• The dangerous spikers you must approach with caution… 
• How to learn to profit in hot and slow markets — and be the best at both…
• Plus, I have a MAJOR career announcement — and you can only see it here…

Don’t chase stocks. I know I say it often, but do you fully grasp the dangers?

We’ve all been there … The market opens and one of the stocks on your watchlist starts spiking. You don’t want to miss profits, so you jump in while it’s surging upward.

These are the kinds of plays that blow up accounts. It all boils down to FOMO.

You might think a strong open is a sure sign that your thesis is right. But things aren’t always as they seem in the stock market.

If you’re not careful, you could get sucked into a crapper you never saw coming.

You must adapt your trading style to stay safe from these sketchy plays.

Read on to learn how to defend yourself. But let me warn you — it takes a lot of self-control. I’ll show you some examples of plays to avoid. Just remember it’s a whole different ball game in a live market.

What Is Chasing?

I’ve answered this question a few times, but I want to lay it out again in case anyone missed it…

Real quick, I have an important side note … If you have any questions, click this link to submit them to my team. I try to answer as many questions as I can in my weekly Q&A/video lessons.

Now, what’s chasing? Chasing a stock is when you buy shares after it’s already spiked considerably. This goes for intra-day and daily charts.

Daily Chart Example: ISW Holdings Inc. (OTCPK: ISWH)

Check out this example with a daily chart of ISW Holdings Inc. (OTCPK: ISWH). 

See how it touched the $1 resistance level at the end of July 2021? Then it broke through and gapped up on September 4.

Some people might get excited after seeing three big green candles … But I get nervous.

Stocks can only run so high without a pullback. And for these sketchy penny stocks, the pullback is usually pretty big.

Sure enough, look at what happened the next day. The stock gapped up and tried to keep going. But it ended up crapping and falling back below the previous close.

Intra-Day Example: Metal Arts Company, Inc. (OTCPK: MTRT)

Chasing intra-day would mean buying at the breakout level or above it. Let’s look for an example in a chart.

Here’s Metal Arts Company, Inc. (OTCPK: MTRT) on September 1. See how the stock peaked above $3 at around 3:15 pm Eastern? Then it dips down and comes back up to the breakout level.

Chasing this play would mean buying at or above that breakout level of $3. The problem here is you don’t know if you’re buying a real breakout or a fake breakout.

I know that the chart shows it continued upward. But some stocks look like they’re going to break out only to take a nosedive back down. Then you’re left buying at the top.

Don’t Chase — Wait

I try to not chase stocks. That means… 

• I stay away from breakout plays for overextended daily charts
• And I won’t buy while a stock’s breaking out

It’s just not worth it. To stay in the game you have to learn to focus on the best possible plays

The best course of action is to wait for a pullback. Then buy above an obvious point of resistance like at a double bottom.

The most difficult part is watching a stock break out when you’re not in it. Get used to the feeling. There will always be plays you miss. That’s part of trading.

I’m just trying to take the meat of the move. I don’t need to buy the bottom or sell the top. And I know there will always be profits I miss out on. So if I miss a play here and there, it’s OK. That’s trading.

Just make sure you use every opportunity as a learning experience. As long as you grow your knowledge account, it’s not a waste.

Final Thoughts

Hot markets can teach bad lessons … like buying into strength and chasing runners. A lot of newbies who learned to trade in the last hot market learned bad habits that aren’t sustainable long term.

Maybe you could have chased a runner a few months ago and still profited. But now we’re in a slower market. A lot of those traders are now learning that they can’t chase stocks with news.

If you want to be a self-sufficient trader you’ll have to learn how to profit in hot and slow markets. The best way to do that is to manage your risk by getting safe entries. That means buying on dips and avoiding chasing.

There are a lot of rules to learn if you want to be a day trader. Keep studying.

Buy the dip,

Roland Wolf

Editor, The Wolf’s Den

P.S.

*All content in this newsletter is intended for educational and informational purposes only.

The material in this newsletter is not to be construed as (i) a recommendation to buy or sell stocks, (ii) investment advice, or (iii) a representation that the investments being discussed are suitable or appropriate for any person.  No representation is being made that following The Wolf’s Den’s strategies will guarantee a particular outcome or result in profits.  The price and value of stocks may fluctuate depending upon various market factors, and, as such, the strategies used by The Wolf’s Den to adjust for those fluctuations may change without notice.

There are significant risks associated with trading stocks and you must be aware of those risks, and willing to accept them, in order to invest in these markets.  Past performance of any trading system or methodology is not indicative of future results.  You should always conduct your own analysis before making investments.

You should not trade with money you cannot afford to lose and there is a risk that trading stocks will result in a complete loss of your investment.  Trading stocks, particularly penny stocks, is not suitable for everyone and requires hard work, due diligence, capital, and substantial time to monitor the market and timely execute trades.