I have been carefully following the Ebola stocks for the past 5 weeks and I wanted to explain how I traded the Ebola penny stocks. Two of the best Ebola-related stocks I have found are Lakeland Industries Inc. – (LAKE) and Tekmira Pharmaceuticals Corp. (TKMR). Besides these, there are a few others like BCRX, SRPT, and NLNK.
Even though these aren’t technically penny stocks, I consider these types of stocks comparable to penny stocks because they are quite volatile and therefore have the potential to make huge percentage gains quickly, just like penny stocks. Even if you only can afford to buy 100-500 shares of these stocks, you still can make quite a big amount of money in a short period of time when you know what you are doing.
As a trader, you need volatility in order for a stock to get to your target exit prices. That is why you need to make sure that the stocks you trade are trading have millions of dollars of volume per day. Notice I said dollar volume and not just millions of shares. Sub penny stocks or low price OTCBB penny stocks may trade tens of millions of shares per day but if the stock is only $.0001, $.001, or $.01, this won’t amount to anything. If they aren’t trading big dollar volume, and most lower-priced penny stocks are not, you need to ignore them entirely.
A lot of traders are unsuccessful because they try to trade these sub-penny OTCBB or pink sheet stocks that are trading less than $100,000 of dollar volume a day. This is a bad idea but the 500-1000% gains that these stocks sometimes make, seem to attract uninformed traders just like a casino attracts degenerates. Unfortunately, they find out the hard way that these stocks are a losing proposition.
On Monday 10/01/14 there was more news about Ebola affecting people in the U.S. and the stocks started to break out big time. I bought 5000 shares of LAKE at $9.00 anticipating a decent size move to the upside. Although you never know exactly how far a stock will go, by taking each trade with the same plan and staying on course, occasionally this results in some huge “home run” trades. You never should be expecting a home run because that is just asking to get burned (due to greed), but of course when they occur on their own, it always a good feeling.
This is what happened with LAKE this week. The stock continued higher and on Tuesday the stock had some follow-through. I decided to hold overnight and I was greeted with a big gap up to $13.00. I immediately sold off 2000 at the market open just to play it safe since I was already up to $4.00 per share. That day the stock literally exploded and traded all the way up to $19.75.
Although I knew it may have more room I decided to lock in another 2000 shares at $17.23 because greed is a big reason why a lot of traders fail. I held 1000 shares overnight because at that point I was sitting on a nice big profit and therefore willing to accept a literal more risk for a chance to get paid even more on the probable gap up. On Friday the stock traded all the way up to $22.00. Because I don’t look to pick tops, but rather consistently profit off of predictable patterns, I sold my remaining shares at $20.31. This was a 100% gain on the last 1000 shares!
The beauty of this trade is that I literally knew it was going to occur and I even told my readers about it in an email on 10/01/14. The patterns are real and the money you can make is as well. You just have to follow a plan and utilize a trading system that helps you identify the optimal times to buy and sell.
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