Picture a wildly volatile trashy penny stock making insane moves in premarket…
You’re watching it spike but you’re too scared to get in, unsure if it will reverse on you or keep going higher.
You don’t want to miss the move but you also don’t want to chase.
I’ve been there.
But now with my 15 years of trading experience, I know just what to do…
I look for patterns that can offer solid risk to reward with high-odds entries.
And today I’m breaking down not one, but two killer ways you could’ve tackled a 390% gainer on Friday morning.
I’m talking about strategies that could’ve turned this wild penny stock surge into your sweet trading victory. So let’s dive in!
Want to meet in person? I’ll be in Vegas in October and want to see you there! Plus, there are perks for being one of the first to sign up — check out all the details here.
See you there!
Two Winning Approaches to Trading a 390% Gainer
Missfresh Limited (NASDAQ: MF) was a 390% gainer on Friday morning.
It’s a trashy Chinese penny stock, but it did have a few things to like about it…
The company pumped out two press releases back to back — one on Thursday after hours and one on Friday in premarket.
It also has a low float and traded high volume with float rotation an hour before the market opened.
So during Pre-Market Prep, I handed traders two ways to trade it…
First, it was a move we don’t see very often and it happened early. The second move was a more conservative idea and perfect for new traders…
The $1 Cross in Premarket
MF started premarket trading with a nice gap up, consolidation around VWAP, and then it blew through VWAP and the $1 level.
That’s something to look for.
Penny stocks that cross the $1 level are similar to real stocks that cross the $100 level — it can spark a bigger upside move since the stock has crossed a crucial psychological level.
These $1 cross opportunities don’t come around every day, but when they do, they can be pretty mind-blowing. And the risk-to-reward ratio on a potential 20%-30% move is off the charts!
But as I said in Pre-Market Prep, if you missed that early move, don’t chase or get frustrated…
We’ve got all day. And the next move I said to look for was a…
Dip and Rip After 9:45 a.m
Even though MF had incredible float rotation during premarket, it’s complete China trash.
And that’s why I advised traders to enforce the 9:45 rule on this.
I know that’s very conservative. You can yell at me and be like Tim, it’s too safe. But when I see Chinese trash, I just want you guys to be very careful.
And I think for newer traders, the best approach is to enforce the 9:45 rule.
It gives the stock time to calm down after its big premarket spike … And a dip or consolidation gives time for shorts to build their positions.
Then we wait for after 9:45 a.m. to smoke them all.
That’s exactly what MF did…
MF chart: 1-day, 5-minute candle — courtesy of StocksToTrade.com
You had to deal with some volatility halts in MF, but if you follow my rule for when you get stuck in a trading halt, you still would’ve exited with profits if you took the dip and rip entry.
But trading is all about finding what works for you.
These are two trade plans I gave to Pre-Market Prep members, and the trades worked out.
You have to find the right approach that fits your style and risk tolerance.
Whether you’re a seasoned pro or just starting out, my 15 years of trading experience can give you that extra edge you’re looking for…
See how you can join me daily in Pre-Market Prep when you attend a webinar here.
Or stay up to date on the market and tickers I’m watching with my three Market Update videos per week.
Have a great day everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade