Wow, we’ve had so many day trade setups lately.
This is nothing new. We’ve been seeing this for months.
But it’s particularly helpful right now as the headlines create chaos, and the broad market is never sure how to react.
Yes, we’ve fully recovered since Trump’s April tariff announcements, but the indices have chopped around since then.
We’re not out of the woods just yet…
Penny stocks and day trades are our safe haven, away from the noise of the media and the markets.
This segment is also a hotbed of big winners.
A specific high-quality trade setup has been showing up exclusively during one part of the week…
I’ve discovered that Monday mornings present a unique pattern that doesn’t exist at any other time.
This Monday setup has brought 100%+ gains…in just one day!*
I’ve studied and perfected this trade, and now I want to share it with you.
Learn it for yourself in my video tutorial below:
Penny stocks are particularly valuable right now, but I love them in any market environment.
Now don’t get me wrong… I love a good swing trade, and I’m all about building long-term wealth, but penny stocks?
That’s my first love.
Why?
Because you won’t find this kind of risk-to-reward potential in large caps, ETFs, or long-term holds.
And quite simply, I love the thrill of trading these volatile, fast movers. The price action can be game-changing…
And speaking of game-changing, Nvidia’s CEO, Jensen Huang, is about to trigger an event that could be just that…
Everything could be different after this.
Fortunately, my colleague and legendary trader, Tim Sykes, has a handle on it and knows exactly what you need to do BEFORE this happens.
Find out in his video below…
Table of Contents
First of All, Penny Stocks Are for Trading, Not Investing
One of the biggest mistakes I see is traders becoming attached to low-priced stocks like an investor does with a long-term investment.
Case in point: I love Tesla Inc. (NASDAQ: TSLA). I’ve held it for several years because I believe in the company, its story, and its fundamentals…
That’s the mindset for an investment.
I didn’t buy TSLA because I saw an RCT or VWAP breakout one day, and thought, “Ah, now’s the time to buy! Who cares if the company isn’t around next week?”…
Now, that’s the mindset for penny stock trading.
Penny stocks are short-term plays, not long-term investments.
Volatility is the name of the game, but it’s a double-edged sword.
Yes, you can see explosive gains in a matter of hours or days…
But it can go south just as fast if you’re not careful.
What Exactly Is a Penny Stock?
It sounds like an easy answer, but it’s not as straightforward as it seems…
Technically, it’s any stock trading under $5.
When people hear “penny stock,” they think it has to be under $1, or literally pennies, but nope. Anything $5 or under qualifies.
And while they may be small in price, they pack a punch in volatility.
That’s what makes them perfect for day traders.
Just don’t confuse that potential for long-term promise. Almost all penny stocks eventually fall back to earth.
Sometimes they fade after huge runs, but nearly all go bust.
Master Technical Analysis
Penny stock trading success lives and dies by your ability to understand technical analysis.
Technical analysis isn’t impossible. It just takes practice and repetition.
You need to train your eyes to recognize patterns. At first, it might feel like trying to read a foreign language. But with enough education and exposure, those setups jump off the chart.
Learn more about technical analysis in my blog post.
To successfully day trade using technical indicators, you need a platform like StocksToTrade.
With STT, you can chart your stocks, apply your indicators, and see the catalysts and price movement in real-time.
The StocksToTrade platform is packed with tools to scan, research, chart, and track the movers you need to be watching in real-time.
And right now, you can get two weeks of both the STT platform and our Breaking News Chat service for $17.
Grab your 14-day StocksToTrade + Breaking News Chat trial today for only $17.
Always Be Skeptical
Most of these companies are hanging on by a thread.
Yes, there are rare diamonds in the rough. But they are very rare.
Treat everything as a day trade or short-term play that might not be around next week.
Have a Trade Plan
This goes for every kind of trade you make.
Your plan should include:
- Entry and exit points
- A stop loss that you set before you hit “buy”
- A profit goal
- And what I call a “boredom contingency”. If the trade’s done nothing all afternoon, and especially if it’s not closing strong, it’s time to exit.
Set your stop-loss and stick to it.
These are volatile stocks, so protect your capital like your trading career depends on it… because it actually does.
Leverage Oracle
Want an edge?
Meet Oracle, our proprietary algorithm inside StocksToTrade that does a lot of the heavy lifting.
It scans the market, highlights high-potential trades, and gives you actionable ideas with entry prices and stop loss levels.
Oracle is the tool I use every single day, and I couldn’t trade without it.
See Oracle in action during one of our free daily webinars.
My Final Thoughts…
Trading penny stocks isn’t about luck. It’s about being prepared, staying skeptical, and managing risk.
With the right tools, education, and mindset, trading penny stocks offers some of the fastest, cleanest opportunities in the market.
The ones who thrive in this game are constantly learning, constantly adapting, and they never show up without a plan.
Have a great day, everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade
P.S.
- To learn more about technical analysis, check out my post on support and resistance levels.
- The Red Candle Theory (RCT) pattern is perfect for penny stocks and day trading.
- And so is the Morning Fader pattern…