First, let me tell you why I get excited about manipulated stocks.
Unlike established market giants like Apple Inc. (NASDAQ: AAPL) or Amazon.com, Inc. (NASDAQ: AMZN) — which struggle to have volatile moves due to their high volume and institutional ownership — manipulated penny stocks can experience substantial, rapid price changes.
They can go from $1 to $3 or $5 to $10 in a day, sometimes even in minutes!
They present a unique opportunity for traders who know what to look for…
1. Chat Pumps
Chat rooms and Discord channels are rampant with chat about different tickers.
However, identifying relevant information in the noise can be challenging.
Most people in these chat rooms are just there to follow hot stock picks from a 'guru' who is usually already in a stock and then pumps it to sell to the sheep.
I don't want sheep.
I want to teach people a process they can repeat to trade these manipulated stocks in the safest possible way.
Instead of believing what you hear in random chat rooms, just look for opportunities.
If you see a low float stock being pumped, volume is coming in, and there's a pattern — by all means, trade it.
Just have a plan and stick to it. Don't become a true believer who bag holds.
StocksToTrade's Breaking News Chat sifts through various chat rooms and alerts you to chat pumps. You can use these alerts to join in some upward momentum or avoid the stock at the open so you don't get dumped on.
Either way, staying informed of which stocks are pumped is crucial to your trade plan.
I use Breaking News Chat every morning to get alerted when a stock becomes a chat pump.
2. Sketchy Analyst Firms
Another way stocks are manipulated is with BS analyst firms that throw out unrealistic price targets.
Some of these analysts will come out with a price target of $9 when the stock is trading at $1.
It's unrealistic…
However, some people drink the Kool-Aid. They believe that the stock will go that high and end up holding and hoping.
Sometimes these analyst price targets can create a price surge we can take advantage of.
Understanding which firms are reputable is crucial so you can discern the genuine opportunities from the misleading ones.
Watch this video to learn more about trading analyst price predictions.
Again, StocksToTrade's Breaking News Chat can alert you to analyst upgrades and price targets for penny stocks and real stocks.
3. Twitter Pumps
My boy Elon has cleaned up X (formerly Twitter). And the big SEC bust of pumpers Atlas Trading has put a damper on social media pumps…
Watch my reaction to the big bust here.
But pumps are still out there.
Keep an eye on accounts that pump stocks excessively and know when to recognize a legitimate opportunity versus a potential scam.
Either way, if you trade with a plan, you'll always have a stop loss in place to cut losses if your trade idea doesn't work.
You don't have to shy away from manipulated stocks.
Instead, understand the reasons behind their movements. Knowing the "why" allows you to trade confidently and profit from these opportunities without becoming a bag holder or a true believer.
Watch my favorite podcast episode where we dig deep into the world of penny stock manipulation...
And get StocksToTrade's Breaking News Chat to keep you up to date on all the biggest market movers and the reasons behind their moves.
Have a great day everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade
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