I want to clear something up right off the bat: you need to get this “bear market crash” nonsense out of your head…
Yes, the major indexes have been pulling back, and many stocks are down significantly from their highs.
But trust me, this is not the end of the stock market.
As a swing trader and day trader for over 15 years, I’ve seen this all before…
Political uncertainty, overnight market gaps, and free-falling tech stocks have made long-term holding tough in this environment…
But the same factors have made this a day trader’s paradise. The volatility in this market is leading to exaggerated price swings, giving traders more opportunities to profit.
So, if anyone in your circle is filling your mind with doom and gloom about this market, it’s time to stop listening to them.
Let me show you why this market correction is a great thing for short-term traders…
How to Find Big Gainers in This Market
This market environment reminds me of when I started day trading back in 2006-2008 during the financial crisis.
Banks were failing, housing prices were collapsing, and the market was in the dumps. It was nothing but fear, uncertainty, and doubt on the financial news networks.
Many traders thought the market was too scary to trade. The volatility shook them out.
But I found quick profitability trading penny stocks, cornering a niche that others were sleeping on.
Now, I’m seeing similar opportunities in today’s market environment. If you think there are no great trades out there … think again.
Recently, we’ve had some big gainers like Indonesia Energy Corp Ltd. (NYSEARCA: INDO), Aditxt Inc. (NASDAQ: ADTX), Lumen Technologies Inc. (NASDAQ: LUMN), and Upstart Holdings Inc. (NASDAQ: UPST).
Earnings season + elevated market volatility = the potential for outsized moves.
This Wednesday, UPST skyrocketed 48% in a single day. On that same day, LUMN surged 38%. Both of these were post-earnings moves.
Meanwhile, INDO is up 30%+ in five days:
INDO chart: 5-day, 5-minute candle — courtesy of StocksToTrade.com
And ADTX soared 48% on Wednesday:
ADTX chart: 2-day, 5-minute candle — courtesy of StocksToTrade.com
This shows the power of day trading and why we focus on these stocks during periods of heightened volatility.
Join me in Pre-Market Prep to start finding these moves before they happen.
From there, look for these three things:
Micro Cap Stocks
Smaller market cap stocks are often overlooked, but they have great potential for large price movements.
These stocks usually have market capitalizations under $300 million and can experience dramatic gains because of their size.
When traders notice these smaller companies, even a small amount of buying can lead to big price spikes.
This happens because the market cap is tiny. $10 million inflowing to a $100 million market cap stock has a much larger effect than $10 million inflowing to a $100 billion stock.
Plus, there are fewer shares available for trading, making it easier for the price to go up fast…
Low-Float Stocks
The “float” of a stock means the number of shares available for public trading. The smaller the float, the more explosive the stock’s movements can be.
Low-float stocks have a limited supply of shares, which can lead to high volatility when demand increases.
These stocks can see huge price changes, especially when short sellers — people betting against the stock — have to buy shares to cover their positions.
This can create rapid and significant upward price movements, known as “squeezes,” increasing the potential gains for those who own the stock.
We’ve seen this time and time again with meme stocks, penny stocks, and low-float runners across the market.
Catalysts
A catalyst is any event or news that can cause a stock to move.
It can be an earnings report, a new product launch, a partnership, or even something quirky like sunglasses with Bluetooth speakers.
While some catalysts might seem silly, they can still drive significant price action. The key is that they give traders something to get excited about, creating momentum.
Traders look for stocks with new catalysts because they can lead to quick, profitable trades. Whether the catalyst is big or small, it can spark a major move in the stock’s price.
Don’t fall for the hype, ride the hype…
Recognize that people believe in these catalysts, and we can capitalize on that. For the best chance of catching these moves, you need speed.
Shorter holding times, and smaller position sizes.
Additionally, staying up-to-date on the news is crucial. Using a tool like StocksToTrade BreakingNews can save you time. It filters out the noise and gives you only actionable information.
Launch your trading with BreakingNews Chat + StocksToTrade — Get your first 2 weeks for just $7!
Focus on day trading micro caps, small floats, and catalysts to give yourself the best opportunity to profit in this market.
Have a great day everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade
P.S. Stop wasting time (and money) on losing trades. Click here now to sign up for Our FREE Wall Street-grade trading algorithm — Oracle Daily Alerts!