In this edition, I’ll take you through some awesome trade setups we’ve seen recently, including one that my SteadyTrade co-host Stephen Johnson killed it on.
I’ll also share with you one simple factor that’s found in most big daily percentage-gaining stocks.
And to top it off, I’ll share one powerful way to help you develop your trading skills in just five minutes per day.
Let’s get to it — read on, friends!
Table of Contents
What’s the Haps
Recently, we’ve had some sunny days here in Michigan. It’s been great to get outside in the sunshine and do a bit of landscaping work.
Trading is a heck of a lot of fun, but when I complete a tiresome outdoor job, I always feel a real sense of accomplishment. I highly recommend getting outside and doing some hard work!
On the SteadyTrade podcast front, we recently had two killer episodes.
I know, I know … I’ll always say our podcasts are great. But judging by the sheer amount of comments and feedback we got, we really hit the nail on the head this time.
One of the episodes we broke down was a live trade on the ticker ROAN. This was a stock that Stephen was shorting, and it was a doozy.
Roan Resources (NASDAQ: ROAN) long-term chart (Source: StocksToTrade)
To say the short worked out well would be an understatement. If you check out the long-term chart, you can see the stock got absolutely destroyed.
It was a perfect example of a good short, even if Stephen’s reason for jumping into the stock was, ahem, less than planned — check out the episode here.
Stephen lucked out … this time. I have some ideas on how you can avoid making trades on a whim or because of your emotions. More on that in a bit.
We also hosted another episode that was more of a mixed bag of topics. We discussed things like backtesting and why we love the VWAP indicator so much. Some great education and absolutely free!
As always, I’m super proud of the SteadyTrade podcast. For a trader, what more could you want? Great content and entertaining banter … all for the grand total of $0!
Make sure you subscribe to our YouTube channel if you haven’t already.
My Most Exciting Trade Setups
Picking my favorite trade setup is always a bit of hard decision…
So for this edition, I want to share a great little stock with an explosive move that also comes with a lesson in the power of trading low float stocks.
That stock is Soliton, Inc. (NASDAQ: SOLY), a little company based in Houston, Texas, that trades on the Nasdaq.
The company just obtained FDA approval for a tattoo removal device, and on May 28, the stock price went ballistic. We saw it rise from $5 to $22 in a single trading day — a classic Tim Sykes Supernova.
Soliton, Inc. (NASDAQ: SOLY) showing a massive price surge (Source:StocksToTrade)
With a move that large, of course, it popped up on everyone’s radar. In the StocksToTrade Pro chat room, we had our eye on it before the market opened on May 29.
A lot of people wonder how to trade a stock the day after it’s made a massive move. There’s a lot of ways to do it, but found a nice little setup that day — we call it the ‘Dip and Rip.’
With the Dip and Rip, we look for a strong stock opening up and moving lower, forming a dip in the stock price. Then it rockets up through its previous high. That is, dip then rip.
That’s exactly how the SOLY setup played out. The stock began the day drifting lower, then rocketed up to re-break the previous day’s high of $22 at around 9:45 a.m. The stock then went on to spike a further $6 or so per share.
The stock later gave the session’s gains back, drifting back down … so you had to be spot on with your exit if you played this one. But hey, with $6 or so in total upside moves, there was plenty of meat on the bone. Skilled traders could take $4 or $5 a share off the table.
Now, there’s a handy lesson we can learn from this stock. The reason for such an aggressive move in SOLY wasn’t just the news catalyst due to the FDA approval. It was also because it’s a low float stock.
Low float stocks are where a few investors hold a large percentage of the stock, and they generally don’t buy and sell each day.
That means that there aren’t many shares available on the market each day. So, when you have a bunch of traders rushing in to buy the stock, you have high demand and low supply, and that can cause explosive moves. Pretty cool, huh?
Ready to learn more about these kinds of trades and tips on developing the skills to help you find and trade setups ? Join the StocksToTrade Pro community — that’s exactly what we focus on.
StocksToTrade Feature of the Week
My name is Tim Bohen and I’m addicted to trading low-float stocks. There, I said it.
It’s not just the SOLY setup of the week, we also saw a few more awesome low float runners that made huge moves.
FOR EXAMPLE, ELTK on Nasdaq recently ran from $1.64 to $7 in a single day.
These kinds of eye-watering percentage gains are why small-cap and penny stock traders focus on low float stocks.
Now, if you didn’t know, the StocksToTrade platform was built from the ground up … and just one feature allows you to isolate low float stocks, so you can focus on their juicy setups. And that happens to be the STT feature of the week: filtering stocks by float.
On the platform, no matter what you use to locate or analyze stocks, you can filter down to just the stocks with a low float.
That means the charting you look at, the scans you run, and even using the proprietary Oracle AI algorithm on all of them, you can choose to only view low-float stocks.
So, if you’d like help in finding the stocks that could be the day’s biggest percentage movers, try our low float scan. A 14-day trial of StocksToTrade is just $7!
What Am I Reading Right Now?
In the “Lord of the Rings” series, there’s one ring to rule all…
But did you know that in the world of trading books there’s also one book to rule all?
Yeah, it’s just my opinion, but I think every serious trader should have this week’s book on their bookshelf. And if you’re really serious, put it on your desk so you can revisit it each day.
That book is “The Daily Trading Coach: 101 Lessons for Becoming Your Own Trading Psychologist” by Dr. Brett Steenbarger. In the world of trading, Dr. Steenbarger is an absolutely incredible trading psychologist.
The doc has one of the best CVs in the trading industry. He’s previously worked with Paul Tudor Jones, the famous billionaire hedge fund manager, as well as other hedge funds and proprietary trading firms.
Now, onto the book…
“The Daily Trading Coach” is very to digest. It has 101 chapters, and each chapter takes about five minutes to finish and includes a practical lesson.
Here’s my funny little story about this book: When I first read it, I devoured it on my Kindle. If you’ve ever used a Kindle, you may know that it allows you to highlight text and store it in a related file.
So there I am, hammering through the book and highlighting all the interesting parts. By the time I get about halfway through the book, the Kindle displays a message that says I can’t highlight anymore…
No, my Kindle wasn’t broken. I had triggered a plagiarism flag by copying and pasting so much text. They didn’t want me pirating it! That’s how much amazing content you can find in “The Daily Trading Coach!”
I recommend that you get the book and keep it handy.
You can use it like a daily spiritual devotion … Pick it up each day and read a different lesson for five minutes. That can help you keep your mindset in check. It’s a way to always continue developing and improving your trading skills.
I don’t care if you’re a newbie or an advanced trader, you need to read (and re-read) this book!
That’s all folks…
I hope you’ve enjoyed this edition of Bohen’s Take.
Like we always say at StocksToTrade, it’s incredibly important that you constantly work to improve and refine your trading skills.
“The Daily Trading Coach,” the book I recommend above, is one simple way to work on that.
Looking for a more hands-on learning experience to help you boost your trading? Join us at StocksToTrade Pro. Here are just a few perks…
I’ll share with you what I trade every trading day. You’ll have access to educational webinars, you can interact with other friendly members in our chat room, and much, much more. Check it out today. You’re always welcome!
What’s the trading book that you return to again and again? I have more than a few myself, but I’d love to hear your picks … Share them below!