Yesterday I assigned myself 500 burpees.
I’ll tell you why in a moment. First, a little background…
I often tell students to do burpees if it seems like they’re missing an important point…
… or if I see them try to take a shortcut or trade in an undisciplined manner.
Why did I assign myself burpees, then?
Because I doubted student turned master trader Jack Kellogg’s Mullen Automotive Inc. (NASDAQ: MULN) trade setup. (If you don’t know Jack’s story, this is a quick read.)
I called him out during the last Trading Challenge webinar because he missed a gimme OTC first green day.
This is how I found the gimme OTC first green day Jack missed.
Back in the day, Jack would’ve been all over that play. Now, he trades using different strategies.
That’s why I want to explain why I focus on different stocks and setups than Jack. Check it out…
3 Truths About Growing a Small Account
While Jack was building a position in MULN, I was trading Boon Industries Inc. (OTCPK: BNOW). It spiked last Thursday on news its production facility was up and running.
There are a couple of things you should know about BNOW…
First, it’s a sub-penny play. I don’t like trading them, but I will if the setup’s right. Second, it was a midday trade. I don’t like midday trading. Again, if the setup is right, I’ll take it.
So, what got me to come out of retirement on a stock with two strikes against it?
Penny Stock Trading Lesson #1: Big Percent Gainers Are Less Frustrating
BNOW wasn’t just any OTC spiker…
It was the single hottest stock in the entire market. It was already up nearly 400% when I bought it and it closed the day up 714%. Check out the chart…
Now, compare that to the MULN chart from the same day. (I’ll get back to Jack and why I owe him 500 burpees. Keep reading.)
As you can see, MULN was choppy and not nearly as big of a percent gainer. That said, more than one student called me out for ‘chasing’ a trashy sub-penny stock.
I can’t argue with anyone who says BNOW is a trashy sub-penny play. But in this case, it wasn’t a chase.
Penny Stock Trading Lesson #2: If You Trade Your Plan, Trading Isn’t Scary
Why wasn’t my BNOW trade a chase? Because it had a big morning spike on news, consolidated, and was breaking out to new highs. Trading volume was huge even though the dollar volume wasn’t great.
Most importantly, I had a trading plan that accounted for price action and percent gain. Check it out…
I can’t stress this enough…
If BNOW had NOT kept making new highs, I would have cut losses quickly. No hesitation. If a stock isn’t doing what I want, I get out. It’s as simple as that.
And that brings up the final lesson this week…
Penny Stock Trading Lesson #3: You Get to Choose
Trading isn’t an exact science. I trade based on the desire to help someone with a small account grow it. And I donate 100% of my trading profits to charity.
Like I said, back in the day … many millions of dollars ago … Jack would’ve been all over BNOW. But he’s earned the right to trade a different way. He has the experience and account size to scale into, and out of, a position.
Just to keep things in perspective…
My trade was a 44% win for a profit of $1,560. Jack swung MULN until yesterday when he scaled out for a reported $204K win. (He hasn’t uploaded the trade to his Profit.ly page yet, but I’ll link here as soon as he does.)
That’s a different league than what you’re trading. And it’s a different league from what I’m trading. As your teacher, I owe it to you to take trades that I believe can teach you to move the needle on your account.
But the truth is, you get to decide. Again, Jack didn’t start with stocks like MULN. As recently as last summer, Jack said OTCs are the only way to go as a newbie. He hated trading listed stocks. But — and this is KEY— Jack has a goal to become one of the best traders in the world.
That means he had no choice but to start learning different strategies.
I think we can agree that he’s doing a fine job. Here’s my commitment to Jack to knock out those 500 burpees…
Please give MAJOR props to https://t.co/occ8wKmlgm students turned master @Jackaroo_Trades who has displayed such incredible patience on his $MULN long & is really repeating the benefits. I owe him 500 burpees for doubting its setup, watch https://t.co/tRuvJprJwY & get inspired! pic.twitter.com/8MuS0aIQwe
— Timothy Sykes (@timothysykes) March 21, 2022
More 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 $1.
5 More Penny Stock Trading Lessons
Miss the webinar? Trading Challenge students can watch the replay here. Here’s a taste of what you’ll learn when you watch the replay…
- The dark side of success. (A warning for millionaire traders who think they’ve ‘made it.’)
- Why taking sentimental trades helps rich traders master their mindset.
- How depending on a guru early on leads to bad trading in the long run. PLUS: what to do NOW to avoid this common mistake.
- My ode to OTCs — and why I’ll NEVER stop trading them.
- The dangerous ‘popularity contest’ trades that most newbies fall for.
I have 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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