馃攳
How to Trade the Dead Cat Bounce Pattern - YouTube
Channel: StocksToTrade
[0]
- I tell you what,
[0]
I love my house cat.
[2]
I've actually got several
house cats and I love 'em.
[4]
But today, we're gonna talk about
[5]
the dead cat bounce pattern
[7]
and why does a pattern to either avoid,
[10]
especially as a new or
intermediate trader,
[13]
or potentially short sell.
[15]
(upbeat music)
[22]
Hey everyone, I'm Lead
Trader with StockstoTrade,
[24]
Tim Bohen here.
[25]
Be sure to subscribe,
[27]
as well as ring that bell.
[29]
Today we're gonna be
breaking down chart patterns.
[31]
Something great to always have in mind.
[34]
But we're also doing every single week,
[36]
a YouTube Live, every Monday night,
[39]
so, be sure to ring that
bell so that you get notified
[42]
when I go live.
[43]
We talk about the hot stocks of the day.
[46]
You wanna be there live.
[47]
We engage in chat.
[48]
I answer every question,
[50]
so, be sure to subscribe
and ring the bell.
[53]
As I mentioned,
[54]
we're gonna talk about a pattern
[56]
that I think gets a lot
of traders in trouble.
[59]
And it's something that really,
I think should be avoided.
[63]
I mentioned in the beginning,
[65]
you can look to short this pattern,
[66]
but it's difficult to short
[68]
because a lot of these stocks
are very hard to borrow.
[71]
Remember, if you're not
familiar with short selling,
[73]
you need to get to borrow,
[75]
a lot of these stocks are low or float.
[76]
They can be very difficult to borrow.
[78]
So, let's talk about why I
think you should avoid it
[81]
and what trips up many traders.
[84]
So, let's get to the chart.
[86]
You'll see, this is a stock,
[88]
I mean, hey, who wouldn't love this.
[91]
This is GTBP.
[94]
The news today was they may,
[97]
and remembering low
price penny stock land,
[100]
they always talk about
may and might and hope.
[103]
But they may have a cure for HIV.
[106]
So, great news,
[107]
I mean that's the kind of news
[109]
that people like to get behind.
[111]
You can see the stock closed up 79% today.
[115]
Huge move from 30 cents to 57 cents,
[120]
closed at the high of the day.
[122]
This is the kind of stock that, I think,
[124]
traps in a bad way.
[126]
Traders, they see the news,
[129]
see the price movement and get impulsive,
[131]
they get bit by that FOMO.
[133]
They wanna get in early.
[135]
They wanna be in day one
[137]
and then, the next day,
[138]
the stock gaps down and they were like,
[140]
wow, how did I, you know, lose again?
[144]
You know, why doesn't trading work for me?
[147]
Well, I'm gonna show
you a couple of patterns
[148]
and why I think you need to back out
[151]
and think about the long-term pattern.
[153]
So, why do I call it a dead cat bounce
[155]
and this isn't my term,
I didn't innovate it.
[158]
It's an old, old, old school pattern.
[160]
But, the idea is,
[162]
and remember we're
talkin' figuratively here,
[165]
we're not literally throwing
a cat out the window.
[167]
But, the idea behind the
joke or the analogy is
[172]
if you throw a dead cat out the window,
[175]
it'll bounce, but it's
not gonna bounce long.
[177]
You know, it'll hit the concrete, jump up
[180]
and then it's right
back where it came from.
[182]
And the reason GTBT is exactly that
[185]
is up 80% today, on the one day chart.
[189]
Let's look at the one year chart.
[191]
This is even something
that could trap you.
[194]
Because now you see, stock's been choppy,
[197]
it's spiked recently,
[198]
I mean you can see
[199]
it's gone from a $1.50 to
$2.75 a few months ago,
[203]
it's gone from 75 cents to $1.75, again,
[208]
recently, about six months ago.
[210]
And you see this big
candle and this big volume.
[213]
And you think, today is the day,
[216]
has the news, has the move,
[218]
I wanna take this stock overnight
[220]
because it's making that high of the day.
[224]
Why is this my example
as the dead cat bounce?
[227]
Let's go over to that five year chart.
[229]
Now, you might not be a technical trader,
[231]
you might not be a long-term trader,
[235]
but I think you can quickly see
[237]
what the prospects long-term
are for this thing.
[240]
Now, this stock has done
reverse splits in the past.
[243]
We've done other videos on reverse splits
[245]
if you're not familiar with that.
[247]
It's a term you should be familiar with.
[249]
This stock never actually
traded at $5,000 a share.
[254]
They've done numerous reverse splits,
[256]
which is even more doom inducing
for these low price stocks.
[261]
But look at the difference,
[263]
focus on that idea.
[264]
Don't get caught up in FOMO of day one.
[268]
I don't care if there's news.
[269]
I don't care if it's up 80%.
[271]
When a stock has a
long-term chart like this,
[273]
the odds of it succeeding
over multiple days
[276]
are very, very low.
[279]
There's a lot of examples of this,
[281]
but always, please,
[283]
if you're thinkin' about
trading a stock overnight
[286]
or swing trading,
[288]
look at that one year chart,
[290]
look at that five year chart.
[292]
Be a professional, okay?
[294]
Think about what other
traders are looking at
[298]
and the biggest thing I see
so many get in trouble with
[301]
is that FOMO,
[302]
that fear of missing out.
[304]
They see the news, the see a big move
[307]
and then the next day the stock gaps down
[309]
and they can't figure out
why they're not consistent.
[312]
So, thank you again everyone.
[314]
Have you traded a chart pattern like this?
[317]
Have you traded that day
one bounce on a stock
[320]
that has been down trending
for five plus years?
[324]
Has it worked for ya?
[326]
Has it not?
[327]
Do you believe in the
dead cat bounce pattern?
[329]
I mean if you catch it early in the day
[331]
it might work,
[332]
but I think it's an avoid.
[333]
Let me know below.
[334]
Do you like this pattern or not?
[336]
Thanks for watchin' our video.
[337]
Be sure to comment below with
any trading related question.
[340]
We love answering your questions.
[342]
Also, like and share with your friends
[345]
and be sure to subscribe.
[346]
You'll be notified as soon
as our next video hits.
[349]
And if you're looking to
expand your trading knowledge,
[352]
don't forget to check out
all of our other videos
[354]
and be sure to click the trial below.
[357]
Check out StocksToTrade,
[359]
I think it is one of the best,
[361]
most rapidly advancing
softwares out there.
[363]
Be sure to check out our trial.
Most Recent Videos:
You can go back to the homepage right here: Homepage