Even if you’re a part-time trader who can’t trade every day, you can still be a student of the game…
Check-in with the market daily, take notes, and review your own trades.
You don’t have to place any trades to become 1% every day.
If you don’t see a great setup, pat yourself on the back for having discipline and avoiding trades that can be devastating to your account.
3. Start Small and Learn
Here’s a critical point — start small and focus on learning.
You don’t need to trade huge positions to make progress.
Becoming a successful trader is about mastering a repeatable setup and gradually scaling up as you gain experience.
And if you’re a new trader with a small account and limited experience, a red market day probably isn’t the best time to size up and try a new strategy.
Focus on what’s working best for you while considering any current market conditions.
5 Top Stock Trading Lessons for Beginners 📈💡@timothysykes pic.twitter.com/m3SS2NtKAV
— StocksToTrade (@StocksToTrade) October 2, 2023
4. Ignore the Fear-Mongering
Lastly, don’t fall for the fear-mongering.
Sometimes, the media and certain traders love to hype up potential market crashes.
But one or two red days don’t make a market crash. Stay focused on your strategies, trade the right stocks, and ignore the noise.
In a nutshell, navigating a market downturn isn’t as complicated as it might seem.
Learn from history, focus on staying consistent, start small, and stay focused on your goals.
How I Can Help
I genuinely believe in you, and I want to see you succeed — I’m not here to engage in fear-mongering or make empty promises.
I show up every day to equip you with the tools you need to spot opportunities and give you lessons to help you reach your trading goals.
If you want to join me — check out a Daily Income Trader system live training session.
Let’s navigate the markets together and…
👉 Review the hottest plays.
👉 Build a watchlist.
👉 Make Trading plans.
Don’t miss out on this opportunity to learn and grow as a trader.
I’ll see you there.
Have a great day everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade