 01/05/2021 What Really Goes Into Finding Super Trades ✔️ All my best trades have these five things in common... ✔️ Not every stock will be a super winner — find out two things every trader must plan for.  2020 was a year of record profits for me.*
But not all of my trades are perfect.
Many of my trades end in a small loss or profit. But every now and again, a trade comes along that ends up being truly super.
There are a few things these super trades have in common. Not every stock will have every characteristic. But the more the stock has going for it, the better for the trade.
I've got one trade in particular to tell you about today. It made a huge move, and it might not be done...
But first, let's start with the basics. How do I define a super stock? Sponsored Ad  If you're tired of grinding your life away…
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What Super Stocks Look Like
If a stock surges 50%–100% after I identify it, I typically call it a super winner.
Think about it. The average market return is 8%–10% per year. When a stock goes up 50% in a matter of a few weeks, I think that's super!
How do I find them? In the past, I've found a few clues that appear over and over again.
But don't take this the wrong way. Not every stock I call out ends up being a super winner. No one can predict the future.
It can help to look for these characteristics in a stock you want to trade. But remember — you should always have a plan in case you're wrong. What's worked in the past won't necessarily work again in the future.
That said, let's go through the five key metrics that are common among stocks that make huge moves. Is It in a Hot Sector?
2020 had a ton of hot sectors. They seemed to flare up and burn out almost every other week.
But there was one particular sector that has outperformed all the others. No matter what happened, this sector seemed to keep running. And it was led by one stock in particular.
I'm talking about the electric vehicle (EV) sector, led by Tesla, Inc. (NASDAQ: TSLA).
TSLA was a super winner in and of itself, returning an unheard-of 740% in 2020.
But there are a lot of other stocks that moved with TSLA. Some were competitors, and others were suppliers.
Then there were stocks in semi-related fields like fuel cells, solar power, and even uranium.
Being in the right industry is a great start, but I like to look for more. Sponsored Ad ATTN: STOCK TRADERS  Let a Forensic Accountant (who's also a stock trader) show you…
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Look for Disruptive Technology
Some of the most super winners I've found have something in common: disruptive technology. Their business brings a new concept to the market that solves a big problem.
From my experience, a truly super stock solves a problem in a hot sector.
I want to highlight one stock that was a huge super winner in 2020. I was talking about when it was trading at about $10 per share. It closed the year at $73 and peaked near $76.
Beam Global (NASDAQ: BEEM) tackles one of the biggest issues facing the EV movement — charging the cars. Charging stations can be extremely expensive to build and install.
Plus, they tap into the grid — which is costly and not very eco-friendly. And after all, many people drive electric cars to be eco-friendly. But most grid power comes from burning fossil fuels. So charging an electric car isn't necessarily all that great for the environment.
Beam Global provides a solar-powered charging solution that's 100% renewable and modular. The chargers can be installed anywhere the sun will shine. The batteries hold the energy until it's ready to be used.
The company also figured out a way to generate revenue and reduce the upfront cost of installing these stations through ad placements.
In 2018, Goldman Sachs argued that EVs weren't a viable alternative. Goldman estimated it would cost over $6 trillion to build the required infrastructure. They said it was just too expensive.
Beam Global disrupted that argument.
Market momentum was on the right side too. Check Market Conditions
Even the perfect story needs to have the right conditions to become a super winner. 2020 was an incredibly bullish year.
The Nasdaq Composite doubled off of its lows. The S&P 500 ended the year up 16%, despite a massive 35% crash in March.
But the market condition alone doesn't guarantee anything. Some stocks go up in bear markets, and some stocks go down in bull markets.
A super winner can actually happen anytime, but it's tough fighting the trend. In the past, bullish market conditions have produced more super winners.
2020 has delivered dozens of super winners — so many that I had the best year of my career. My profits for the year were in the mid-seven figure range.*
Market conditions give all stocks a better chance of rising. But the real mover of any single stock price always comes down to supply and demand. The Lower Float, the Bigger the Move
The market, the sector, and the business model can all potentially increase the odds of a super winner. But nothing moves stocks like supply and demand.
Those are critical forces in the market. It all comes down to the buyers and sellers.
So before you trade, you always want to evaluate the stock's float, or the number of shares available to the public for trading. That's the supply.
If the supply is low and the demand is high, you're much more likely to see huge price moves.
It's basic economics. When the demand is higher, the price rises. When the supply is higher, the price falls.
Let's go back to the Beam Global example. The stock's float is less than six million shares.
In November the stock price had already doubled from $10 when I started buying to $20. Then the volume picked up, and it was averaging over one million shares per day. With more demand and very low supply, the price had nowhere else to go but up.
But remember: super winners don't typically happen overnight. Sponsored Ad  If I wasn't so "crazy busy…"
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How Long Should You Hold a Super Winner?
The last part of a super trade is the timing. Hold too long and you can see a green trade turn red. Sell too soon and you can miss out on a lot of profits.
While 2020 has shown us some truly crazy one day moves, most stocks don't jump 600% in a day.
When the stars align and the conditions are just right, a stock can make a 600% move. But it's usually over the course of several weeks or months.
BEEM traded under $10 for the last time on September 24, 2020. Then, 14 weeks later, it passed $75.
But that's not permission to hold and hope. For every trade you make, you should always have a plan to be wrong. I was ready to cut my losses if BEEM dropped below the 50-day moving average.
I don't hold these trades forever. I bought in the $10s, but I started selling in the $16s and $17s. I held a portion of my position just in case it went higher.
I sold more at $34 and the rest at $73.*
Taking some profits early gave me some flexibility. That way, even if the stock fell below my stop I would have still cashed out a decent profit.* But I held on to some just in case a crazy parabolic move happens.
I'm glad I did... Find Your Next Trade
There are certain traits I like to look for to find the best trades for my strategy.
But there are no guarantees. I understand that any trade can go against me. Any trade can go against you, too. There's no magic formula, but the more factors you can line up for your trade, the better.
The conditions I listed today have helped me identify winners in the past.* But the market is an ever-evolving place.
Always have a plan to be wrong. And understand that no matter how great the technology and the story, it all comes down to supply and demand.
Be super,
Paul Scolardi Editor, Swing Trade Millionaires
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*Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here.
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