Every morning during my Pre-Market Prep session, I show you the trade setups I’m seeing for that day, how to trade them, and then take your questions.
If you haven’t joined me yet for Pre-Market Prep, you don’t know what you’re missing.
Tune in tomorrow at 8:30 am ET!
Often during the Q&A portion of the webinar, people ask me about certain stocks they’ve spotted themselves…
And if the pattern or setup looks good, I’ll tell them exactly what to do.
Speaking of great setups, did you know that conventional trading from the past doesn’t work anymore?
My colleague and legendary trader, Tim Sykes, knows this, and that’s why he now trades stocks that traditional Wall Street traders won’t touch.
By changing his approach, he has optimized a system that could deliver gains over short periods of time…sometimes in just 24 hours!
But these specific trading opportunities won’t last forever. The market moves in waves, and this is just one of them.
Jump on this wave before it’s too late.
Watch the video below to learn Tim’s system for yourself.
Yesterday, a trader in Pre-Market Prep asked me about trading Kindly MD Inc. (NASDAQ: KDLY), a winning ticker from Friday…
I thought it had another win left in it, but as I looked at it in pre-market, I wasn’t happy with the volume. It was really small at the time…
And if you know me, you know how much I stress the importance of volume.
Table of Contents
Watch Your Position Size in Illiquid Stocks
What I said to the trader who asked about KDLY was basically this:
“Put on a small position at first, and when the volume comes in and it starts winning, you can add to your size.”
When liquidity is low, as it was for KDLY during pre-market, traders must be cautious with position size.
And I hope that trader took my advice!
Right after the opening bell, KDLY’s volume started increasing, and the stock quickly spiked.
From the market open to the high, the stock gained over 20%*.
Take a look…
KDLY Intraday, 5-Minute Candles; SteadyTrade
Scaling Into Positions
Remember, when you size up, you’re not just increasing your profit potential, you’re also increasing your risk.
If you don’t manage that correctly, things can go south fast.
The smart way to increase your position?
Scaling in.
When it’s done right, it’s one of the most powerful ways to grow a trade without overexposing your account.
I’ve learned how to use this strategy to boost gains while still playing solid defense.
The Golden Rule: Play Defense
Let me be very clear…
I only scale into winning trades.
Why?
Because that’s how you minimize risk.
Don’t add size to a stock that’s fading or flat. Wait for volume confirmation, and only then do you look to build a bigger position.
It’s a conservative approach, yes, but it works.
And it’s perfect if you’re still finding your rhythm in the markets.
This isn’t about being aggressive. It’s about being smart.
It doesn’t matter whether you’re making $10 or $1,000 per trade…
You’re not making any progress if your losers are bigger than your winners.
Patience Is Your Edge
If there’s one thing traders struggle with, it’s FOMO. But jumping into trades at full size too early will quickly lead you to oversized losses.
So start with a small position and add to it only when it moves in your favor and proves itself with increasing volume.
And when you add, always move your stop loss up. Otherwise, you’re just exposing yourself to more risk.
To make things simpler, use “The Rule of Three.”
Let’s walk through an example:
- You’re eyeing a breakout over $1.
- Your goal is to sell at $2.
Here’s how you might build the position:
- Entry 1: Break above $1
- Addition #1: It hits $1.25
- Add #2: It hits $1.50
- Final Addition: It hits $1.75
- Sell target: $2
You’re essentially dividing your target move into four parts, and scaling into strength every step of the way.
This method allows the trade to breathe while keeping your entries aligned with the trend.
Remember, always adjust that stop loss as you go.
And never add to losers!
Don’t fix bad trades…
Cut them and move on.
How will you know when to add to your position or cut and run?
You need a great trading platform with real-time data, charting, technical indicators, alerts, and more.
My top pick is StocksToTrade. It’s what I use every single day.
The STT platform has everything you need to stay ahead of the game, all in one place.
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.
My Final Thoughts…
Scaling into winning trades is one of the best ways to maximize your gains and still keep you risk in check.
But you’ve got to approach it with patience, discipline, and a defensive mindset…
Yes, just like in sports, the best offense is good defense in trading, especially when scaling into winners.
Winners add to winners. Losers add to losers. Don’t be a loser.
Keep protecting your capital and keep managing your risk.
And when the trade starts to work?
That’s when you lean in and go for the win!
Have a great day, everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade
P.S.
- This is the trading pattern I look for every single day.
- Do you know the best times to trade?
- Learn what happens when a stock joins the S&P 500, and how you can play the move.