The S&P was down again today…
So was the NASDAQ…
I hope you know what I’m going to say…
Who cares!
The day trades keep on coming, and I welcome them with open arms.
The beauty of penny stocks is that they trade independently of the broad market. The broad market is for retirement accounts.
Pennies are here to build your daily gains so you can come back tomorrow and play again.
See every one of these setups each morning during my Pre-Market Prep.
I’ll walk you through every pattern and answer your questions.
I don’t want you to miss out on a setup like I saw yesterday morning.
It was a chef’s kiss trade…
Table of Contents
The Red Candle Theory Setup (RCT)
You’ve probably heard me talk about the RCT many times, and for good reason…
It’s repeatable, high-probability, teachable, and best of all? It shows up almost every single trading day.
The RCT is everything we look for in a day trade setup.
ICCT Yesterday Morning
Yesterday morning, iCoreConnect Inc. (NASDAQ: ICCT) demonstrated a textbook example of the RCT pattern.
ICCT went vertical in premarket, from about $0.30 to $0.83 per share.
But then it stalled right at $0.80 when it put in a red candle. It then pulled back to around $0.73.
But I wasn’t worried. Why?
That red 5-minute candle is the setup, the pattern, and exactly what we wait for.
How It Played Out
When ICCT hit that red candle at $0.80 by $0.73, it handed us our trade instructions:
- Entry: $0.80 per share
- Stop: $0.73
And then we waited…until right around 10:30 am.
That’s when it broke back above $0.80 and never dropped below it again…all the way into the end of the day, reaching a high of $2.73.
That’s a gain of around 240%*!
Take a look at the action…
ICCT Intraday, One-Minute Candles Chart; SteadyTrade
You didn’t need to chase. You didn’t need to guess. You just had to be patient and trust the setup.
This is why I love the RCT. It forces you to pump the brakes and use discipline in your trading.
And it can pay off!
Why the RCT Pattern Matters
The RCT is not about chasing. You know how I feel about that…
If you’re jumping into a stock just because it’s going vertical, you’re not trading, you’re gambling.
The RCT pattern forces you to slow down. To wait. To let the trade come to you. That’s what real traders do.
You don’t buy the rip. You wait for that first red 5-minute candle after a big move.
Then you use the high and low of that candle to build your trade plan. It gives you everything you need: entry, risk, the whole thing.
The Key Ingredients of the RCT Pattern
Here’s what to look for:
- Low float stock
- Big volume spike (way above the 60-day average)
- Ideally, at least a 50% move in premarket
- Obvious vertical price action
- Pullback into a red 5-minute candle
And tomorrow? You’ll probably see five stocks that fit this criteria. Seriously. RCT shows up every day.
Wanna spot those five tomorrow?
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My top pick is StocksToTrade. It has everything you need to stay ahead of the game.
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My Final Thoughts…
Why does this pattern work so well?
Because it forces discipline.
You’re not buying hype. You’re not guessing. You’re waiting for the setup to prove itself.
The market rewards patience and punishes impulsiveness.
This pattern trains you to think like a pro and to trade like one.
Have a great day, everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade
P.S.
If Monday is a day you dread, like most people (not me, I can’t wait to get to trading again!), maybe I can help.
Get my Money Monday setups in your inbox every week.
These are trades that only show up on that day, and they can move fast!
We’re talking about the kind of move that can deliver more in one morning than most people see in a month, or even a year.
With Money Monday, you’ll also get an average of three hand-picked stock trades per month, a one-year membership to StocksToTrade Advisory, my Pre-Market Fast Break Video three times a week, and much more…