5 Top Penny Stock Trading Lessons From The Weekly Challenge Webinar: Key Points
- Even with the Omicron scare, the major indexes are trading near all-time highs. But that’s exactly why fundamentals matter right now. See lesson 1.
- Why you don’t have to crush it to make six figures per year trading penny stocks. See lesson 2.
- The truth about watchlists. (And why cash is a position.) See lesson 4.
5 Top Penny Stock Trading Lessons
Every week I give a Trading Challenge webinar. Some are Q&A sessions. Others are live-trading webinars.
Webinars are a GREAT way to grow your knowledge account. Over time, the lessons stack up. So come along, ask questions, and work to get better at trading penny stocks.
This week we focused on having the right perspective. Here are five trading lessons from the webinar…
Lesson 1: Why Fundamentals Matter and a Crash Is Coming
Look at the major indexes. Since the start of lockdowns, they’re up over 100%. Bitcoin (BTC) got up to $68,789. The $69 million NFT sale happened in March. NFT mania has been going on for quite a while now. So NFTs are due for a giant collapse.
The #1 Way I’m Preparing for a Market Crash In 2022
There’s only so much madness. Everything is overextended and that usually leads to stock market crashes. That’s why I’m getting ready now…
Will the Omicron variant be the catalyst that actually leads to a big crash? I don’t know. It looks less likely today than last Friday. All I know is that we’re up way too much. And you should really start to tone down when everything’s up.
Check out this two-year chart of the SPY S&P 500 ETF…
From the bottom in March 2020, it’s up roughly 120%. The economy hasn’t grown that much. Maybe online businesses have because more people are staying home.
But I really think we’re overextended.
The reason for this is stimulus checks. A lot of irresponsible gamblers who put money into junk like Dogecoin or Shiba made money. Now there are all these people who think rules, stats, and responsibility don’t apply to them.
The market is NOT always rational in the short run. But over the long run, it is. And a lot of wealthy people made their money by sheer luck following others. But not knowing rules or discipline … they’re gonna lose it.
Lesson 2: What Does It Take to Make Six Figures a Year?
Last week I only made $3,059. But if you put that in perspective, that could add up to $150,000 a year.
Some people say, “Oh, Tim, it’s so slow.” But for me, where I trade mostly OTCs, that’s probably the median. My average, over 22 years, is roughly $6,400 per week.
So it’s important to keep things in perspective.
How did I make the $3K? Lots of trades, including losses. I had a 60% win rate on the week, which isn’t great. But they were small losses. Roughly 96% of my week was on one trade. I could have taken that one trade and not done anything else.
There are a lot of misconceptions about what makes money in trading. You don’t need to trade every day and you don’t need a bunch of monitors.
Lesson 3: Why I’m Starting Another Small Account Challenge
First, there are a lot of new students trying to get over the PDT. If that’s you, get ready. Watch as I try to grow an account that’s under the PDT. I just funded an account with $12,000.
Second, I’m partnering with TradeZero. I’ve NEVER done this in my 20+ years of trading. My usual take on brokers is that I don’t like them, so find the one that sucks the least for you.
You do need a broker and having a good one is key. I can’t tell you how many messages I got from people when OTCs were going crazy. They had Robinhood or WeBull, which don’t allow OTCs. Sadly, they missed out on all the best plays.
So why TradeZero?
We have a deal that I’m very excited about. They’re going to allow crypto trading, hopefully in the first part of next year. And they have a charity project. Charity is very near and dear to my heart. TradeZero has a pretty cool plan for charity and trading.
Lesson 4: Creating a Watchlist and Trading Are Two Different Things
It’s good to create a watchlist every day. But you do NOT have to trade every day.
The fact that I teach and have to create a daily watchlist to share with students keeps me on guard. In the past, before teaching, sometimes I got undisciplined. But not creating a watchlist meant missing good plays.
Even with a watchlist I sometimes miss good plays. And you will, too. There’s no one rule for everybody. (Except rule #1: cut losses quickly.)
The more you build your knowledge account, the better. The more you prepare, the better your odds of success. So create a watchlist as part of the process but be willing to NOT take a trade.
That brings up one more lesson…
Lesson 5: When Is It OK To Take a Day Off?
I always say “no days off, study hard.” But that’s a general idea. You can take a day off if you’re not feeling well or if you haven’t seen your family in a while.
“Tim, I feel guilty taking a day off.”
Don’t feel guilty for taking a day off. Take a day off whenever you want. Part of this is not burning out. But if you have the general mindset of no days off, you’ll go further. It might surprise you how fast your knowledge account can grow with the right approach.
Some people say, “No days off … that sounds like a miserable life forever.” I’ve taught some pretty degenerate, undisciplined people. It doesn’t take forever. This isn’t a 20-year or even 10-year study program. But the first few years you have to be willing to sacrifice.
How to Get More Penny Stock Trading Lessons…
Those five lessons barely scratched the surface. Here are 5 more lessons to look for when you watch the webinar. If you missed it live, watch the replay. If you’re not a Trading Challenge member yet, apply here.
5 More Lessons From My Challenge Webinar
Here’s what you missed and what you’ll learn when you watch the replay…
- Why I prefer to be ‘out of tune’ with the markets. (This lesson is SO counterintuitive, but my stats don’t lie.)
- Six key questions every new trader should ask. (And why testing is the best way to find the answers.)
- Why being selfish in your trading journey could be one of the most important decisions you make.
- The one strategy I wouldn’t try right now unless you’re willing to start small or paper trade first.
- What to do when you experience ‘analysis paralysis’ over a potential trade. (PLUS: My top mindset challenge tip to overcome it.)
The weekly Trading Challenge webinars have SO MUCH information. (There were at least 12 more important lessons not mentioned here.) But you have to show up, pay attention, and bring solid questions.
Coming later this week…
Top lessons from Wednesday’s live trading webinar. If you’re not already a member, now’s the time to take the…
Weekly webinars separate the Trading Challenge from our stand-alone products and newsletters. And it’s not just my webinars and lessons.
Every week there are two to four live webinars from mentors like Tim Lento, Mark Croock, and Matt Monaco.
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