Penny stocks are a niche market – which means they don’t always align with major indices. As the Dow, S&P 500, and Nasdaq keep making new highs, our niche has slowed.
That’s okay because it opens up an opportunity to learn. There’s no better time to prepare for the next time penny stocks get hot.
I know everyone wants to make big bucks, but most of the rewards a trader will earn are earned over time. So you have to learn to be aggressive and prepared for solid opportunities, and then withdraw less or less and act when there is not a really great opportunity Adjustment is key!
– Timothy Sykes (@timothysykes) April 8, 2021
It also means time to enjoy life a little. Like this…
Kyle and Huddie take Dubai
Last week was a great time! Kyle, Huddie, and I went to Dubai to celebrate everyone passing the $ 1 million milestone. * (Congratulate Kyle and Huddie in the comments!) It was a well deserved vacation. They even received press coverage from Lovin Dubai leading to one You can see the interview here.
(* These results are not typical. Individual results will vary. Most traders lose money. Traders like Kyle and Huddie benefit from years of hard work and dedication. Trading is inherently risky. Always do your due diligence and risk yourself never more than you can afford to lose. I also hired Kyle and Huddie to help out with my education business.)
Usually it’s just me talking about crazy “offices” with a view, but now my best https://t.co/occ8wKmlgm students are also having fun and I’m so proud to be here in Dubai @ MikeHuddie & @traderkylec while we celebrate that each of them makes $ 1 million in trading profits! pic.twitter.com/XPW84OVwvK
– Timothy Sykes (@timothysykes) April 8, 2021
Lost property office
Our vacation was not entirely stress-free. Kyle misplaced his passport and Huddie walked away from a profitable business.
Then we zippered off and I left my laptop when we returned to the hotel. I had to do a webinar on Huddie’s laptop on Friday. Luckily mine was there when I got back …
I FOUND MY LAPTOP, WHEWWWWWWWWWW, THANK GOD !!!!!!!!
– Timothy Sykes (@timothysykes) April 9, 2021
A great snack from this trip …
You need to be mindful of your personal schedule and attitude.
I made a lot fewer trades last week – also because the penny stock niche slowed down. But also because it was such a busy week. And we didn’t just have fun. We worked hard too. I was exhausted at the time the market opened.
More on the importance of the personal schedule in the Trade Review. First…
Trading Mentor: How to Find Your Trading Niche
My niche is penny stocks. It is what I love and what I teach. (I’ll explain why below.) YOU need to decide which niche market is best for you.
But remember, it’s not just Penny Stocks vs. Forex or Large Caps. There isn’t just one way to do things within a niche. You can always “niche down”.
How? First you need to understand …
What is a niche market strategy?
Let’s step back from trading for a moment and look at the small business niche market strategy. Many successful entrepreneurs learn about the Pareto principle through trial and error.
What is the Pareto Principle? It is more commonly referred to as the 80/20 rule. The idea is that roughly 80% of sales come from 20% of customers / customers. With that in mind, many small business owners “niche” down to focus on the type of customer that makes up the 20%.
Similarly, many business owners find that most of their sales come from a core product. So they focus on selling this core product, with everything else being the icing on the cake.
Does the Pareto Principle apply to retail? It’s not an exact science, but give it a try …
Niche market trading
My top students all go through a period of trial and error. Eventually they’ll find a bread-and-butter setting or two. They know the setup so well that it involves flushing and repeating.
I’m not suggesting that you should just swap one setup in the long run. But first it is your job to find Your Top trading pattern. This is your niche market trading strategy.
How to find your commercial niche
Finding your personal trading niche is a matter of experimentation. You have to test and optimize.
Test different setups with small position sizes. Or paper trading with StocksToTrade. If you don’t know which setups to test, you need to learn first. (Read on for recommended study materials.)
Here is a hypothetical example …
For example, let’s say you study two hours a day for six months. You will learn to see the patterns that make up my 7-step framework. But you still don’t know what will work for you. So you choose to practice breakouts, panic-dip buying, and short circuits on the first red days.
It is crucial that you keep a trade journal to keep track of data. They keep track of the setup, profit / loss percentage, OTC versus those listed, etc. You collect as much data as possible.
Finally, you will see which strategy works best. And it may not be what you like the most. You might love shortening the first red days, but the data says you are much better at breakouts.
Based on the data, focus on breakouts until you do Master the setup. That doesn’t mean you won’t be trading any other setup. But you act small until you are sure a setup works. Then you can set a larger size over time.
Why Penny Stocks?
If you’re brand new to penny stocks, check out my FREE penny stock guide. (Don’t overlook this resource if you’re new. There is a lot of valuable information there.)
With all the options available, why should you focus on one of the most hated niches in finance? Why not focus on Large Caps, ETFs, or Forex?
Check out this video for my recording …
Trading Penny Stocks versus Other Stock Opportunities
In all honesty, I’ve found that penny stocks are more predictable. I am not saying that it is easy. But with other commercial vehicles you are dealing with the best and greatest. Why should you try to beat better, more informed traders with much larger accounts? Not to mention algorithmic traders, hedge funds, and prop firms.
Then there is the potential volatility. Sometimes the world’s most fundamentally flawed company can be the biggest spiker out there. Volatility creates opportunities.
It’s a nice niche if you respect it and take the time to learn it. And penny stocks offer niche strategies that you won’t find in other types of games. Check out this video for valuable information on niche trading strategies.
View and use niche strategies
For me, the penny stock niche is all I need. You have to decide what is best for you. No matter which niche market you choose, develop a flush and repeat system by creating a niche.
Let’s look at a trade from last week …
Dubai’s time zone is not ideal for trading as US markets open at 5:30 p.m. and close at midnight. That said, it is better than trying to trade from Bali or Japan.
But it makes a very important point about the personal schedule. The personal schedule is one of the seven indicators on the Sykes Sliding Scale. I suggest using it for any trade. Especially when you are figuring out your trading niche.
Niche Market Trading Strategies: Time Of Day Matters
Seems obvious right? But many traders have developed bad habits over the past year. I see students trying to buy dips like the market was still as hot as January. For a few months they could get away with it because funded penny stocks bounced like crazy.
Know when the market isn’t the best. Sometimes the best trade is not a trade. Forcing trades “because I went from work to trade today” is insane.
And know when you are exhausted or not. What is your personal attitude? Living circumstances – like losing a job or losing a pet – can affect your trading.
Last week, the first hour or two of trading suited my personal schedule best. I’ve made fewer trades than recently. And I focused on setups that I practiced Hundreds of times over the years.
Like this trade …
GeneThera, Inc. (OTCPK: GTHR)
GTHR was a fast morning spike on April 6th. The catalyst was news of a wastewater testing platform to fight the COVID-19 pandemic.
Check out the April 6th GTHR intraday chart with my buy and sell notifications …
I tried to buy the first dip on GTHR in the 8 cent range. It was moving too fast. Because it just kept going, I got into the game at 21 cents a share with a goal of 20% -50%.
I couldn’t get fill when the stock climbed into the 40 cent range. But I’m not going to complain as this trade was a 71% gain for $ 3,435. *
(* Please note: My results are far from typical. Individual results will vary. Most traders lose money. I have benefited from years of hard work, dedication and experience. Trading is inherently risky. Do your due diligence and never risk more than you can afford to lose.)
Millionaire Mentor Market Wrap
Niche market trading isn’t like a 9-for-5 job where you get a guaranteed paycheck every month. The market turns what is hot and what is not. You have to learn to wait for your favorite pattern.
Outsiders and non-students have no idea what I’ve been doing since $ DIA $ SPY $ QQQ are strong but welcome to niche market trading: small caps that outperformed in January / February won’t be big every week / month. So learn to act small / study / enjoy life when our niche is slow!
– Timothy Sykes (@timothysykes) April 9, 2021
So focus on the process and collect data to find the best setup. What should you learn
Start here …
30 days boot camp
The 30-day boot camp compresses all the basics of my niche strategy into 30 lessons. You don’t have to finish it in 30 days. You will also receive my “Pennystocking Framework” guide and “The Complete Penny Stock Course” as a bonus.
Start your boot camp today.
It is not easy. Do you have what it takes?
If you are serious and want to dive in, Apply for the Trading Challenge today.
What is your niche market strategy? Share the comments below and congratulations to Kyle and Huddie too!