It’s that time again … welcome to the latest edition of Bohen’s Take.
This week, I’ll take you through an awesome trade setup that was helped along by President Donald J. Trump.
I’ll share some insight on how to be a better trader straight from possibly the hardest man on the planet.
You’ll also learn how to master your trading strategy without risking a cent.
(Want even more? Subscribe to our SteadyTrade YouTube channel now!)
Let’s dive right in!
Table of Contents
What’s the Haps?
I hope you’re enjoying these springtime markets. They may be a bit challenging … but definitely interesting.
We’ve seen a ton of volatility thanks to the tariffs and the trade war with China. Who knows how it’ll all end — things are looking brighter. Let’s hope for the best.
We also just saw the Uber IPO. Talk about disappointing for anyone except the early-stage investors.
I’ve been busy with the markets, doing a bunch of outdoor work, and educating traders. In fact, if you missed it, I recently ran a great webinar on the ins and outs of using Level 2 quotes.
Level 2 Stock Quotes can give you insight into price action. It’s where you see a stock’s bids, offers, and trading volume.
Trading using level 2 quotes can be a huge benefit for day traders … But you can still use them even if you’re a swing or position trader to help optimize your orders and gain more insight into market dynamics.
So, if you were on the live webinar, I hope you enjoyed it (say hi in the comments below!), but if you missed it, check out the webinar replay here.
My Most Exciting Trade Setup
It’s often hard for me to pick the most interesting setup of the prior week … There’s usually at least a handful of stocks that had a great setup, a great story, or something really interesting going on.
But this week the choice is easy.
On just one little Nasdaq stock, we have all of the following to get the stock price moving:
- An electric vehicle play
- A stellar trade setup
- Wild price action
- An exciting rumor
- And even a tweet from the president
Almost sounds like something you’d see in an episode of “Billions.”
If you follow Trump’s Twitter feed, you may already know which stock I’m talking about…
It’s Workhorse Group Inc (NASDAQ: WKHS), an electric pick-up truck manufacturer based in Cincinnati, Ohio. This company is tiny — around a $130 million market cap at current prices.
The electric-vehicle space is undoubtedly a hot sector, but WKHS is definitely not an ace in the industry. There really hasn’t been much to draw attention to the company…
Until Wednesday, May 8…
That’s when General Motors confirmed it was planning to sell its unused manufacturing plant in Lordstown, Ohio to the Workhorse Group. That alone could get the market excited, but that’s not where the story ends.
Later that morning, the floodgates opened for WKHS when President Trump tweeted about the sale of the plant to WKHS as great news for Ohio. Nearly every trader wanted a piece after that tweet.
Workhorse Group Inc (NASDAQ:WKHS) with its massive price spike (Source: StocksToTrade.com)
So let’s check it out: WKHS opened that day at 84 cents. Before the market close, the stock gained over 200%, trading at $2.65. The stock continued to rocket up the next day, opening up at over $3.
But just as with almost any small-cap stock frenzy, the party came to an end. The stock collapsed to $2.05 on the day, before drifting down to the current levels of around $1.80.
What an interesting little stock market adventure, right? A presidential tweet causing somewhat of a pump and dump, pushing a stock up and down hundreds of a percent…
That’s the story, so let’s look at the chart setup and an example of how you could’ve played it.
On the day of the tweet, May 8, we saw an awesome example of a trade setup we call the VWAP Hold High-of-the-Day Break.
That’s where we see the stock consistently hold above the VWAP indicator, then break above the high of the day on high volume. This setup signals that the stock is being heavily bid up. There’s a lot of interest that could send the price of the stock higher very soon.
That’s exactly what we saw when the price started to rocket up after 2:30 p.m. on the day. Beautiful market situation, beautiful trade setup. One to always look out for.
Want to learn more about these kinds of simple yet powerful trading setups? I invite you to join me in StocksToTrade Pro.
StocksToTrade Pro is our elite trading community where you can learn to up your market strategies and know-how. You’ll have access to group chats, advanced learning webinars, and my twice daily market updates.
I want to help you be a smart, knowledgeable, and thoughtful trader. I’ll show the exact stocks I’m watching before each trading session and share my thoughts about the market action. You can also interact with other traders on the same journey as you in our live chatroom.
StocksToTrade Feature of the Week
Does the WKHS trade make you want to jump into the exciting and volatile world of penny stock trading?
Trading volatile stocks can be an enticing and potentially lucrative endeavor, definitely more demanding and fun than trading the snoozy blue chips.
But you can’t just dive in. You need a solid trading plan. And if you’re not 100% confident in your trading abilities, you need to practice. And yeah, you can practice without risking a penny.
That brings me to the StocksToTrade feature of the week: paper trading.
Paper trading means going through all the motions of a trade but without actual money. You determine your stop-loss, entry point, and exit point. Then you watch the market action as the trade plays out.
You can paper trader for as long as you need until you’re ready to enter the market and lay your money on the line. Think of how much practice athletes get before games. And even once they start a season, they still have to practice.
The markets can change, and you might need to tweak your strategies. And it’s perfectly reasonable to want to practice to get comfortable with anything new or different. So … how do you paper trade?
Back in the old days, you’d have to use a pen and paper and to track every ticker, entry, and exit. You’d have to meticulously keep track of everything, like if your stop loss price had been hit. It was tedious and most traders were too lazy to do it right.
Thankfully, with a platform like StocksToTrade, with a few mouse clicks, you can quickly start building and tracking your paper trading account. StocksToTrade makes it super easy to paper trade. You can access watchlists, news feeds, and charts. You click the exact same buttons as if you were live trading.
Check it out for yourself. Learn how to trade through different stock market conditions, test new trading strategies without risking a cent, and more — all with the StocksToTrade paper trading feature. Grab a 14-day trial for just $7 now!
What Am I Reading Right Now?
Right now, I’m reading a book that has absolutely nothing to do with trading and finance, but also kinda has everything to do with trading and finance.
In fact, this is the second time I’m reading the book. And I love it so much that I have notes and bookmarks throughout.
The book is “Can’t Hurt Me” by an absolute beast of a man, David Goggins. Goggins likes to call himself the hardest man on the planet, and he’s lived one crazy life.
He lost 100 pounds in a number of months. He got accepted in Navy Seal training and went through the training three times for various reasons. And he’s into some crazy endurance running. That’s just a taste of his life and adventures. He’s absolutely tough as nails.
What I love about Goggins’ story and mentality is that no matter how hard his situation, he always keeps his eye on the prize. And he seems to appreciate the hardships he endured while pursuing his goals.
It’s this mentality — and this ability to overcome obstacles — that can be relevant to traders’ challenges, especially newbies.
The key takeaway here: Never give up on your goals. Keep moving forward.
The Wrap
That’s it for now…
As I always say, remember to keep your life as balanced as possible as a trader. Remember to exercise, eat well, spend time with your family and friends. Go outside. It all adds up and can help you prepare to face the market.
I hope you enjoyed seeing how a tweet can move a stock, especially when it’s the president. It’s no surprise that a lot of traders I know follow Trump’s tweets.
The WKHS trade was one heck of an exciting trade when it all came together.
With StocksToTrade Pro, I’m in the chatroom with other traders, and we all share ideas as we scan for trades like this each and every trading session. You don’t have to be a lonely, isolated trader … join StocksToTrade Pro and be a part of the action!