Wow, the market is crazy right now with tons of opportunities around every corner.
A lot of this has to do with earnings season revving up, so the news is flying, and stocks are along for the ride.
Many stocks on my watchlist have had some incredible runs just this past week.
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Take a look at Bright Minds Biosciences Inc. (NASDAQ: DRUG) on Tuesday:
DRUG Intraday, One-Minute Candles Chart; SteadyTrade
DRUG ended up returning 2,126.42%* in one day!!
And then yesterday, there was 180 Life Sciences Corp (NASDAQ: ATNF):
ATNF 5-Day, 5-Minute Candles Chart; SteadyTrade
This stock spiked 1,179.05% within less than two hours!!
These trades are absolutely spectacular, and the good news is that I think we’ll see more of them in the future…
But before you rush in and chase these shooting stars, you need to know how to trade them so you don’t lose your shirt.
Size Down on the Big Movers
One of the biggest temptations we face as traders is the lure of aggressive stocks making massive moves.
Everyone wants to get in on that excitement. I get it.
But not so fast…that excitement can quickly turn into danger if you’re not careful with your position size, or the number of shares you buy.
I’ve been in the game for a while now and I’ve learned that trading isn’t about hitting home runs—it’s about managing risk.
The bottom line: You need to size down on these types of stocks.
Why Should You Size Down?
- Preserving Your Capital
The number one rule of trading is to protect your capital.
It’s easy to get caught up in the thrill of a stock that’s up 100% in a day, (or like DRUG, 2,000%). You think you’re going to ride that momentum all the way to the moon.
But remember — any stock that moves upwards that big and that fast can do the opposite on the same scale.
So imagine if you’re too heavily positioned. One reversal can wipe out weeks, if not months, of gains in minutes.
By sizing down, you’re giving yourself a cushion. You can still participate in the opportunity without putting your entire account at risk.
And by the way, you don’t need a ton of shares to make decent money on these aggressive stocks.
- Volatility Cuts Both Ways
We all love it when volatility works in our favor, but remember—volatility is a double-edged sword. Those big green candles can turn into red ones just as quickly.
When you size down, you’re respecting the volatility. You’re acknowledging that you can’t control the stock, but you can control your exposure to it.
It’s all in the math. If you take a 50% loss, you need to make 100% just to get back to even.
Smaller position sizes help you keep your losses manageable.
- It’s Not About One Trade
I can’t stress this enough: It should never be about one trade.
If you’re putting too much size into a single aggressive stock, you’re betting too much on the outcome of that one trade. That’s not what trading’s about. Save that strategy for the casino.
Successful trading is about longevity. It’s about building your account over time.
Every trade should be just one small part of the bigger picture.
By sizing down, you’re taking a step back and seeing the long game. You don’t need to hit it out of the park on one trade…you just need to keep knocking out solid singles and doubles, and the wins will accumulate.
- Survive to Trade Another Day
I know, I say it all the time, but the reason I mentor is to help traders survive another day so they can come back again, grow their accounts, and eventually take advantage of bigger opportunities.
Aggressive traders get caught up in the hype, take on too much risk, blow up their accounts, and eliminate themselves from the game.
By sizing down, you’re protecting yourself from that fate. You’re ensuring that, no matter what happens with this one trade, you’ll have the capital and the chance to trade again tomorrow.
My Final Thoughts…
Sizing down isn’t about being weak or cowardly—it’s about being smart.
It’s about recognizing the inherent risk in these big movers and respecting that you don’t need to put your entire account on the line to capture profits.
By managing your size, you’re playing the long game, protecting your capital, and giving yourself the best shot at long-term success.
And by sizing down, you can still experience the thrill of the price action. You’re not missing out on any of that.
So the next time you see an aggressive stock making big moves, take a step back, size down, and keep your eye on the bigger picture.
To successfully trade massive movers like DRUG and ATNF, you need a robust trading platform that features technical indicators, charting, stock screening, and more.
The StocksToTrade platform has all of that. It’s my top pick and the one I use every day. 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!
To learn more about position sizing and trading aggressive stocks, tune in to one of our free daily 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 weekend, everyone. See you on Sunday for my 5-Stock Weekly Watchlist.
Tim Bohen
Lead Trainer, StocksToTrade