I know things seem pretty crappy right now.
If you find yourself struggling, know that you’re not alone.
Take a look at the S&P 500 ETF Trust (NYSE: SPY), it just made new lows…
SPY chart 2-years, 1-day candles (Source: StocksToTrade)
While that might sound scary, keep in mind that there are thousands of stocks out there. And not all of them are moving with the overall market.
Keep reading, I’m gonna show you how I find and trade these outliers…
What Spikes Stocks
If I wanna trade the right tickers, I’ve gotta find them first.
After I blew up my first account, I realized there were some rules I needed to follow.
Here they are…
- I only trade stocks with a catalyst/news. There needs to be a reason for the move.
- I only trade stocks that show me they’re volatile first. Headlines come out every day for thousands of stocks. I don’t wanna guess which ones will spike. I let the stocks find me.
- I only trade low-priced stocks. I learned to day trade penny stocks from Tim Sykes and realized they’re my bread and butter. Plus, low-priced stocks are historically more volatile.
Now, an easy way to find tickers that meet these criteria is to make a scanner.
Here’s how I do it…
My Stock Scanner
There are a bunch of free scanners out there you can use. But when I’m day trading, I need to know that I can access up-to-date information quickly.
WARNING: Most free scanners display data 15-20 minutes late!
Here’s an example of a scan I run every morning to find potential spikers:
Source: StocksToTrade
From left to right, it filters for stocks that…
- Have news today
- Are less than $5 (true penny stocks)
- Have gained more than 20% on the day already
It’s a pretty simple scan.
And don’t worry about paying a lot for a stock scanner.
Use this link for a 2-week trial.
It’s a great scanner. Plus, I can link my brokerage account to the platform. So I can trade and scan without opening a ton of tabs. It makes trading so much simpler.
This scanner found yesterday’s morning spiker MICT Inc. (NASDAQ: MICT).
Here’s how I would trade it…
My #1 Tool for Trading
Well, maybe the scanner is my #1 tool for trading. I guess this can be #2.
All of the pro traders I know use technical analysis in their strategies. And one of the most common forms of analysis is support and resistance lines.
If you have no idea what I’m talking about, don’t panic. I used to be where you are right now.
But I didn’t have this video for help…
Take advantage of that.
Now, back to the trade.
On the 1-minute chart, we can see resistance at $0.80 and support at $0.70. Take a look…
MICT chart 1-day, 1-minute candles (Source: StocksToTrade)
The idea is to wait for the stock to put in a base and consolidate sideways.
Then, you could buy shares just above the support level and wait for them to climb higher.
If the stock breaks down through support, cut the trade immediately.
Pro traders don’t hold and hope. When the price cracks support, they get out because they know it’s a bearish signal. You should do the same.
Want to learn more trading strategies that keep me safe in this market?
Join my live trade webinar every Tuesday and Thursday.
Oh, and another thing. Tim Sykes and I are going on a live trading tour. Traders will get to ask us questions in person while we trade.
Hurry, there’s limited space!
Learn from the pros to survive this market,
Roland Wolf
Editor, The Wolf’s Den
P.S. My mentor Tim Sykes and I have decided to team up for a special in-person live training tour. Click here for the cities and dates.
