Lots of traders are looking to bottom feed right now…
They think these large-cap earnings losers are a good time to dip buy.
While I don’t disagree with dip buying ‘real’ stocks, some of these companies have more problems than others…
And they’re all down for a reason.
So today I’ll share my approach and what you should look for before you dip buy…
And I’ll show you an even better way to grow your account faster.
Plus, I have a ton of bonuses for you when you apply for priority access to join the SteadyTrade Team!
My Approach to Dip Buys
You might look at this chart of Amazon.com, Inc. (NASDAQ: AMZN) and think it looks like a morning panic dip buy…
AMZN chart: 1-day, 2-minute candle — courtesy of StocksToTrade.com
But you’d be wrong.
This isn’t a manipulated OTC that follows a pattern for a reason.
It’s a large-cap company that’s an earnings loser.
It doesn’t have to bounce. It has a huge float, and there are smarter and richer traders in it than you.
It can continue lower for weeks. And it’s susceptible to reactions to macro news and trends.
Meta Platforms, Inc. (NASDAQ: META) is in the same boat. Plus, it has bigger problems than just its earnings.
As I mentioned earlier this week, Mark Zuckerburg is going too big into the metaverse. It doesn’t even exist yet. And while I agree it might be huge one day — investors don’t want to wait years for a return while the company bleeds money.
So here’s what I’d like to see in these large-cap stocks before jumping in to buy the dip.
What to Look For Before Buying the Dip
Large-cap earnings losers could continue to go down for weeks, or they could chop around and consolidate before going lower or higher.
We have a lot of news and an upcoming election that could also impact the markets and the stocks that move with it.
So here’s what I think traders should look for before getting in too early…
I want to see these beaten-down stocks trade sideways for weeks — not days.
I’d like them to put in a nice base to use as a risk level. Then once they break out of consolidation to the upside, you can look for an entry and risk the consolidation area lows.
Base your plan on 2:1 or 3:1 risk to reward for a swing trade idea.
But there’s a faster way to grow your account…
Grow Your Account Faster
While investors are down huge in these big names, day trading has continued to rock and roll.
And while you’re looking at earnings losers and hoping to make 10% in a few days or weeks on a swing trade…
You can day trade penny stocks for close to 50% gains in less than an hour!
That’s the move Sonnet BioTherapeutics Holdings, Inc. (NASDAQ: SONN) made yesterday morning.
You could’ve traded the dip and rip and made almost $1 per share on your trade if you entered when the stock broke $2.10 and sold into the push to $3.
The morning move was the complete opposite of the one you just saw in AMZN on the same day.
SONN chart: 1-day, 1-minute candle — courtesy of StocksToTrade.com
This is why I think the best approach to growing a small account is to focus on penny stock patterns that repeat.
I go over them every morning in the SteadyTrade Team…
And right now you get a ton of bonuses when you apply to join here!
See you there tomorrow!
Have a great day everyone.
Tim Bohen
Lead Trainer, StocksToTrade