How I trade small-cap stocks

Replay 📹 I Hot Hand 🖐️ I TickTock 🎩

Good evening, Folks!

I’m enjoying this long weekend at my daughter’s volleyball tournament in Myrtle Beach 🏖️. Although mostly stuck in the gym, I have to say I’m a fan and I hope to be back soon… I’ll share all my opinions in my Bullseye session at 11AM on Tuesday!

Now down to business…

I have found a lot of traders (especially newer ones) are drawn to trading smaller stocks.  

The lure, of course, is the fact that they can make very quick gains, if you are right on the timing.  I think the gains can be similar to what is possible when you trade stock options.

While I am well-known as an options trader, I really like trading smaller stocks too.

After teaching trading techniques for well over a decade, I have found there are a couple of common problems that I think traders run into – so let’s see if we can help fix that!

The first problem is idea generation.  With so many stocks out there, how do you find the right ideas to trade?

If you are following my ideas that I share totally in my emails, I think that is a great place to start.  I usually share a couple of new stocks each week that I think have great short-term potential.

Also, start doing a quick scan for a few minutes each day to find stocks that are making big moves.

If you want to use a great, free scanning tool, Yahoo Finance has a great scanner you can use each day.

I like to look at this every day and find stocks that show up.  Make notes on stocks that you see pop up on that screener on a regular basis.

That is how I found C4 Therapeutics (CCCC) a few months ago. 

If you do some quick research, you’ll find this is a very fascinating company.  More importantly, it has a history of surges where the stock makes a big move in a short period of time.

While there are a lot of great companies like this, I typically don’t like to hold them for long periods of time.

I am looking for spots where the stock is likely to make a move higher, but also protect myself and stop out of the trade when it doesn’t work out.

Let me visually show you some of the signals I use to make trades.

Look at the price chart for CCCC since the start of this year. 

A couple of notes on the chart above.  The yellow line is the 20-hour simple moving average line.  Learn how to trust and master this simple line, and it will become your best friend.

When a stock is trading ABOVE that line, for me at least, that is “GO” time.  I want to give the stock the benefit of the doubt and get in for the ride.

You can see three spots in the chart above where I placed the arrows.  

Two of those spots led to fantastic moves higher.  One of those led to a break-even trade.  Pretty good, right?

The biggest thing I think traders need to work on is the discipline of stopping out of a trade.  

I have my own rules (basically, when the stock trades a full day back under the 20-hour line), but no matter what you decide is right for you – have a plan before you make a trade and stick to it.

If you can learn to honor your own stop-loss rules consistently and also look for stocks trading above the 20-hour line, it will really improve your own trading, like it has for me!

Now, a couple other notes… If you’re looking for another great small stock idea, I have a brand new one coming out on Tuesday before the market opens.  Keep an eye out for it!

In the last couple of weeks, I alerted three stocks.  They made moves of 30%, 40% and 28% (so far!) – so don’t miss the next one!

Also, if you want to work closer to me and get special live training sessions during the week along with my top THREE stock/options trades every day, then you need to make sure you take advantage of the special offer we have for Bullseye Unlimited right now.

My results speak for themselves.  Since March of last year, I have alerted over 280 trade ideas that made moves of 100%+ (sometimes, much, much more!).

Access to that knowledge can be a game-changer for your personal trading.

Right now, you can lock in an extra $200 off the regular pricing by using the code “bullseye” on this page.

Upgrading your trading by joining Bullseye Unlimited might be the best decision you ever made.  

Thousands of people use it every day, including Nick!

Thanks, Nick…

And I hope to see you on the inside soon!

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