Watch the price movement on Monday and Tuesday, I realized that the Dogecoin (DOGE) chart is a prime example of a repeatable pattern: the penny stick pump.

Especially the celebrity penny stick pump.

I’ve seen time and time again: celebrities and icons use their influence to pump stocks.

That hasn’t changed in the more than 20 years that I’ve been trading. Except maybe with social media, more people are blindly following the influence …

It’s more common too. It seems like everyone on FinTwit is a stock expert these days.

But what’s even more interesting is that the rise and fall of DOGE is perfectly illustrated four crucial trading rules that you must ALWAYS follow. More on that in a moment.

These rules keep going through my head as I watch the candles on the DOGE chart tick deeper into the red.

As of this writing, it is 70% below its highs (minus 50% percent). only this week). The DOGE chart looks just like some other charts I know well – advertised penny stocks that have all crashed while unsuspecting newbies have been burned.

So I teach my students to spot patterns early … But too many traders don’t get the memo in time. And they lose a lot. I hate to see it.

It’s the same pattern in DOGE. And no, it doesn’t matter that it’s crypto and not a penny stick. Desperate pocket owners rush online to brag that the literal joke is a cryptocurrency still on the way to the moon!

I like to make fun of myself, but let me be clear – I have absolutely nothing against Dogecoin.

This is a history lesson in the making.

1. Always sell in strength

I posted this tweet on Monday …

When you are solidly green on a position and momentum is on your side, you need to take profits.

ALWAYS sell in strength.

This rule will never change for my Trading Challenge students and also applies to the DOGE situation …

From mid-April to the first week of May, DOGE experienced an absolute boom.

On April 6th, DOGE was trading for just over 6 cents. On May 7th, DOGE hit a breathtaking all-time high of 72 cents.

From the bottom up, this step would get you 10x your money. Remember it. It’s a repeatable pattern.

Penny stocks keep crashing after making 10x winnings from below. I am now seeing similar moves in crypto. (BTW, I’m not the only one seeing penny stick patterns in crypto … see what Matthew Monaco is up to right now.)

As the price of DOGE continued to rise, retailers shouted “HODL to $ 1!”

Here many experienced traders took a serious break …

This trading approach can result in huge losses. Worse, it can destroy confidence.

Too many traders just focus on the money. That is a mistake, whether you hold on and hope for more or you are unable to reduce a loss …

It can happen to anyone. It’s easy to get caught in the money. But you have to remember the big picture. Failure to do so can damage your trading mindset.

And trust is crucial in the long term.

I’ve seen newbies freeze after making a critical trading mistake. Don’t be that trader.

Instead, learn to sell in strength. ESPECIALLY when a stock approaches 10x from its low point …

If you’re lucky enough to make huge profits on a shitty penny stick or a highly speculative altcoin created as a hoax … take the money and run!

2. Reduce losses FAST

This is my # 1 rule. I had to learn the hard way. (Find out more about it in my book here.) But I don’t want a trader to have this painful experience.

Now, learn this: you will likely never buy the bottom and sell the exact top. And you will make mistakes throughout your career.

It still happens to me. I’m still taking losses. There is no such thing as perfect trading.

But you can choose to learn from your mistakes. These are often the strongest lessons.

And you need to learn to reduce losses quickly.

It can make all the difference whether you live to fight another day or blow up your account. Let’s look at an example with a hypothetical DOGE trade …

Suppose you are unlucky enough to get caught up in FOMO and buy DOGE for 70 cents.

Supernova placement

When it climbs to 72 cents, you feel excited. Next stop, $ 1!

But then the unthinkable happens … DOGE starts selling after Elon Musk’s SNL appearance.

It drops below 69 cents, then 65 cents, then 60 cents … and that excitement you felt becomes a horror.

They realize that you made a big mistake. That’s OK. No panic.

Take a deep breath, stay disciplined, and carefully consider your options …

Do you listen to the greedy HODLers and hope to turn back? Or are you biting the bullet and reducing your losses before they get worse?

Of course, you reduce losses quickly!

Once your position turns red, cut it off and move on.

3. Buy the rumor, sell the news

© Millionaire Media, LLC

Stocks and cryptos regularly trade around big news. And often the market assumes that the news will affect price action in one way or another.

These could be trading opportunities or traps, depending on your approach.

One key to the ‘buy rumor, sell the news’ catalysts is knowing that most traders get in early. DOGE is a great example of how this works.

Check out what happened to Musk’s performance on Saturday Night Live. This marks the all-time high for DOGE. Look at the diagram from DOGE. The price started falling after Musk’s SNL performance.

The catalyst was already priced in DOGE.

That’s why you have to learn ride the hype. Never fall for it.

Had more traders understood that the rumor caught on more than the actual news, we probably wouldn’t have that many DOGE bag holders.

But greed easily gets in the way.

Now traders have tied billions of dollars on DOGE as they hold desperate hoping for a comeback. That brings me to my final point …

4. Never hold and hope

© Millionaire Media, LLC

In the crypto community, it is almost necessary to “HODL” coins that have fallen 50% or more.

Sellers and profit-takers are regularly shamed on Reddit and Twitter – when in reality they should be congratulated on a win, even with small wins. Remember, small wins add up, but only if you reduce losses quickly.

And why do you tie up your trading capital in a loss position? Again, your mindset and confidence will get messed up. The pattern is always the same – dotcom stocks, weed stocks, meme stocks.

Bullishness builds up over weeks or months and too many traders get drawn into the excitement of the moment.

But the crash is inevitable. Check out GameStop (NYSE: GME). Check out all of the penny stocks that follow the supernova pattern. Learn my 7 step penny stocking framework to better understand the pattern.

It’s not about if those celebrity pumps are going to crash … it’s a matter of when.

But for some reason, many traders hold all of their stocks through huge drops. Keeping something at 70% is a big mistake. Before that I had cut out WEG.

Then these traders try to make comparisons with other charts in which the purchase of the dip was “rewarded”. But most of the time, these charts have nothing to do with penny stock pumps or crypto.

And if they had learned to reduce their losses quickly, they would not be able to hold and hope.

So NEVER hold on and hope. It’s a sucker game.

Pump Pattern: The Bottom Line

Do you want to swap? You need training. I don’t care if you want to trade penny stocks, crypto, or options. You need to know the patterns and the story.

If you are trading a pump, you cannot avoid the crash on the other end – unless you have the skills and knowledge to sell strength or reduce your losses.

That’s why history is important and that’s why I teach. Study the Past!

Wish list banner

I’ve seen it so many times.

So my students were prepared when DOGE showed up. We knew exactly how the chart was going because we kept seeing this pattern.

If you are reading this and thinking, “How can I learn to recognize these patterns?” – Apply for my Trading Challenge.

I teach my students all of my rules for smart trading and how to be self-sufficient.

No matter what … be aware, stay disciplined and always follow the four golden rules when trading pumps.

What do you think of DOGE? Let me know in the comments – I look forward to hearing from you.


Please enter your comment!
Please enter your name here