Turning Base Hits Into Home-Run Trades

As we begin to round out another choppy month in the market, I’m happy to say that my trading fortunes have turned around. I’m finishing this week with a net profit of roughly $170,000 between my primary trading account and my retirement account.

While the bulk of that figure came after seeing some solid home-run trade on Wednesday and Thursday, with great momentum from solar stocks Sunworks, Inc. SUNW and SPI Energy Co., Ltd. SPI, I’m chalking this week’s success up to a series of smaller trades I made on Monday and Tuesday.

After last week’s frustrating start, I decided it was time to take a breath and aim for base-hit trades with less risk. That strategy paid off through the back-half of last week into this past Monday and Tuesday, with a series of smaller green days that gave me a feel for the temperament of the market and what other traders were rewarding.

Looking back on Monday, it’s clear that was the right approach. I ended up trading seven different tickers, five green and two red near the end of my day.

Part of the reason I was hopping between stocks was that I wasn’t seeing many A-quality setups. The penny stocks I took a position in, like Ampio Pharmaceuticals, Inc. AMPE and Buzztime, Inc. NTN, were seeing a lot of churn that I was fortunate enough to scalp for a few hundred dollars. Meanwhile, I was approaching higher-priced stocks like Nikola Corporation NKLA and CleanSpark, Inc. CLSK with smaller size to avoid falling into the red.

Both approaches meant I was coming away with smaller wins. But it also revealed how much more cautious the rest of the market has become since this past summer.

My trades in Blink Charging Co. BLNK on Tuesday drove this point home. I took some trades on BLNK in the premarket for about $3,000 before the bell. Once the market opened, it sold off and I went on to try some other stocks.

However, about a half-hour later, BLNK started to pop higher and I decided to take another shot at it as it started breaking above the volume-weighted average price. That strategy was one I used a lot this past summer to great effect since stocks would regularly squeeze up 20-50% once they got going. And while I did walk away from my momentum trades in BLNK with an additional $5,100, the chart completely reversed after it hit resistance at its premarket high.

Then Wednesday came and we saw exactly that kind of follow-through in SPI, and on Thursday in SUNW and The Peck Company Holdings, Inc. PECK and Net Element, Inc. NETE in the premarket. I wouldn’t have made those trades, or been as aggressive in those trades, if I didn’t have a few green days behind me to back them up and compare them against.

Despite those big green days, I still think this is a wait-and-see market. Not hot or cold, just one that requires patience and confidence the kinds of setups traders pursue. Unfortunately, that can be one of the hardest markets to trade successfully. For now, I’m going to try to keep my risk low, at least on my opening position. If I can scale into a larger position as a stock squeezes, I will. If I can’t, at least I’ll be in a position to come away from the trade with a little extra cushioning for the next one.