Elite Stock Signals Outperform the Market

Lesson 2: About Stocks

Trading stocks can be entirely different from trading stocks priced above $1.00. Often, a single trade can significantly impact a stock’s movement and shareholder sentiment. Due to the high volatility of stocks, a large sell order can easily scare off investors, while a large buy order can encourage them. This is why liquidity is key.

What causes a stock to rise? The most critical catalysts are typically news through press releases, hype, promotions, and newsletters. It’s important to understand that this market is also rife with insiders manipulating stock prices, short-sellers, and companies diluting their own stock by increasing the number of shares. It’s impossible to know how a stock will trade under these factors.

Join Our Community

Lesson 3: Chart Setup

We assume you know how to read charts and have some understanding of candlestick patterns and other indicators. If not, do more research, as there are plenty of online resources for beginner traders.

Key Indicators We Look For:

• 50 MA (Moving Average): A breakout above this line may signal a confirmed bullish breakout. We also look for stocks already trading above it, which may indicate fewer upward resistance barriers.
• 200 MA (Moving Average): Breaking this barrier may confirm a bullish run, but it could also signal the run may be nearing its end, acting as a resistance barrier leading to a pullback or consolidation.
• MACD: A crossover of the MACD line and signal line is a good indicator of a trend entering positive divergence, which may lead to a bullish breakout. If the line breaks above the 0.0 zone, it typically confirms bullish divergence.

Join Our Community

Lesson 4: Fundamental Analysis

In the stock market, doing DD (Due Diligence) can be the difference between making money and losing it. You don’t want to buy the wrong stock. We always encourage researching every company you plan to invest in. But what are the key things to look for?

Let’s review some terms first:

Reverse Merger (R/M): A private company acquires a public company, allowing the private company to bypass the typically lengthy and complex process of going public. This is generally seen as a positive, as it increases shareholder value—especially if the private company has strong financials and revenue.

Reverse Split (R/S): A stock split that reduces the number of outstanding shares and proportionally increases the price per share. This is often an attempt by a company to mask a declining stock price, as the actual market value of the stock doesn’t change.

Join Our Community

Lesson 5: Trade Execution

First, you should always use streaming Level II quotes when trading. When trading, follow these guidelines:

1. Always use limit orders: Most brokers don’t even allow market orders. Limit orders let you set the price at which you want to buy and sell a stock.
2. Buy at the ask and sell at the bid: Many don’t realize that when you buy at the ask, you may be helping the stock price go up!
3. Chasing stocks: Many are so eager to buy a stock that they end up chasing it as the stock rises.
4. Use stop-losses: Some brokers don’t allow stop-losses, but if possible, setting a stop-loss at the lowest price you’re willing to lose is always a good idea.

Join Our Community