In yesterday’s blog post I talked about reliable and consistent patterns that I look for when I trade.
These setups have worked repeatedly, so I know the odds are stacked in our favor when we enter these trades.
But, as I always say, nothing is guaranteed. The odds are good but there’s never a 100% chance something is going to work out.
It’s just always safer to trade something that’s been successful multiple times in the past rather than jumping in aggressively and hoping things will work out. The market could care less about hope.
The setup I want to talk about today is our old dependable friend, the multi-day runner. I’ll explain what to look for and the mechanics of it.
Table of Contents
What Is a Multi-Day Runner?
One of the first things I tell any trader—whether new to the game, or struggling with his or her current strategy, or both—is to focus on only a few setups so as not to be overwhelmed. And one of those should be the multi-day runner.
Now, when I talk about multi-day runners, I’m contrasting them with what I call the “one-and-done” setups.
A one-and-done is a stock that maybe had several days of quick spikes but closed lower each day and then tanked for days after all that.
How to Spot a Multi-Day Runner
Multi-day runners tend to be in the current hot sectors, so their runs hold up unlike the one-and-dones.
I’m also looking for stocks that closed at or near the high each day. This is a sign of sustainability.
These stocks have had multiple runs after closing near the highs and then gapping up the next day, and this price action has happened several times during the year.
This is the kind of multi-day runner that offers real potential. And remember, it should be a “real” stock, not a sketchy penny stock that might not be around in a few months.
I also look for a stock that has news that day.
So, in summary, we want to see a stock that is “real”, is in a hot sector, has had viable runs, and has news.
And if you’re not interested in scanning every financial news source out there on a daily basis to find these stocks, we have a tool that does all that work for you.
Breaking News Chat is a financial news chatroom led by veteran Wall Street traders, each with over 20 years of experience. They filter out all the noise and give you only the information you can use.
Get ahead of the market with the news you can use!
A Real World Example
On September 24th Banzai International (NASDAQ: BNZI) fit all the criteria:
- It had news: That morning, it announced a debt payoff and restructuring agreement, which was good news for the company.
Of course, Breaking News Chat caught it:
At 8:31 AM EST Breaking_News_Analyst> $BNZI Banzai Announces $24.8 Million Debt Payoff and Restructuring Agreements with Participation from Company Insiders. $BNZI POP to $4.85 on $24.8 Million Debt Payoff and Restructuring Agreements with Participation from Company Insiders. BNZI was trading at $4.75 when alerted and hit a Pre Market High of $7.44
- It was a former multi-day runner:
BNZI 6-Month, 5-MInute Candles Chart; SteadyTrade
- It’s in a hot sector: Banzai International is a marketing technology company.
Our Oracle system was on it too! BNZI showed up on the list that morning with a green entry signal of $7.09 per share.
By the way, if you’re not familiar with our Oracle system, you’re missing out on a goldmine for traders.
Oracle is our proprietary algorithmic system that scans the market every morning to gather critical data. It then generates a list of 15 to 20 stocks that it identifies as potential winners, on the long and short side, along with an entry price.
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So here’s what BNZI did on the 24th.
BNZI 1-Month, 1-Minute Candles Chart; SteadyTrade
That was gain of 57.97%*!
And if you got in premarket, your return was even higher!
My Final Thoughts…
As I keep saying, no trade is ever guaranteed, but this is one of my favorite setups. I consider it reliable and highly likely to succeed.
As always, use proper risk management by using stop-losses and make sure you thoroughly know the setup before you use it.
You’ll also want to paper trade this strategy before you risk your own capital, especially if you’re new. To do that you need a robust trading platform that offers a paper trading environment, charting, technical indicators, and more.
StocksToTrade is the one I use every day. It has everything I look for in a platform. It also has a selection of add-on alerts services, so you can stay ahead of the curve.
Grab your 14-day StocksToTrade trial today — it’s only $7!
I also suggest you check out one of our free webinars.
They run all day and offer trading tips and tricks, information about how we use our proprietary Oracle system, and other valuable training.
Have a great day everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade