How To Profit When the Trade Fails

by | Aug 22, 2022

Happy Monday!

Welcome back to the Wolf’s Den,

I’m getting a lot of questions about Volcon Inc. (NASDAQ: VLCN).

Last time I wrote to you, I outlined a specific pattern that’s been crushing it in this market.

Here it is, in case you forget … 

  • hot sector
  • recent news
  • stock float below 10 million shares
  • a trading volume of at least 1 million shares
  • clean looking chart… 

It’s true that VLCN fits all those criteria (technically its float is 17 million shares but the trading volume negates the extra 7 million).

It’s also true that on Friday, the stock set up perfectly and broke through resistance. Then it came crashing down.

Here’s a chart …

VLCN chart Source:

I understand why some of you are confused.

I can explain what happened … 

And show you how our trading pattern allows for profits, even when a trade fails.

We’ll probably see more stocks that set up like this in the next few days.

Let’s prepare!

It Was Almost Perfect

We can run through the checklist… 

  • hot sector: EV
  • recent news: Right here.
  • stock float below 10 million shares: 17 million shares (we spoke about this)
  • a trading volume of at least 1 million shares: +100 million shares
  • clean looking chart: The price bobbled between $3 and $2.75 until the failed breakout at 12:50 P.M. Eastern

VLCN chart Source:

And let’s look at the same pattern from Wednesday when Blue Water Vaccines Inc. (NASDAQ: BWV) skyrocketed … 

BWV chart Source:

These are two examples. One when the pattern fails. And one when the pattern works.

And there’s a way to profit from both.

Where To Buy

I’ll copy and paste from the last letter, the advice is the same … 

“The consolidation above a support level is when traders get in. That way there’s a clear level to cut a potential loss at.”

For BWV, the trade that worked, traders likely bought during the consolidation above $4. Then they sold as the price broke out and continued higher.

For VLCN, traders likely bought above $2.75. The challenge here is recognizing when the pattern starts to fail.

It can happen to any stock. It could have happened to BWV.

But if a trader recognizes the VLCN price breaking back below $3, they still have a chance to sell for a small profit.

Especially if they sold into the run-up and after the breakout.

Here’s a chart that shows the concept better … 

VLCN chart Source:

Pretty crazy how traders can profit even when the pattern fails … 

There’s a trading plan for all the patterns that Sykes teaches.

But there’s one pattern he holds above all the rest.

It’s made him millions over the years.

Better check it out, there are a lot of opportunities in this market … 

Study these patterns, and remember to cut the trade when it fails!

Don’t get stuck holding the bag,


Roland Wolf

Editor, The Wolf’s Den


P.S. You can keep screwing around by yourself. Or you can join me and Sykes’s team of millionaire traders. We all started right here.

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.

About Roland

Originally from Arizona, Roland started trading after a career-ending ankle injury forced him to quit pro soccer. After a few years of hard work, he managed to turn $4,000 into over $1.2 million.

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