Bohen’s Take: Trading the Coronavirus Panic

It’s that time again, gang…

Welcome to the latest edition of Bohen’s Take!

In this edition, you’ll learn about the powerhouse 2020 we’re working on at StocksToTrade…

Plus, I’ll show you some wild, coronavirus-related moves that day traders in our StocksToTrade Pro community are making.

I’ll also share an often-overlooked feature of StocksToTrade that’s an awesome tool for finding the next hot stock setups. It may look little, but it’s an awesome tool…

I’ve got a jam-packed edition for you this month. Let’s get to it!

What’s the Haps?

Well, team, we’re a month into the new year already … I hope you’re all keeping up with your New Year’s resolutions!

I had a super-busy January…

We’re gearing up for a massive year at StocksToTrade. And I’m currently developing a new video series. It’s basically a beginner’s trading guide.

It’s something many STT members have been asking for, and it’s gonna be fantastic.

The video series aims to help someone starting with zero market experience. We want to help these newbies work up to placing their first trades and beyond. It covers reading charts, looking at a stock’s fundamentals, keeping watchlists, and so much more. 

We’re also going gangbusters over at the SteadyTrade podcast. I’m really excited about the direction it’s taking…

Having Kim Ann Curtin co-host the show is just amazing. Her positivity just shines through. We’re signing some high-profile guests, and Kim keeps pushing for bigger and better things. 

Make sure to click here and subscribe to SteadyTrade. Trust me, you’ll be blown away by this year’s roster. 

The Setup of the Month

The great thing about the stock market is that there’s always something happening. There’s always at least one hot sector. There’s always at least a handful of stocks making big moves…

What’s hot right now? What’s all over the news? Coronavirus mania. 

This illness popped up in December in China. Since then, it’s quickly gone on to spread all over the world. It’s not a massive problem yet, but there’s talk that it may reach global pandemic proportions.

Now, I don’t wish for a pandemic. And I don’t want anyone getting manipulated into a frenzy by the media … But, as a day trader, I sure as heck will trade the volatility that can come with a pandemic scare…

And boy, do we have some strong volatility in coronavirus-related stocks.

First, we saw NNVC absolutely explode on January 21. The stock ran from $3 to $13 in a single day. Then it did an offering, and the stock tanked back down to $4… 

But that’s not the end of the story.

The coronavirus news kept on coming. So we saw even more crazy action … from $4 to $17, back down to $8, then up to $13 or so… It was an absolutely wild ride, with plenty of trading opportunities for savvy day traders.

APT was another hot coronavirus play.

The stock gapped up from $3.50 to $4.20 on January 21, then tested $5.20 later in the day.

After that, we saw a multi-day run up to $8. Then it was back down to $5 before rebounding up to almost $7 as I write this. Clearly you can see that some day traders are into these coronavirus tickers. 

Another doozy was LAKE. It gapped up from $11 to $12.50 and ran up to $15. Then it pulled back to $12 before it was back up to $16.50. Not too shabby.  

Now, I have to share with you a lesson related to the coronavirus outbreak situation: Know your tickers!

What does ‘know your tickers’ mean? It means to watch, listen, and learn. Remember which stocks went wild in different situations.

Just as all the coronavirus news was starting to build, I recalled the Ebola outbreak scare of 2014. I thought back to which stocks had monster moves in that situation.

LAKE was one of those tickers … In the Ebola days, it ran from about $8 to about $28 in a week.

Once again, I don’t wish for a global pandemic. But it does look like the coronavirus mania will be here for a while. And that means it’s time to keep an eye on related stocks.

Make sure to sign up for our weekly watchlist. I’m sure we’ll be mentioning a few coronavirus tickers and sympathy plays in the near future.

Feature of the Month

There’s a little discreet feature on the StocksToTrade platform that a lot of traders probably overlook. But it’s actually one of the most useful things for finding hot stock setups…

I’m talking about the Related tab — or what I like to call the sympathy tab.

You find this tab below the chart window and next to the tabs for SEC Filings, Events, and Key Statistics.

The Related tab lists stocks that are related to the current stock you’re viewing.

Say you see a huge move in LAKE, but you feel like you missed the boat … It can be smart to look for sympathy plays in related stocks. And this tab can help you find those tickers. You can sort stocks by volume, price, market cap, and more.

It’s one more way to help you zero in on those hot opportunities.

I definitely recommend everyone learn how to use it. If you don’t currently have StocksToTrade, come check it out with a 14-day trial for just $7.

What I’m Reading

Once again, here’s a book that’s not really a trading book, but is actually a great trading book…

It’s called “Loserthink.” The author is Scott Adams. Fun fact: He’s also the guy who created Dilbert, the comic strip.

“Loserthink” focuses a lot on cognitive biases, which is a fancy word for errors in our thinking.

I have to say, when it comes to trading, cognitive biases are one of the most common things that mess with traders…

You have sunk costs … That’s where you feel like since you lost money on a stock, you need to make it back on that very same ticker. And that can lead you to do some crappy trading. 

Then there’s the ‘adding to a loser’ phenomenon. This is when you have a losing position and increase your position size. You try and double down and make your losses back quickly … That’s a BIG no-no… losers average losers!

Of course, there’s also confirmation bias, which is maybe the most common one in newbies. That’s where, for some wacky reason, you absolutely believe a stock will go up. Even when by every objective fact and indicator, that stock definitely isn’t going up!

In the book, Adams writes more about the biases in the media and with politicians, but most of the lessons are super applicable to trading.

I definitely recommend this one if you’re looking for an interesting read with a bunch of lessons…

You might also like to check out Adams’ social media accounts or his Periscope. He’s super cool, smart as hell, and a true free thinker … my kinda guy!

[As an Amazon Associate, we earn from qualifying purchases.]

Conclusion

That’s it for this round, folks.

I know there are some people who are pretty spooked by the coronavirus outbreak right now. It’s natural. The news is everywhere. 

It’s one thing to trade the wild coronavirus volatility, but it’s another thing if this virus starts spreading its way across America…

I think the powers that be tend to handle these outbreak scares pretty well. Bird flu, swine flu, Ebola, SARS — the authorities handled them well. But the media definitely boosted the panic factor. 

My advice: Stay healthy, eat right, keep your immune system strong, and don’t freak out. Focus on trading the coronavirus volatility instead.

We’ll keep an eye on these coronavirus stocks every day inside StocksToTrade Pro. So now’s a great time to be a part of what I believe is the very best trader development community on the planet. Come join us!

How often do you use the tiny but powerful Related tab in STT? What other powerful tools do most traders overlook? Comment below. I love hearing from you!