What would you do if I told you that eventually, all penny stocks would fail?
I am not talking about a 50% or 75% chance of failure….
I am talking about these types of stocks that have a 100% failure rate.
But how do I know all of this? I am not a psychic by any means…
And throughout my years of experience and studying these charts inside and out, I have developed something that could help you understand these trading strategies.
Not every trade will play out the same, but studying the past and recognizing how every single penny stock is being promoted…
Can help you understand how their story will end. Granted, these penny stocks may not have collapsed within a day or two.
It could even happen in the next month or two.
Trading isn’t about getting lucky, it’s about being patient and understanding the process.
Over the last 20 years, I have taught countless students to help them understand the nuances of penny stock trading…
And understanding these nuances can help you understand why these plays can become so predictable.
So be sure to see why it’s important for you to understand this framework inside and out…
Never Hold And Hope
Right now, I am hearing about way too many traders who are holding and hoping that a stock is going to rebound…
But the thing with penny stocks is that you never want to hope that a stock will rebound.
Let’s take a look at Cloudweb, Inc. (OTC: CLOW)
Unfortunately, a lot of new traders go down with the ship because they believe the promoter’s hype.
They believe that this may be the next big thing, and the stock is going to keep going up…
And now traders are down 70%, 80%, and 90% from this recent sell-off by promoters.
When CLOW was trending upwards, there were a lot of dip-buying opportunities, most of which I capitalized on…
But I never just buy and hold onto a stock for several days hoping it’s going to keep going higher.
Penny stocks are crap, they will all fail, it’s not a question of if, it’s a question of when.
This is why I like to stick with quick solid breakout trades and dip-buying opportunities.
No trader should hold and hope that this stock will rebound, and this is a clear example of why.
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Don’t Overtrade
At times I am very thankful that I am traveling a lot because it prevents me from over-trading.
I have seen traders who make 20, 30, or 40-plus trades in a day, but at that point, you won’t find the highest quality trades possible.
You may be forcing random trades hoping for a positive outcome instead of waiting for perfect setups.
I have proven that it’s about the quality of your trades, not the number of trades that you make.
And unfortunately, we all make mistakes because we are human.
But spotting these perfect opportunities takes practice and studying, but you have to be willing to adapt to what is happening around you in the market.
I always look back at my losses and learn from the mistakes I made…
Or even the opportunities that I missed out on.
And it’s important to remember that not every trade will work 100% of the time.
All of these patterns will repeat, and the question is will you be prepared for the next trade from these nuances?
Previously I’ve mentioned that CLOW has provided us with several dip-buying opportunities in the past…
I have learned that over time with this stock, this may be the last opportunity to have a chance to dip-buy like this.
This stock has had a history of having nearly a 50% panic, which helped catch my eye…
Even though there weren’t a lot of volumes when this stock panicked, I was able to make a quick profit.
Expect The Worst
Anytime you trade, you always want to expect the worst.
We have seen plenty of stocks where traders are left holding and hoping that it would go higher, then the complete opposite happens.
A lot of these stocks can spike and come down in a hurry.
When these promoters tell you to buy, it’s usually when they are selling.
This is Atlas and Zach Morris 101.
Take a look at one of my millionaire students’ latest tweets…
Another totally normal day in microcap land with Chinese manipulators dumping millions of shares of MingZhu Logistics $YGMZ as they tell suckers to buy. Totally obvious that it was wash-traded up on low volume over the last month. pic.twitter.com/bSzHgLpDLg
— Michael Goode ❤️ 🦆 (@goodetrades) December 23, 2022
Let’s take a look at two quick examples…
Intelligent Living Application Group Inc. (NASDAQ: ILAG)
MingZhu Logistics Holdings Limited (NASDAQ: YGMZ)
Both of these stocks were pumped up by promoters, and then you include over-aggressive traders who are shorting this recently pumped-up stock causing it to spike…
And then eventually, it will all come crashing back down to earth.
We see this time and time again.
The same thing is happening right now with GlycoMimetics, Inc. (NASDAQ: GLYC)
And Vision Energy Corporation (OTC: VENG)
And the same thing will happen, they will all crash eventually like CLOW as it is all part of these 7 penny stock nuances.
Final Thoughts
Some of you may think I continue to say the same thing over and over again…
Which shouldn’t be a surprise because I do.
I like to teach, and it has taken me years to come up with a process that has helped me become so successful.
My overall goal is to teach everyone and create as many millionaire students as possible.
Every day my millionaire students are chatting about possible plays in the chat room, learning from one another.
Trading isn’t about getting rich quickly and looking for the hottest picks, it’s about understanding the process…
And ultimately knowing how all of these penny stocks will end.
Continue to study hard and recognize there are several opportunities out there from these promoted stocks…
Just make sure you are understanding this process and not just holding and hoping!
Cheers,
Tim
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