Challenge Webinar Top Penny Stock Trading Lessons: Key Points
- One indicator almost always means more than float and short interest. (See penny stock trading lesson #1.)
- Short-seller collusion can actually spike a stock. (PLUS: Why you should avoid these games.)
- Love panic dip buys? Don’t miss the four indicators to watch for max panic.
30 Millionaire Traders Got Their Start Here
3 Top Penny Stock Trading Lessons
Every week I give a Trading Challenge webinar. They alternate between Q&A sessions and live-trading webinars.
Over time, lessons from webinars compound to grow your knowledge account. Come with questions and work to get better at trading penny stocks under (and sometimes over) $1.
Last week we focused on penny stock Q&A. Here are three trading lessons from the webinar. Read to the end to see what you’ll learn when you watch the replay.
Penny Stock Trading Lesson 1: Price Action Is King
Too many students are obsessed with float, float rotation, and short interest — I don’t care about any of that.
Most of the time the float and short interest are wrong. The data is old.
Those numbers don’t account for insiders or promoters holding shares to dump into the market. And you can’t trust any of these companies or promoters who say a stock is heavily shorted. Nobody in their right mind shorts a 1- or 2-cent stock.
Forget about the numbers and focus on price action. Study charts and watch them in real time to get a feel for how a stock moves. Does it trade heavy? Does it move fast?
With enough experience, you’ll learn which stocks you prefer to trade.
Penny Stock Trading Lesson 2: Short Seller Collusion Creates Short Squeezes
There’s a lot of scams, manipulation, and disgusting collusion in penny stocks.
Short sellers talk to each other in chat rooms. So when a stock gets targeted by a short report, it can actually spike.
Why? Because traders in Discord chat rooms and Reddit threads know the stock’s loaded up with shorts. So they band together to buy and create a short squeeze.
All these groups try to battle each other to manipulate a stock’s price.
It’s collusion. Eventually, I think all these chat rooms will get shut down. That’s why I’m not a part of it. It’s kind of fun to watch from a distance, though.
Penny Stock Trading Lesson 3: Trade Like a Coward
I’m optimized for teaching. I teach beginner lessons and I trade overly safe. Remember, in the beginning, most traders lose. And learning to trade in a bubble market is tough — money might be easy, but lessons are hard.
When you trade sketchy penny stocks, trading like a coward is good.
Cut losses quickly and size up slowly. Don’t go big when you’re trying to figure it out. Get your setup and process down first.
More Top Penny Stock Trading Lessons
Here are 10 more lessons to look for when you watch the webinar. Trading Challenge students can watch the replay here.
Want access to every webinar, DVD, video lesson, and more? Apply for the Trading Challenge here.
10 More Penny Stock Trading Lessons
Miss the webinar? Catch these tips and more you watch the replay…
- Data is data, right? WRONG! Discover why knowing which data matters is key to long-term trading success.
- The difference between old-school email promoters and today’s social media touts. (And why the SEC could crack down big time SOON!)
- Four indicators to watch to determine the difference between panic and max panic.
- Why I rarely trade sub-penny stocks even when my indicators suggest a buy signal. (Hint: if you don’t know the answer, you haven’t studied enough.)
- The truth about why I don’t get along with short sellers (and never did — even when it was my top strategy).
- What bear raids and chat pumps have in common. (And why they’ll both eventually get shut down.)
- The counterintuitive reason why 2021 was a terrible year to learn to trade.
- The cognitive process top traders use that you learned in kindergarten. (And how to hone it into a finely tuned ‘sixth sense’ that allows you to see what other traders don’t.)
- Why traders making fun of my small gains and losses is the BEST compliment I could ever get as a teacher. (More importantly, why it’s KEY for students like you.)
- PLUS: The movie series EVERY wannabe short seller should watch before they join the dark side…
There are at least 17 more trading lessons I didn’t mention here. I can’t encourage you enough to show up every week with solid questions.
Ready to take your trading to the next level? To access the live webinars and hundreds of archived webinars…
Take the Trading Challenge
Live webinars separate the Trading Challenge from our stand-alone products and newsletters. Every week there are two to four live webinars from mentors like Tim Lento, Mark Croock, Matt Monaco, and me.
Want more penny stock lessons from Trading Challenge webinars? Comment below, I love to hear from all my readers!
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