4 Steps You Need to Take In an Unpredictable Market
The stock market is closed for the weekend, so study hard but also get outside and get some exercise!
One of my absolute favorite spots to go swimming and kayaking is in the Big Lagoon in the Philippines (have I mentioned recently that this job let’s met travel to some pretty awesome places?).
The last time I was there (as my photographers attest), I really let loose and didn’t think about stock trading or finance or teaching at all.
And even if you don’t want to exercise, then a little meditation or even reading in a beautiful place can be very good for you too!
Once you’ve gotten outside, taken that walk, or relaxed on a bench keep on studying by reading this issue! As important as it is to take some time for you, I can’t stress how important it is to also make some time to keep on learning on the weekends.
So let’s get right back into market fluctuations.
After yesterday, I hope you have a better understanding of what’s behind market fluctuations. So I’ll get right to the four key tips.
These tips can help you as you do your research for stocks on your watchlist.
Tip #1: Don’t Trust Stock Promoters
When it comes to penny stocks, big market fluctuations often happen because of stock promoters.
These are the marketing companies behind stock pump schemes. They get traders to sign up for their email lists and then pump up whatever stock they’ve been paid to pump.
There was a time when you could make a lot of money on pumps. You could just ride the pump when the news broke.
But the game has changed. And now you don’t know if the news was sent out to several email lists. In other words, you might be on email list number 10 instead of number one, and lose big because you buy into something that’s already played out.
If you read the disclaimers in their promotions, they blatantly tell the truth — so don’t be one of the dumb people who doesn’t read the disclaimer.
Some of them even come out and say the promotion is for penny stocks and the volume and price will likely increase during the promotion. They tell you straight up that if you buy and hold past the promotion, you’re likely to lose all your money!
The point I’m trying to make here is this: Don’t trust the stock promoters. They promote the stocks they’re paid to promote. And they tell you exactly that if read the disclaimer.
If you want to research the stocks they’re pumping, go ahead … but don’t trust them because you’ll get burned. I recently made a video exposing the most blatant penny stock promoter right now. Check it out. Learn.
Tip #2: Pay Attention to New Catalysts
The stock market isn’t an exact science. Reading and deciphering market fluctuation is almost an art. But if you put in the time to understand all the moving parts, then trading in the market might be a good place for you.
When watching a stock you should always pay attention to new catalysts.
- Is there a positive earnings report?
- Did the company sign a deal with a large, well-known company?
- Is there some new product or service announcement?
Did the company announce at 4 p.m. on a Friday that it will be in the news over the weekend? Will it be good news or an exposé on a company scandal? These are all catalysts and they’re the types of things you should look for.
Other catalysts might be sector news, like, for example, the recent cannabis stock news. Cannabis companies have been in the news a lot due to Canada legalizing pot for recreational use. This type of news helps stimulate market fluctuation. Sometimes you get so-called sympathy plays from these kinds of catalysts.
Tip #3: Use Stock Analysis Technique Before Trading
Never, ever go into your trades without doing research, which includes stock analysis.
So many newbie traders look at one or two things and then make a trade with incomplete information.
They latch on to the few things they think are important or exciting, only to miss some piece of the puzzle that would have kept them from making a bad play.
For example, let’s say you put a stock on your watchlist because it was a big percent gainer. Then you think it might be a possible trade because you found some news — a catalyst — behind the big gain. Well, that’s good but it’s not enough information to take a position!
What do you do next? How can you tell if the price move has legs? You use a stock analysis technique to determine if it’s a possible play.
You need to learn technical analysis of stocks.
Like I said before, it’s not an exact science. But there are things to look for.
Tip #4: Improve Your Stock Market Skills
I can’t repeat this enough: Long-term success in trading comes from a continuous desire to learn more.
You have to keep learning and refining your knowledge and experience. You can’t expect to get rich following some stock promoter’s tips or even following some trading teacher’s tips.
That’s why my teaching goal is to help my students become self-sufficient traders. Some of them become much better traders than me — and I’m totally happy with that. I want you to become a better trader than I so I can retweet your tweets about profitable trades.
Nothing makes me happier!
Whatever you do, never stop learning. Keep studying. I know I harp on about this. That’s because it’s so important and possibly the only way you’ll get to achieve your loftiest financial goals.
The Bottom Line
Market fluctuation is part of the game. For a penny stock day trader, it’s a good thing as long as you arm yourself with knowledge.
Study — keep studying — and you’ll begin to understand the underlying factors that cause markets to fluctuate.
Armed with this knowledge, you can potentially be better prepared for the stock market battlefield.
— Tim Sykes
Editor, Penny Stock Millionaires