How To Profit From Meme Stocks Trading Frenzy

Are you looking to profit from the next meme stock to mirror the recent run of AMC, GME or WEN ?

Before you do, allow you me to take your through the recent stock market meme trend.

Are meme stocks trading a real opportunity for investors or a big distraction from more serious catalysis ?

How To Profit From Meme Stocks Trading

The word “meme” has a French root that means same, similar or identical.

A common French phrase that uses this word is “Je voudrais la meme chose” which translates to “I would like the same thing”.

From this definition, we can extend the definition of meme stock to copy cat stock.

In recent years, social media “memes” have become a source of entertainment and distraction.

The concept is about re-editing an image or small video to poke fun at someone or something.

How To Profit From Meme Stocks Trading Frenzy - Illustration of Buy and Hold Strategy vs Panic Selling
Famous Stock Market Meme | Buy and Hold Strategy vs. Panic Selling

The above stock market meme illustrates two different approaches to investing.

On the top, the buy and hold investors end up with a more luxurious boat than those who could not sustain the sell off and thus sold in panic to preserve their investments.

What Is a Meme Stock

Meme stocks are stocks that have gone through hard times and then staged massive rally because of speculative positions by bears and bulls.

The value of a stock is often derived from the fundamental of its operation as well as forward looking metrics.

So when a stock goes down like GME, you can understand it as future prospects of revenue, customer growth and ultimately profits are not too rosy.

Quite often the reason for this could be because the technology that company uses is outdated or the competition is just too fierce.

More commonly if a company sells a product that is not is high demand well that does not bode well for that company long term prospects.

Such was the case for GME and AMC stocks.

How To Profit From Meme Stocks Trading Frenzy - AMC and GME Weekly charts depicting high volatility in 2021
Super Volatile AMC and GME Stocks weekly Charts

The first one sells video games in a digitalized era where everything is available online at the fingertips on everybody.

The other one was hit by the pandemic that brought lifestyle changes with social distancing and all that ensued.

Very few people would venture into movie theaters albeit we all could have used the distraction during these trying times.

How did Meme Stock Frenzy Start ?

The description above does not address other force at play in the stock market.

And that is high level of specualtion.

You may be familiar with the more common buying speculation.

However, there is the bearish equivalent of that :

It is called short selling.

Short Selling Gone Wrong

Short selling consists of borrowing a stock from someone who has it and selling it in the open market.

Typically your broker owns stocks to facilitate transaction liquidity.

Imagine you study a company and think that its future is not looking all that good.

Your conclusion may that be for the above mentioned reason or else.

Your plan is to buy back the shares you sold at a much cheaper price later.

Then you will return the borrowed shares to the original owner.

To make it plain here is an example on how Short Selling works:

  • You borrow XYZ stock at $100 and sell it at that price in the Open stock market
  • Some time passes by and XYZ stock is trading at $80
  • You then buy it at $80 and return it to the person you borrowed it from
  • Your profit is ($100 – $80) = $20 not counting the Interest you paid to the lender

In case you are wondering, Short selling is perfectly a legal activity or investment technique.

Of course it is highly speculative.

Because what is the stock you short never goes down and instead start going up ?

Short Answer: Your Losses can be infinite.

Here is how.

High Short Interest on GME

Because you need to buy the stock back in the open market at whatever the going price is.

With your short position, the higher the stock goes the more you loose.

In the case of GME, a group of retail traders in reddit called r/WallStreetBets noticed that the volume of shorts was unusually high.

You can find the short interest on any stock using the Webull Analysis tab on the Webull App for instance.

Here is what it looks like for NVDA stock.

The data is published every two weeks along with the accompanying days to cover chart.

How To Profit From Meme Stocks Trading Frenzy - Tracking Short Interest and Days to Cover on Webull Analysis Report
Short Interest and Days To Cover Report | Webull App Analysis Report

The reddit r/WallStreetbets group got organized very quickly.

They propagated this inform through social media so that more traders could join their movement.

Their objective was to take on the short seller and force the later to covering at very high price for the stocks.

What ensued was an extraordinary rally that took GME stock from $65 to $483 in just 5 days of trading .

Basically, that was the birth of meme stocks.

Why Are Meme stocks Growing ?

Galvanized by this great success, these traders set their eyes on other stocks to duplicate the same results as on GME stock.

Remember how I used the word copy cat earlier at the beginning of this discussion ?

Now, it all make sense what has been transpiring in the the stock market meme where any stock has the potential to rally big based on short selling volume and the number of retail traders interested in it.

More and more retail traders are attracted by the dream of becoming millionaires through meme stocks.

Why ?

Well , I failed to mention that the 52-week low for GME was $3.77 prior to that spike to $483.

This means that if you had $1000 invested in GME stock from $4, you would have multiplied that by up to 120 thus turning it to $100000 in less than a year.

This is the new Wallstreet dream for many.

This is the reason why so many on social media are joining the movement on a wide range of stocks whose fundamentals doe not command such high price.

Everyone is aware of its but in the name of speculation, money is being poured into these meme stocks day in an day out.

How To Identify Meme Stocks

In case you are just now joining the band wagon or wondering how you can get started, the following sections will definitely bring those answers.

Are all Meme Stocks Equal ?

My observations have been that not all meme stocks are equal.

I have seen a number of stock spike briefly but failed to sustain the rally GME or AMC stocks have had.

Therefore, you ought to keep that in mind as you partake in this endeavor.

Where To Find the Next Meme Stock

In trying to identify stock meme, I have come up with a simple detailed video.

The video Tutorial leverages the Finviz Screener.

You will learn how to setup very simple filters to help you decipher stocks opportunity within the stock market meme niche.

Here is a Time Stamp of the video to help through its navigation:

00:00 Intro of the video

01:38 Finviz Screener for Day Trading

03:07 How to trade Gangsta Trade

07:28 Finviz Screener For Swing Trading

11:12 Finviz Screener For Meme Stocks Trading

15:05 #SAVA Stocks

Our List of Best Meme Stocks For Month To Come

You can start by creating a watchlist of Meme Stocks from the results of your screening using the above video.

Here are some of the stocks we have in our Short squeze meme stocks.

My suggestion is to create intraday alerts for them such that you ready to day trade them whenever one of them starts trending.

How To Profit From Meme stocks Trading Frenzy - Watchlist of 2021 and Beyond stocks
2021 and Beyond Meme Stocks Watchlist | #WEN #SOS #MARA #GME #AMC #SPCE

Given the large volatility in these meme stocks, my daily alerts are set at least for 3-4% moves intraday.

By doing so, you will avoid some of the fake moves these stocks are known for.

Have you noticed how new meme stocks keep popping each week recently ?

The latest one to gain momentum is Wendy’s (Ticker WEN).

Should You Buy Wendy’s as a Meme Stock ?

Wendy’s stock trades in the consumer cyclical sector.

Provided the world does not come to an end, sooner or later , consumers will resume the previous habits.

Investors may then realize this and start rotating money in other assets that the proverbial technologies stocks.

How To Profit from meme stocks Trading Frenzy - #WEN Stock chart  is breaking out
Is Wendy’s (#WEN) Stock the Next Big Meme Stock ?

WEN is still very cheap below $25 as of this writing.

The recent breakout may just signal the beginning of a bigger run .

Even with these high flying meme stocks, patience remain key.

From the above fundamentals, the short float is still below 4% though those numbers will always lag.

My current stand on Wendy’s stock is to remain bullish as long as it is able to recapture the EMA8 above $25.

If not Wendy’s as the next great short squeeze, how a bout SOS ?

IS SOS Stock Ready Join AMC and GME in Meme Stocks HOF ?

I just started the study of this very cheap stock currently trading below $4.

I will be adding constant analysis in the near future to help answer this question.

In the meantime, we are tracking it in our Watchlsit so should you.

Best Ways To Invest In Meme Stock Market

It is one thing to follow great trends in the stock market yet it is another one to divert from your main investment objective.

We can think of bitcoin or dogecoin recent rallies and the fortunes they created for some.

However, I can not help wondering if this meme stocks trading Frenzy will not end up as a distraction.

Are you Missing Out on Other Investment Opportunities ?

While you be busy searching for the next AMC or GME stocks, other investments are still present in the stock market.

How does one ensure that that there is a fine balance between the newest trends and the goals of ones portfolio ?

This is the risk many are willing to embrace just like the early adopters of crypocurrencies.

There is never a guarantee in any type of investment especially in some of these companies that are not fundamentally sound at all.

Should You Buy Meme Stocks ?

I was reading this past week on a thread of RIOT stock the story of a trader buying in highs $70’s.

The stock is currently trading around $31.

Could you imagine the emotional Rollo coaster so many are willing to submit themselves to through these meme stocks ?

How do you hold onto meme stocks that can fluctuate 50% in intraday trading ?

In the example of RIOT stock, that trader need to stock to appreciate over 140% just to salvage the initial investment.

How To Profit from Meme stocks Trading Frenzy - RIOT Blockchain daily chart
RIOT Blockchain Stock is struggling to sustain Bullish from early February 2021

An Alternative Way To Trade Meme Stocks

A less expensive strategy to get involved in meme stocks trading frency is through the use of options trading.

Most of these stocks offer weekly options that are usually very cheap before the market makers raise the Implied volatitlity.

while most traders are busy buying the stocks, you can benefit by waiting for the usual ralliees to take place.

Then realize that these rallies often fizzle.

Therefore, taking the opposite direction with cheap puts is how I have been able to day trade and scalp on GME and AMC stock recenlty.

The advantage of this strategy is that it does not ahve to take to much of your trading capital.

Also, there is not need to constantly spend time on stocks chat forums looking for catalysts to take the stock higher.

You will be surprise how much money one can leveraging volatility in options trading in this meme stock market.

CONCLUSION

We shared hw the recent meme stocks trading frenzy is sweeping the stock market.

As an investor, you will have to stay disciplined in order to avoid this recent trend and potential distraction from your main trading objectives.

As a result, we offer an alternative to this meme stock market through option trading.

In case you are a beginner trader, I strongly encourage you to consider our Option Trading Education System so that you can equip yourself with solid knowledge to help take your trading to the next level.

How To Profit From Meme Stocks Trading Frenzy

Are you looking to profit from the next meme stock to mirror the recent run of AMC, GME or WEN ? Before you do, allow you me to take your through the recent stock market meme trend. Are meme stocks trading a real opportunity for investors or a big distraction from more serious catalysis ? How To Profit From Meme Stocks Trading The word “meme” has a French root that means same, similar or identical. A common French phrase that …

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Best Intraday Trading Tips To Grow Your Account

Beginner and advanced Traders alike seek to maximize their day to day profits.

These Best intraday trading Tips will help you increase your gains while minimizing losses.

You will be able to apply them successfully into your existing trading strategies.

What Is Intraday Trading

Intraday Trading designates the time between the open and the closing of the market.

For US equities markets, intraday trading takes place from 930AM Eastern to 4pm Eastern for stocks.

MAjor ETFs such as SPY, QQQ or IWM allow for an extra 15 minutes of trading up to 415PM Eastern time.

That could be considered intraday trading hours.

The concept of intraday trading can be used in lieu of day trading.

When used in this context, it refers to a trade that the trader intends to close before the end of the closing session.

Why Is Intraday Trading Appealing ?

Stocks generally do not close at the highs or low of the day.

This means that a bullish stock can reach a very high value in intraday trading yet close well below that high calue.

Conversely, a bearish stock can reach a very low value in intraday session and find buyers towards the end of the day.

What this creates in an opportunity for traders to reach high levels of profit intrady day.

That is not the only advantage.

The other advantage is that by taking profit intraday, traders can benefit from a lower entry price the next day.

This is particularly frequent in options trading because the Theta decay will reduce the price of the options for each day that passes by.

Intraday Trading Tips - Example of Intraday Price Fluctuation on FDX Stock on April 13
Example of Intraday Trading Price Volatility | $4 difference between the Intraday High and the Closing Price on FDX stock on 4/14/21

Who should Consider Intraday Trading ?

The previous chart depicts a good example of Intraday price movement.

There was a $4 difference between the Intraday High on FeDEx stock and its closing price.

In most stock report, the recorded price is the price at the end of the day.

Thus it does not always capture the intraday highs and lows.

These variations provides a great deal of opportunities to day traders to can take advantage through stock trading or options trading.

Therefore, Intraday trading is mostly for day traders who can maximize their gains

You should know that you may be limited in a number of day trades you can execute based on the size of your account.

How To Overcome Pattern Day Trader In Small Account

FINRA has a Day Trader Pattern rule that prohibit any account with less than $25000 form executing more than 3 day trades in a 5 day window.

This can become very restrictive for some samll account traders.

How so ?

Imagine you are making a great profit on a trade but unfortunately you ran out of day trades.

Remember, you are only entitled to 3 such trades in a 5 consecutive days.

Well, most traders will not be able to cose that position and record profit.

Just to come the next day and see the profits completely wiped out because the stock has moved in the opposite direction.

There is a fix for this problem.

Call you broker and transform your account from Margin account to Cash Only account.

How To Avoid Losses in Intraday Trading

It is a well known fact that the most successful traders have mastered the art of minimizing their losses.

Contrary to popular belief, great traders often take a lot of losses.

However, those losses are small enough so that they do not impact to stay in the game.

Half of the battle of retail traders with small account is having enough money to trade the next day, the next week or the next month.

This is the main reason reason why only a small percentage of traders make it to consistently genrating profit.

Let’s examine below some intraday trading tips to help you reduce the impact of your losses.

Intraday Trading Tip # 1 | Respect the Intraday Trading Clock

Intraday trading is full with misdirections.

This means that stocks often can “fake” going into one direction and then reverse to go the opporsite direction.

How can traders keep up with such violent moves ?

Solution # 1.

What follows so important for beginner traders.

Allow me to introduce the concept of the trading clock.

These are intraday trading windows during which the market as a whole provides opportunities to make and lose money.

Intraday Trading Tips To Grow your Account - US Market Trading Clock
US Market Trading Clock

I am not suggesting that every single one of the 7000+ stocks follows this intraday trading clock each day.

However, based on my observations, most stocks have the proclivity to move according to the above table.

From the opening bell in new York at 930AM Eastern time to 11AM-11:35 am EST is the best window of opportunities to make money.

Most stock will move in this first intraday window according to the momentum generated by the thug of war between the bulls and the bears.

Dax Closing In Germany is Bullish

The 11:35AM is not just a random time incase you may be wondering.

That is the exact closing time of the German market in Europe.

It has been my observation that the last 35 Intraday trading minutes of the DAX (German main index) is often bullish and thus SPY tends to trade bullishly as well during this span.

Sideways Intraday Trading window

You do not want to get caught in an option position while the underlying stock is moving sideways.

Such is often the case between 11:35am and 2:30PM.

Hence, you will need to be aware of this and reduce the amount of contracts you are holding or simply get out of the trade.

The last 90 mins of intraday trading is favorable to setup up overnight trades or some good scalping strategies for end of the day momentum.

Solution #2

Be patient before entering your position.

This means you have to wait for confirmation on the direction of the stock.

There is nothing more deflating in options trading (and stocks for that matter) than to rush in a position just to see it turn red immediately.

The best way to apply this intraday trading tip is to set up alert.

I use TradingView for my chart study in pre-market or overnight.

The outcome of your study should provide a price level above which your are going to take a bullish trade and below which you re going to trade a bearish position.

How To Maximize Gains In Intraday

After you have mastered how to minimize your losses, the next step is to apply yourself into maximizing your gains.

For that, the best practice you will adopt is the trailing stop .

In a few words, when you are making money on a position, the trailing stop enables you to track your profit and only allow a small percentage of it to go away once it is acquired.

That is where the word “trailing” comes from.

The video below explains step-by-step how to setup your trailing stop on E*TRADE platform.

Video On How TO Use the Trailing Stop Feature on Power E*TRADE

Scaled Exit Technique

You can make usage of the trailing stop to implement the scaled Exit technique.

This means that you do not close all your contracts (or shares) at once.

Rather, you can setup (in advance ) to take partial profit at a predefined profit level.

Below is a suggested setup I use in my Coaching sessions.

Example: “N” contracts @ 0.50 || N>=3

EXIT # 1. STC 30% of contracts @ $1.0 [100%] // Adjust these settings to your Risk Tolerance

EXIT # 2 STC 30% of contracts @ $1.50 [ 200-300%] // Adjust these settings to your Risk Tolerance

EXIT # 3 STC 30% contracts @ $2.0 [300% +] // Adjust these settings to your Risk Tolerance

10% {Whatever left} of contracts left as Runner Especially if Time Left before Expiration date

Stay Disciplined and Respect your Stop Loss

Above all, they key into intraday trading success is to prepare your trades with a plan.

Then stick to that plan.

Do not get distracted by the noise the market throws at you in the form of social media banter and/or pundit rhetoric on the television.

Stay disciplined by respecting your stop loss.

It is okay to get out of a trade quickly when it goes against you.

You can always re-assess if situation changes intraday later.

I cannot emphasize enough that beginner traders need to focus on saving their buying power.

Because Staying alive to fight another day is already a success by itself even though it does not immediately translate to monetary gain.

Bonus Tip

Learn How to Use the Option stock Chart to improve your entries.

During intraday consolidation, use the Lowest price of the consolidation range as your Limit Entry.

What Are Good Some Intraday Trading Strategies

The best intraday trading session is to scalp by riding a the short term trend of a stock.

Scalping can be very profitable intraday for options traders because the duration of the trade is short enough for time decay not to be a factor.

You can get in on a trade with the predefined objective to get X% profit and then immediately close your trade once your goal is reached.

In Options trading, X% can sometimes be a very big number, 50%, 100%, 200% or even more.

Some recent meme stocks are notorious for intraday rallies.

In case you may not have been following the recent short Squezze Saga, here are some of the most famous mem stocks:

  • #AMC stock gained 100% intraday recently the day after it sold off -30% intraday.
  • #GME stock started an extraordinary short squezze from $40’s to over $450’s then a fall back to the $40’s before breaking upward again
  • #BYND is currently in the middle of a bullish uptrend and provides plenty of intraday trading opportunities

Aside from those exceptional trending stocks, here are very reliable technical setups that you can use to take advantage of intraday trading strategies.

Stock setting Brand New High of the Day

The intraday new high of the day is a good entry for a bullish trade.

One reason for this is that such stock will attract new traders who want to buy it.

It is commonly known in the trading community as F.O.M.O or Fear of Missing Out.

In order to avoid false positive, I use the 15 minute chart to ensure confirmation on such breakout bullish setup.

Here is at he perfect illustration on NVDA recent chart where this strategies worked perfectly on multiple days.

Intraday Trading Tips To Grow Your Account - NVDA stock goes higher after Intraday New High of the Day on 3 Consecutive Days
Bullish Pattern on NVDA Following Intraday New Highs on 3 Consecutives Days

This example brings up a good Intraday trading Tips I often successfully use.

Stocks tends to repeat intraday patterns.

This means that if on Monday or Tuesday you identify an intraday pattern on a chart, look for it to repeat the next day.

This is the easiest way to forecast short term trends and profit from them.

Stock putting in New Low of the Day

Similar to the new high of the day, the intraday new low of the day is a good tip you can apply as well.

This time on the bearish side.

When a stock is going down, it often does it at a faster speed that when it is going up.

For options traders, time is of great importance .

Therefore, trading intraday on new low of the day can be even more lucrative for traders who can master this strategy.

I created a YouTube video to help traders identify this bearish setup using a very simple indicator.

From Upper Bolinger Band to Lower Bolinger Band

tbd

Crossover of EMA8 above EMA20

Crossover of EMA8 below EMA20

tbd

Which Are The Best Websites For Intraday Tips

If you are looking for Intraday trading tips, how about you start with the institutions that actually move the markets.

Follow The Smart Money

There are more and more services that provide insights on where the Smart money is going.

These come in the form of Live Intraday Options Flows you can easily follow to make money.

I have been using the very first one to offer such Intraday trading Tips since 2017.

It is called FlowAlgo.

The results tends to be very spectacular with very high profit as depicted in my FlowAlgo Playlist videos.

Live Intraday Option Flow Services

Since 2017, other competitors to FLowAlgo have surfaced.

My Top 10 FlowAlgo Alternatives article provide and in depth view on how to choose the most convenient service to meet your trading needs.

Top 10 Flow Algo Alternatives

CONCLUSION

These essential Intraday Trading Tips are sure to help you avoid some of the pitfalls many traders faced daily.

After you master them, you will once step closer to consistently grow your trading account.

Should you desire to further take your trading to the next level, may I suggest you check out our 10-Baggers Trading system that has been helping many traders in our Discord Channel.

It can help you too starting today.

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