Happy Monday!
I hope everyone is enjoying the long Memorial Day holiday weekend…
The market is closed today but we’re back at it tomorrow, in the midst of what I’m calling the arrival of the “Penny Stock Summer of Love.”
To learn everything you want to know about penny stocks, read my article.
I talked a lot about true penny stocks in my Premarket Prep webcast on Friday, specifically which trades have been working and which have not.
By the way, I do a live Premarket Prep session every single trading day. This webcast is part of my Daily Income Trader service…
As a subscriber you also get four other daily webinars, access to our proprietary trading tools, and much more…
Check out Daily Income Trader here to see if it’s a good fit for you.
I also talked about what doesn’t work in penny stock trading, which is just as important as knowing what does work.
An example of what doesn’t work is a stock that spikes and fades on a “text pump.” As I said in my webcast, this type of stock promotion works about 5% of the time.
The price action I described above happened Friday morning with a low-priced health and wellness company.
Friday morning during my Premarket Prep webcast, I talked about a stock that disappointed after a text pump.
First of all, you ask, what is a text pump?
A text pump is a stock push that happens on a social media platform like Telegram or Discord…
And it is made up of “traders” that aren’t very knowledgeable about the company or trading, in general.
Most of what you hear can’t be trusted.
Better Choice Company Inc. (NYSE: BTTR) is an example of a penny stock that succumbed to text pump mania…
Take a look at what happened on Friday after it was pushed up early in the morning.
BTTR Intraday Chart; 1-Minute Candles; Steady Trade
It just deflated like a crappy air mattress.
By the way, I usually don’t like to toot my horn, but I predicted this would happen in my Premarket Prep.
And I knew it because I know what usually happens with text pumps.
And a lot of chat rooms are no different…
They usually have more participants but the level of reliability is still murky.
Read this article to learn more about chat rooms.
Now not all chat rooms are bad…
Daily Income Trader includes access to BreakingNews Chat (BNC).
A whole team of ex-Wall Street traders with 20+ years (each) of experience run this service to give you fast, actionable, tradeable ideas.
We’ve vetted every single one of them so you can be sure you’re getting the best information out there.
Read my recent blog post which gives example after example of winning trades that resulted from BNC alerts.
Besides text pumps and false information, penny stock traders can fall victim to the belief that these stocks will always continue to pop after a price breakout…
But this is not true.
Buying breakouts with volume does work. Buying breakouts with low volume DOES NOT work.
I talk about that in more depth, as well as the penny stocks that have been on fire recently in Friday’s Premarket Prep.
If you’re interested in getting my take on the upcoming trading day, four other daily webinars, access to our proprietary tools, including BreakingNews Chat, and a bunch more cool stuff, you must be a subscriber to Daily Income Trader.
Watch this presentation to learn more about it.
Have a wonderful Memorial Day weekend and I’ll see you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade