Wow, last week was full of trading opportunities around every corner…
It’s kind of amazing after the prior week’s global market meltdown!
Low float plays, short squeezes, spikes on news… You name it, they were all there for the picking!
And all of our trading tools at StockstoTrade were there to deliver the signals we needed to capture those big gains waiting to happen…
Oracle and Breaking News Chat worked overtime last week.
And XGPT had its own share of winners both last week and the week before.
It sent an email alert to subscribers in the afternoon of Wednesday, August 6th. The alert instructed them to buy shares of Tenax Therapeutics Inc. (NASDAQ: TENX) at $3.80 per share.
TENX hit the entry price later that evening, and by noon the next day, it was at $4.49. That was an 18%* gain in about nine trading hours, including after-hours and premarket. Not too shabby!
And there were some even bigger returns from XGPT last week…
In the world of stock trading, it’s easy to get caught up in charts, numbers, and data.
And don’t get me wrong, that stuff is extremely important and I use it every day.
But behind every stock price move, there’s a much more complex force at play: human psychology. Leveraging the psychological drivers behind market movements can really up the odds of trading success.
This is where the power of our tool XGPT comes in…
If you’re unfamiliar with XGPT, let me give you a rundown of its history and how it works.
My mentor, Tim Sykes, developed XGPT, a proprietary trading system that leverages AI to track stock patterns and craft strategies for those stocks.
It all started way back in his college days when he developed his 7-Step Trading Framework, which he’s been using ever since.
This framework is built around human emotions like fear and greed because Tim discovered that human psychology aligns perfectly with stock movements.
Enter the era of Artificial Intelligence…
Tim recognized that AI was the ideal tool for capturing these stock patterns and creating trading plans to profit from them.
The result was the birth of XGPT, which can be used in two powerful ways:
Use #1: Every trading day at 3:15 pm Eastern, XGPT sends out a watchlist of stocks it sees as most likely to spike, along with an expected trading pattern.
It provides a probability of success, like 70% or 80%, along with a potential buy signal, a potential sell target if things go well, and a stop loss level if they don’t.
Use #2: At any time, a trader can log onto the XGPT platform and enter the ticker symbol of a stock they’re watching.
XGPT will then generate a potential trade plan and determine the probability of success.
It’s pretty cool and produces a response much like ChatGPT answers a question.
Now that you’re more familiar with the foundations of XGPT, let’s dig into how psychology affects stock price movements. This knowledge can help you become more successful in your trading strategies.
Table of Contents
Fear and Greed: The Basic Principles of Market Behavior.
If there’s one thing every trader learns quickly, it’s that fear and greed are the two primary factors driving the stock market. These emotions aren’t abstract concepts.
Greed pushes traders to take risks, often chasing after that next big win. It’s what creates the meteoric rise of stocks beyond their fundamental value. Just think of the Dot.com bubble in the late 90’s.
When a stock starts climbing, more and more people pile in, driven by the fear of missing out (FOMO). This can lead to traders buying into hype rather than solid fundamentals.
Fear, on the other hand, can be equally destructive. When bad news hits or when a stock begins to tumble, panic sets in. Fear of loss can lead to mass sell-offs, even when the long-term outlook remains positive.
This herd mentality is why you’ll often see sharp declines in a market when everyone’s trying to get out of a stock at the same time. That behavior only increases the momentum of the selloff.
Confirmation Bias Can Be Dangerous
Another psychological factor at play is confirmation bias. As traders, we naturally seek out information that supports our existing beliefs.
If you’re bullish on a stock, you’re more likely to focus on news and analysis that confirms your positive outlook, while dismissing or downplaying negative reports. This can lead to holding onto losing positions for too long or doubling down on bad trades.
Confirmation bias also feeds into market trends. When most traders believe a stock will perform well, they collectively drive up the price, reinforcing the belief that it’s a good buy—even if the stock is fundamentally total garbage.
Overconfidence: The Achilles Heel of Trading
Overconfidence can trip up even the most experienced traders. When you’re riding high on a series of successful trades, it’s easy to start thinking you’re a superhero and you’ve got the market all figured out.
Then you end up overtrading, taking on too much risk, or ignoring warning signs that a reversal might be on the horizon.
Remember, the market doesn’t care about your track record—it only responds to what’s happening right here and now. You have to stay humble and grounded in the face of a much more powerful force.
How to Manage These Psychological Influences?
Emotional discipline. Successful traders develop strategies to keep their emotions in check.
This might mean setting strict stop-loss orders, sticking to a well-thought-out trading plan, or simply sitting on your hands so you don’t trade when your judgment is clouded.
All of the concepts above—fear, greed, overconfidence, and confirmation bias, form the basis of the XGPT system.
Let’s take a look at some more XGPT winners from last week:
On Monday, August 12th, XGPT sent an alert on Greenlane Holdings Inc. (NASDAQ: GNLN). Here are the details:
Entry: $16 per share; hit on August 12th.
High: $21.50; hit on August 12th.
Return: 34.38%*
GNLN 5-Da, 5-Day Candles Chart; SteadyTrade
Last Wednesday, August 14th, alert on GeoVax Labs (NASDAQ: GOVX):
Entry: $3.15 per share; hit on August 14th
High: $7.73; hit on August 16th
Return: 145.39%*
And last Thursday, August 15th, alert on CING:
Entry: $5.10 per share; hit on August 14th
High: $20.83; hit on August 16th
Return: 308.43%*
These are just a few examples of how XGPT finds big winners.
Have a great day, everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade
P.S.
If you love the excitement of day trading, you might consider adding options trading to your playbook…
My colleague and seasoned options trader, Jeff Zaniniri, has developed an AI-powered algorithm called GAMMA that exploits a market inefficiency, or glitch, within certain options contracts.
These glitches trigger alerts in his system, which Jeff will share with his GAMMA subscribers every Monday, Wednesday, and Friday.
Learn about the glitch that can make you a master options trader!