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New Traders: Here's How to Find Morning Panic Dip Buys - YouTube
Channel: StocksToTrade
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- Today we're gonna be looking
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at one of the most repeatable,
consistent patterns
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that I want you to focus on,
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especially if you've got a small account.
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Okay, many of you might be here
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looking for ways to build your account
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and this pattern, I think,
may be one of the best
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for that small account to
really get you that point
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where you don't have
a small account any...
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(energetic music)
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Hey everyone, Lead Trainer
with StocksToTrade,
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Tim Bohen here, be sure
to like, subscribe,
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share with your friends and ring the bell
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to be notified any time
we post a new video.
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We do so much here, we
post long-form podcasts
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with me and Stephen Johnson,
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Matt Monaco's doing short-form podcasts
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with him and Jack, and Kyle.
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We do these how-to
videos, we go live a ton.
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There's all of this free
information out there
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and, the big thing is,
a lot of it's timely.
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Especially the podcast,
especially the live stuff,
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and I want you to be notified ASAP,
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so if we're talking about an afternoon rip
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or a morning dip, or all of
these patterns we look at,
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you can jump on there
and learn in real time.
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So, ring that bell and
share with your friends.
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All right, so, what is the
pattern we're looking at?
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It is the morning panic dip buy.
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This is a pattern that has existed
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as long as I've been trading,
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so I'm gonna give you the...
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But a lot of traders talk about it.
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You'll hear morning panic dip buy,
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morning panic dip buy,
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and a lot of the times, there's
a little bit of confusion,
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because one of my favorite patterns,
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that I talk about a lot, is
that dip and rip pattern.
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So, keep in mind, I've done a bunch
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of videos on the dip and
rip, you can check those out,
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but I know the terminology is the same,
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but the setups are very, very different.
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I mean, even though the
terminology's a lot alike,
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they're almost the exact opposite.
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The dip and rip is a buying
into strength pattern.
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The morning panic dip buy is a
buying into weakness pattern.
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So, check out the dip and rip videos.
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Today we're talking morning panic dip buy.
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So, what are the things
we're looking for in this?
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I'm gonna bring up a recent example
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of maybe one of the best
setups, best tickers, for this.
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CYDY, I'm bringing up a chart,
a one year, one day chart
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here from 2019, and you can see this stock
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has gaped up many times,
cracked many times,
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ground back up, cracked,
over and over again.
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So that's what's great
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and this is a theme
you'll hear me talk about,
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pretty much every pattern,
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is your stocks have memory, I
know that sounds really weird.
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Ultimately, it's the
humans that have the memory
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that makes the stocks do
things, but the concept is,
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these tickers make the same
moves over and over again,
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and stocks that have tended to
grind up for days and weeks,
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you'll drop 50%, bounce,
and then fade late-day,
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which is what you're looking
for in morning panic,
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tend to do that over and over again,
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and I know I've got a
one year, one day chart,
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I'm gonna zoom in here,
but I think you can see,
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if you're familiar with
candlesticks, which you should be,
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if you aren't check out
the SteadyTrade podcast,
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we talk about a lot of candlestick books
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and we also do a lot of
videos on candlesticks.
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So, if you're day trading,
if you're short term trading,
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you need to know what
candlesticks look like
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and, again, if you're
well-versed you can look at this
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and be like, okay, I see that.
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In April, Tim, this thing dropped 50%
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then ground back up, as recently as July,
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which I'm gonna focus on,
geez, look at that candle,
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thing's dropped from 10 to below five,
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like a 60% drop before bouncing.
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So, these stocks that
make patterns in the past,
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tend to repeat, and repeat, and repeat.
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All right, that being said,
let's talk about the criteria.
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What are we looking for?
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We're looking for a stock
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that has been steadily up
trending for days or weeks,
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and I'm gonna show you an example
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from just a couple weeks ago.
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So, you can see CYDY had
been basing in the threes
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for weeks, almost even months,
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then we start to get this perk,
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and then we start to
get that grind action,
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and what I want you to focus on is, again,
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back to candlesticks, notice
what's happening with CYDY.
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Everyday for one, two, three, four,
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five, six, seven, eight, this is the key,
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this is what I think
a lot of traders miss,
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is they might be looking for stocks
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that are green multiple days in a row,
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but look at what CYDY is
doing everyday for a week.
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Gaps up, closes at the high of the day.
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Next day, gaps up, close at the high day.
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Next day, gaps up, close at the high day.
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Okay, I won't repeat myself eight times,
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but you can see that in the candles.
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Now, yes, on this day, it didn't close
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at the high of the day,
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there's a little bit of a wick there,
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but it closed very near
the high of the day,
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then what did it do, gaped up again.
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So, that's what you're looking for.
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Now, these are plays
that you need to stalk.
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Stalk, like S-T-A-L-K, I know
I've got a Midwestern accent,
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you might not get that,
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but these are plays
that you need to watch.
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Day, after day, after day,
what you're looking for
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is exactly this price action.
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That gap up, close near high,
gap up, close near high.
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Then, where the magic happens is,
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you know that there's all these buyers.
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Everyone's invested, everyone
thinks CYDY is going to 20
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or it's going to 200, I'm sure
if you were reading the news
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on June 29th, when the stock hit 10,
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and closed near the high of the day,
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probably everyone was saying 100 incoming,
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200 incoming, all this madness
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we see on the internet these days,
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but if you were a smart
and informed trader,
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you recognize that this stock
is probably over extended,
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it can't gap up and close
at the high a day forever,
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and at some point it's gonna
pull out, shake them out,
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and that's where your
opportunity comes in.
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So, now, this big day, that's
what I'm gonna focus on,
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on the 30th, now remember,
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CYDY's done this four times this year,
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but I'm gonna focus on the 30th.
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So, let me jump into
an intraday chart here,
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we'll zoom in, one month, five days,
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what I like to use for an intraday,
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and let's zoom in on that day,
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and we'll get to work here.
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So, now you can see what happened.
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Notice, stock gaps up, yet again.
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After pinning the high of the day.
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I mean, this is an OTC
stock, which are the best,
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that's one thing I want you to look for,
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OTC stocks are the best morning panics,
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because of this fact that
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it's mostly uneducated
traders trading these things,
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unsophisticated investors,
they're all scams,
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but that's why OTCs
becomes the best dip buys,
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but look at that close the day before.
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Just a ramp, vertical move,
pins the high of the day.
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Then, since it's an OTC, remember,
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OTCs do not trade in after-hours.
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Please ignore every single
clown on the internet
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that tells you OTCs trade
in after-hours, they don't.
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They do not trade in after-hours.
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They can trade in pre-market,
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but they're usually very, very illiquid,
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so most of the time they're
in ignore in pre-market,
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but there's a little tip for you.
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There's so many new
traders that think they see
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them trading after-hours when they don't.
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So then, what do we get on the 30th,
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the day we're focusing
on here, another gap up.
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Beautiful, so now, you're like, okay,
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I've got the vertical move the day before,
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I got another gap up, it's up
seven, eight days in a row,
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and went parabolic in the afternoon.
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I'm gonna wait, I'm gonna stalk this play,
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and I'm gonna wait for it to panic,
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and I don't know if
there's a better example
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of a panic than CYDY on June 30th.
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You can see three five-minute
red candles in a row,
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that tells you that the
stock's starting to get weak,
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it takes out the low of the day,
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and goes from 925 to a low as four.
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That's a 50% drop in 15
minutes-ish, roughly.
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That's what you're looking for.
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That's a true morning panic.
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One of the things I think I see a lot
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of newer traders confusing is,
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their looking to dip buy stocks
that are 5% down on the day.
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No, that's not a morning panic dip buy.
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A morning panic dip buy
is 30, 40, 50% or more.
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I've seen some of these
OTCs drop 70% in one day.
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The bigger the drop, the
better the opportunity.
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So now you're like, okay, Tim, I'm ready.
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I saw it drop, it
cratered, how do I enter,
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how do I approach this trade?
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Now, one of the biggest
things I want you to focus on,
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especially as a newer trader,
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and this is where new
traders get tripped up,
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you have to look for some basing action.
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I don't care if CYDY's down 50%.
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It might go down 70, it might go down 80,
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it might go down 90, you
can't try and guess a bottom,
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and if anybody tells you morning
panic dip buys don't work,
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it's another thing I hear that...
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There's a lot of stuff on the internet
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related to trading that
drives me nuts but,
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this is one of the ones
that drives me nuts,
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that morning panic don't work.
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It's because people are
trying to guess the bottom.
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Just like when I talk about
short selling these big movers,
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it's the same idea.
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One of the reason so many
traders blow up shorting,
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they're trying to guess tops.
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So, get it out of your
head trying to guess tops,
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if you're short, or guess
bottoms when you're long.
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Let the chart tell you,
and with OTC stocks,
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you can really take
advantage of level two.
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Now, I don't have a live
replay of level two,
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we'll make a point to do that in a video.
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The only bad part's,
I gotta catch it live,
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you can't replay level two but,
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if you were watching CYDY on the 30th,
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I'm confident, once it dropped
down into those mid-fours,
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you would have seen some size
start showing up on the bid.
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I'm gonna get a little into
the nitty gritty of level two,
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as always, we've got a bunch
of videos, the podcasts,
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we talk about level two a lot.
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So, if I throw out some jargon,
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remember all these other videos we have.
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So, what you would've seen
is some size coming in,
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supporting the bid, as
we say, so the bid side
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would have been way
bigger than the ask sides,
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and then you would see
the bids start to lift.
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What that means is the bidders
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are starting to push this thing up.
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Then what I want you to look for
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is that first five-minute green candle.
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As I always say, with all of these setups,
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nothing's guaranteed,
okay, so, I wanna be clear.
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Just 'cause you see the level two lifting,
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and a green five-minute candle,
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doesn't mean it's guaranteed,
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but it increases your odds of success.
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So you wait for that first
green five-minute candle,
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you look for the level two to
lift, that's where you attack,
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and then you risk the low of the day.
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That might be the most
important point of this set up.
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Get it out of your head that
this stock can't go any lower.
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When you're morning panic dip buying,
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you have to risk the low of the day.
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You cannot risk disaster,
because if the low of the day...
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After this thing drops 50%,
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if it takes out the low of the day,
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it's getting ugly really fast.
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Stock might get halted,
might get de-listed,
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anything could happen.
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So, you can see, right there,
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is my first five-minute green candle,
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it's also the biggest
volume candle of the day.
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So, again, that's how I know.
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You might be like, well, Tim,
if you don't have a level two,
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how do you know the bid was lifting?
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Look at that volume candle, 5
million shares in one candle,
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which was also the low of the day.
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So then you're buying that lifting area,
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let's say hypothetically in the 560s,
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you risk the low of the day,
stock spikes as much as $2.50,
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within a matter of minutes.
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Now, a couple more things,
have realistic expectations.
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This is still a sketchy OTC stock
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with a history of panicking,
you don't get greedy.
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So, let's say you buy
the 560, you buy the six,
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and then you get this parabolic candle
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up to the sevens, the eights,
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you take your profits and you move on.
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Because what you're trying to do,
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especially as a new trader
growing your account,
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you're just trying to
take singles and doubles,
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singles and doubles, and all of a sudden
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you're $1000 account's 15.
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It's 15, it's five; it's five, it's seven.
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All of sudden it's $25,000 and one dollar,
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and you're over the PDT,
which is everybody's goal.
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You're only gonna do that
if you minimize your losses,
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on morning panic dip buys,
risking the low of the day,
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and taking singles.
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'Cause, again, the stock faded all day,
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and then the next day gaped down.
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So you gotta be very,
very careful with these,
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and then you can see, in
the coming days and weeks,
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it went even lower.
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So, if you're disciplined, if
you can follow a trade plan,
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if you can look at the level two,
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if you can stalk these
plays for days and weeks,
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have a defined plan,
take singles and doubles,
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this is one of the best setups out there.
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Now, there isn't one every day.
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That is one thing that
I get asked a lot about.
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A lot of these, you gotta be
waiting for days and weeks.
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But when they come,
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they're some of the
best repeatable setups.
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So just keep that in mind.
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We might only get one a
week, maybe only two a week,
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but if you know what to look for
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and if you're prepared, you can nail them,
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and I think one of the
best ways to be prepared
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is to check out the SteadyTrade team.
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One of the reasons I remember this stock
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is I was doing a webinar
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at the exact time that
this thing panicked.
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We were talking about
it in the live webinar,
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in the SteadyTrade team,
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and we walked right through it.
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We were talking the level
two, we were talking
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that first five-minute green candle,
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which is a technique that I teach a lot,
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and go over a lot, that's good way
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to detect a shift in momentum,
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whether to the up side
or to the down side,
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and then, the great thing is,
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everyday twice a day,
we're doing those webinars.
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Huddy's helping me out with webinars,
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I believe, he might have shorted this,
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if I remember right, I mean,
it's his kind of panic.
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I'm more of a long-biased trader,
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but you can obviously see,
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there's short opportunities
on these OTCs, too,
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when they break the low of the day.
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So, that's the best way,
with over 2000 webinars,
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everything recorded, everything live,
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you get to ask questions, I
answer every single question.
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Every morning, every afternoon.
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I think it's the best
way to learn trading.
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So, let me know in a comment below,
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have you traded morning panic dip buys?
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I know a lot of new traders
get tripped up on this a lot,
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because, two biggest things, I think.
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The two biggest thing
is they're not waiting
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for a true panic, like, real.
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I'm not talking, like I
said earlier, a 5% down.
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I want 20, 30, 40, 50, 60, 70,
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and then the other biggest
thing that trips them up
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is not risking that low of the day.
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These are the worst of the worst stocks.
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They can always go lower,
I want you to know that.
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All right, everyone, have a great day,
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we'll see you on the next video,
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and, again, like I
said, drop me a comment,
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let me know how you've done
on morning panic dip buys.
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