I'm a few months away from being at the year mark for the Challenge. Here's everything I took away. If you do not have a work shift schedule that allows you to trade for the first few hours of the market open, do not join the challenge yet. For most of the time I was in the challenge, my work put me on the midnight shift in Hawaii, which unfortunately for me the shift ends at 7am, and i got home at 8am. In Hawaii depending on daylight savings time the market opens at 330-430 am.
If you can join the challenge..It is entirely worth it. The knowledge you gain everyday by live trading examples and being able to chat with the coaches is completely invaluable.
Clearly you can see how i have not been that profitable. BUT, that is not a testament to the lack of resources and knowledge. What this group has to teach you does work. I believe in the strategies completely. I can say in confidence that majority of my losses came from 2 trades where I did not follow the rules and it completely burned me. I will never forget $SPI. Hardest lesson to ever learn, shorting the front side of the move, it is harped on us over and over to not short the front side of the move, you do not know how high theses stocks can go. I was greedy, went in way to big way to fast. I wanted to be the next Tim G., Dux or Roland. But success comes with practice, lots and lots of practice. Start small, very small. A $3 loss feels really good when you know you made the right decision in cutting losses when something doesn't go your way. And making $100 feels really good when you only invested $200. Cutting my losses on a $8000 loss hurts, even when I knew it was the right call in getting out. Its demotivating and may have even prevented me from moving on.
I took a break/ mostly because my work schedule forced me too and I spent the next few months studying, Endlessly. I watched pennystocking part deux, framework and trading tickers everyday on my way to work. Really engraved the strategies and the rules and what to look for. Not everything is still relevant, but the market is alive and changes, you need to adapt to it.
So hears a quick breakdown of what I learned the hard way and hopefully it will help you not repeat these mistakes and take advantage of what you can.
Not to do
Do not short the front side of the move - first green day without a clear line of resistance to play off of. DO NOT SHORT. You need a very clear line of heavy resistance to play off of.
Do not go all in every trade. Scaling in a position based on your bankroll and risk level is very important. If the key line of resistance (LOR) is $.50 above your entry, take into consideration that that may break and you will have to eat that loss. For 1000 shares that means a 500$ loss. If you are afraid that the top is in and you are $.50 from the LOR, play it safe with 100 shares, a $50 risk is way more manageable. If you are patient and wait for a bounce back into that LOR risking only $.05, that 1000 shares now only puts you at a risk of losing that very manageable $50 loss if you are wrong.
Do not assume that bad news means a stock will tank. $SPI was delisted from NASDAQ and was an earnings loser. A complete junk company, which is why i went in so big so fast when it was spiking off that bad news. But it went WAY higher than I imagined. It happens all the time. Had I waited for it to fall considerably then spike back into that High of the day LOR i would have been golden with a short with a clear risk level.
Do not hold overnight if the company is at risk of doing a sketchy financing. $HMNY cost me a pretty penny when i took a small 100 share position overnight and they put out an offering after hours that i couldn't get out of because i was using E-TRADE. Gapped down $4 the next day and I had to eat that loss way below any support i was using for the play.
What to do
Buy breakouts with solid volume - VOLUME IS KEY. personally over 50k a minute is necessary to ensure i don't get stuck with a position that i cannot exit from. But if you are a high roller, you might need 100-200k a minute to be able to scale in and out your position size.
Dip Buy huge 50% drops. The drop may be in half an hour, one day or multiple red days. Ensure their is no bad news catalyst causing it because those can keep going. In general you do not want to buy into strength, wait for a dip, it will prevent the amount of time you are bagholding.
Short overextended gap downs. Once a stock has its run and is gapping down the next day, it is very good risk/reward to short into any morning spike that goes to r/g or the previous days high. That's straight from TIM G. Trading tickers.
Shorting into a key line of heavy resistance. A stock with a history of failed spikes that is spiking again off NO NEWS is very enticing to me. Just be careful because nothing is 100% and cutting losses is key with this type of play especially.
Shorting a pump and dump - very high risk/reward. finding shares is hard but worth it. My biggest win ($6000) was from this type of play and is what helped Tim Sykes make his first millions.
Know the hot sectors and have charts open for them consistently - being prepared is always key for any play. Right now, if a company even mentions they are going to mine bitcoin now are having gains upwards of 1000% on the day. I.E. $RCGR. Have a watch list and pay attention. Wait for the trades to come to you.
Do what feels right for you! Every guru trades differently and this is what has been working for me. Once I started trading again, I have been seeing much more success by trading small and being patient for the right setups. STUDY STUDY STUDY. Engrave the rules into your head and be disciplined. The challenge is expensive enough, you don't need to add heavy losses like mine before you start trading smart. Hope this helps some of you new folk.