Welcome back to the Wolf’s Den,

When I first got into trading it was a disaster. I didn’t know what stocks to trade, how to trade them, how much to risk, where to take profits or cut losses. 

It goes without saying … I was not making money. In fact, I was losing a lot more than winning during the early stretch of my trading career. 

If you feel like that now, I’m here to tell you that if you want to become a top trader then you have to be willing to deal with adversity. 

Even when you become a profitable trader, you’ll still have losing trades. Check out my Profit.ly account … I only win 60% of the time.

But my wins are bigger than my losses.

I’ll tell you exactly how I accomplish this. AND I’ll give you some stocks to focus on this week.

Let’s go… 

Why You’re Losing

We need to identify the cause of the losses to stop them.

Here’s my best guess… 

• You’re trading the wrong patterns.
• You’re trading the wrong stocks.
• Or you’re overtrading.

Take a minute and ask yourself these three questions… 

• Am I trading with patterns and do these patterns work for other traders right now?
• Am I trading the right stocks?
• How many trades do I make in a week?

If you answered ‘no’ or ‘idk’ to any of those questions … we’ve got the source of the problem.

Keep reading to solve it… 

Problem #1

You’re not trading with profitable patterns.

This is probably the most serious of the trading issues. It’s common to see newbies jump into the shark tank with a chum bucket.

The poor guys and gals never saw it coming.

It is imperative we use profitable patterns to trade. Otherwise, how the heck would we know when to buy and when to sell?

Now, every trader’s different, so I’m giving you 3 pattern options, starting with my favorite… 

Gap and Crap Reversal

Panic Dip Buy

First Green Day

Remember to trade with risk in mind. Have a set exit point in case of profits … and in case of losses.

Keep those losses small!

Problem #2

You don’t know if you’re trading the right stocks.

The stocks I trade need to have the following… 

• A low price — Usually below $5.
• A low float — Usually below 10 million shares.
• A recent news/catalyst — Examples here.
• A history of running or recent IPO — Stocks that spike in the past can spike again. And IPOs are naturally volatile.
• High trading volume — At least 1 million shares traded. Float rotation is great to see.
• A discernable chart — I can’t trade it if I don’t know what I’m looking at.

If the stock you’re watching doesn’t check those boxes … ditch it.

Problem #3

You’re trading too much.

A lot of people think they need to make a bunch of trades every day. Or that they always need to be in a position.

Nothing could be further from the truth.

Take Tim Sykes for example. Master trader and mentor with over $7 million in profits.

Last week he made 8 trades. That’s only 2 a day… 

And most of those trades only lasted a couple of minutes. The rest of the time he sat in cash.

That’s the beauty of this niche. Once you discover the right patterns and the right stocks, you can get in and out for quick profits.

If you traded more than eight times last week, I’ve got homework for you. Don’t trade this week.

Wake up and watch the markets as much as you can, but don’t place a trade.

This is a huge opportunity to grow. And most traders don’t do it because they’re too greedy.

Think about it, are you gonna make $1 million in a week? Probably not. You didn’t do it last week.

Take my advice and just watch for a bit … you’ll see what I mean.

4 Stocks To Practice With

These are the four hottest stocks from Friday.

Track their movements and look for pattern recognition.

And use the stock checklist above to add your own volatile runners as the week continues.

•  NexImmune Inc. (NASDAQ: NEXI)

• Canoo Inc. (NASDAQ: GOEV)

• United Maritime Corporation (NASDAQ: USEA)

• Vertical Aerospace Ltd. (NYSE: EVTL)

One Last Thing… 

Traders need up-to-date software to profit effectively.

Free trading software usually displays data 10 – 20 minutes late. That’s no good.

Remember sometimes we only hold positions for a couple of minutes.

Don’t worry, you don’t have to break the bank to find the right tools… 

You could use one week to practice and one week to trade. 

Let’s get to work,

 

Roland Wolf

Editor, The Wolf’s Den

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.