in today's episode we're going to do a deep dive into penny stocks I'm going to walk you through what penny stocks are how to find the best penny stocks to buy where to get in where to get out and the strategy that I've used to find consistency everything I share with you today comes from my own experiences trading the market as you may know my name is Ross Cameron I turned an account with less than $600 into more than 10 million dollar in verified and audited profits and I did a lot of that trading low price stocks I want remember find you as always my results are not typical but my experience has put me in the unique position to share with you not only what is working in today's market but where retail Traders like you and I still have an edge as you may know I'm in the middle of a small account Challenge and because we crossed over 10,000 new subscribers I reset my account back to 1,000 bucks so today is day one of trading with $11,000 and today I'm going to buy a penny P stock let's Dive Right In and jump on the screen share I'm about to buy 5,000 shares of a penny stock right now that is up nearly 70% on the day with over 33 million shares of volume this stock has news it is moving higher and in fact it is one of the leading percentage gainers in the entire market so I am now in the trade with 5,000 shares but hold on let's step back for a second I think we need to play a little catchup before you could fully understand why I chose that stock why I got in at 20 cents a share even though it's already up 70% on the day I need to walk you through how penny stocks work because they are not like regular stocks this is a beginner's guide to trading penny stocks okay so penny stocks officially according to the Securities and Exchange Commission are stocks under $3 a share I think it's kind of funny that they call stocks under $3 a share a penny stock because from a literal definition a stock trading at $1 or $150 or $2 is not a penny stock a penny stock should literally be a stock that is priced less than a dollar so that would be my traditional definition of a penny stock but the official definition is that any stock under $3 a share is considered a penny stock by Regulators so since I focus on trading stocks between a $150 and 10 and as high as 20 I am from time to time trading well the official definition of a penny stock now one of the big differences between stocks above $1 and Below $1 is something called The Tick so a stock above $1 and this is going to make a lot of sense to you will trade down to the minimum of one penny spread the way this works let's jump jump onto the Whiteboard is a stock at $150 could be $150 on the bid and a151 on the offer every stock at all times has a bid and an offer when people talk about the price of a stock usually they're referring to the last price which is the last order that went through but all stocks have a bid and an offer so in the case of any stock over $1 the minimum spread the tightest it could ever be is one penny right one Penny right just like that cuz you can't have a stock that trades $1.50 and half a penny or something like that by a dollar well $150 and 3/4 of a penny that would be Insanity right yeah it would be and yet what's Wild is that penny stocks trade down to the one 100th of a penny it's true so let's look at the screen share if we look right here you will see that this stock is actually trading there's four uh DE after the decimal point there's four characters it goes 4714 so if the stock only went to the tenth of a penny it would be 471 and it would go 471 472 473 474 so on so forth but it actually goes down to the 1 100th of a penny so this penny stock right now is trading with a spread of0 4714 by 4719 this is pretty wild and so something that I'll share with you is that for a stock to go from $1 to A110 how much does it have to go up 10 cents a share right and how many pennies is that it's 10 pennies and so there are actually just 10 increments between a do and A110 there's 101 10 10 2 103 etc etc until you get to $110 what about a stock that's at 90 cents a share 90 cents to $1 a share well how many pennies is that it's 10 cents the same but it is actually 1,000 increments and that's because each penny can trade down to the one 100th of a penny so you do that 10 * 100 * 10 is 1,000 that's 1,000 lines but you get the idea so what that means is that typically penny stocks will not move as quickly between 90 cents and a dollar as they will once they cross over $1 a share so a stock will move infinitely faster from a dollar to $1.50 than from0 50 to a dollar 50 cents to a dollar is oh my God so you've got a th000 that's five th000 increments of price0 50 cents time 100 to the 100th of a penny that's a lot of resistance it has to move through before it can hit $1 but from $1 to $150 is only 50 price increments so 5,000 versus 50 that's insane and that's the difference when a stock crosses $1 a share okay so I prefer stocks over a dollar a share because they move FAS but a lot of Traders do gravitate towards these lower price stocks for the obvious reason that they're cheap they're affordable and I understand because I fell into the same category and I was thinking the same way when I began trading for me it actually began with a friend in high school who made $116,000 now this was an incredible amount of incredible amount of money I'm not going to date Myself by just telling you when I graduated but it was long ago enough that this was was a lot of money and with the $166,000 he bought a used Nissan Pathfinder he bought a arcade machine he had a big screen TV and a fantastic stereo system in the basement of his mom's house this kid was living the life so when my friend Ben made that $16,000 he did it trading a penny stock and he had not a lot of money but he bought a lot of shares of a low price stock and it went up a ton so when I got into the market when I was in my 20s I didn't have a lot of money so I natur assumed I should buy penny stocks it worked for Ben it'll work for me so what I started doing was Googling penny stocks to buy and invariably I ended up finding a lot of these websites that were promoting pumping different penny stocks most of these website owners were most likely either compensated directly by the company for promotional campaign around the penny stock or they were actually holding shares of the penny stock see secretly and as soon as it starts to go up they're unloading and they're selling so one of the things that I learned early on is that penny stocks can be very risky but it's also true that not all penny stocks are exactly the same so let's talk a little bit more about the different types of penny stocks first of all you have penny stocks that are listed on the NASDAQ and the New York Stock Exchange now what's interesting here is that both exchanges require companies to keep their stock priced above $1 a share in order to maintain compliance that's the minimum price and yet you've probably seen on many days including today me trading a penny stock that was priced less than a dollar but it's listed on the NASDAQ how does that work well just because the stock dips below a dollar a share doesn't mean the company is immediately banned from the exchange they have a period of time in order to get their price back up above $1 so the stocks that are listed on the exchange that are also penny stocks generally these are companies that used to be priced higher but have declined in value they've gone through a period of of struggling and the hope for investors or Traders like myself is that it's a turnaround story this is a stock that's about to turn around and will no longer be a penny stock however if they are not able just through the merits of being a better company get the stock price back above $1 a share they will do what is called a reverse stock split let me show you on the Whiteboard what that looks like so you have a stock that's maybe ipoed at $10 a share or something like that and it declined in price all the way down to let's say 20 cents all right it's 20 cents a share it is no longer in compliance and they can't get those stock to go higher because it's just not a good company and so they want to maintain their listing on the New York Stock Exchange or NASDAQ so what they do is a uh 10: one reverse split and the next day the stock is priced at $2 a share now the chart doesn't go like this well it wouldn't go all the way up there the chart doesn't jump back up to $2 a share the chart stays exactly like this except this changes from 20 cents to $2 and this of course goes from $10 to 100 so the whole chart gets adjusted when a reverse stock split occurs now stock splits can happen both as reverse splits and traditional splits a traditional split is when $100 stock becomes 10 the reverse split is when the $10 stock becomes 100 so here you have what is very common the stock does a split it goes up to $2 and then the decline can continue and then they might do another split it goes down to 20 cents again and they do another split another 10 to one split and now this is $2 and this over here becomes ,000 so the stock chart keeps essentially going lower and lower and lower so with many penny stocks it feels like there is no end to how low they can go which makes it pretty risky and you do not want to be a bag holder a bag holder is someone who's holding and hoping it's going to turn around but they can keep going lower and lower and lower they make it so it doesn't go to zero there's a new low a new low a new low but something else happens when these splits take place the number of shares available at trade changes so let's just say you were holding 10,000 shares of this stock at 20 cents a share and the next morning you log in and it's at $2 you'd be thinking oh my gosh I'm up 20 grand this is awesome and then you realize wait a second I'm not holding 10,000 shares anymore I'm only holding a th000 shares and that's because that's the trade so you're still holding the same dollar amount value of stock but the number of shares have gone down there's a relationship in trading called well it's not just in trading but supply and demand Supply in trading is the number of shares available ailable to trade and this is called the float so when a company does their initial public offering you have the float and from that point forward that's the number of shares available to trade on the demand side we have a stock that has news as the stock I traded today had we have a stock that is um up you know 50% or more this is an indicator of high demand you have a stock that has super high volume High trading volume is an indicator of high Dem demand you have a stock that's priced between you know 10 cents and and $20 a share this is a price range that's going to be popular among retail Traders when you have all of these characteristics of demand you have high demand combined with a limited level of Supply so a a penny stock that may have initially had a float of 10 million shares when they first ipoed after the first split the number of shares goes down to a million and then after the second split the number of shares goes down to 100,000 and all of a sudden you can have a massive imbalance between supply and demand and that's how a stock goes from 20 cents to 40 50 60 cents a share maybe even higher in fact we just yesterday saw a penny stock that went from about 15 20 cents a share I'll show you the chart in a moment all the way up to over $1.50 and it happened within about an hour this is an incredible move an incredible opportunity and it wouldn't happen if it weren't for this imbalance between supply and demand okay so it's important to understand that the penny stocks that I'm going to choose to trade are stocks that are listed on the New York Stock Exchange or NASDAQ that started at a higher price but then began a long decline down typically some of the best penny stocks to trade will be stocks that had a series of reverse splits which made the level of shares available to trade the float very very small which means on that one day that the company finally comes out with great news the stock can explode but that's not the only type of penny stocks that you could trade we also have what are called OTC stocks this is the over-the-counter Market OTC stocks are much much riskier for for me in my opinion and it's not something that I want to trade if you saw the Wolf of Wall Street movie the type of penny stocks that they were in well pushing on people were pink sheet stocks which is the lowest tier of the OTC market the OTC market is actually broken down into tiers uh which does help you better understand the level of risk involved with trading them the OTC best Market these are the stocks that face higher Financial standards and they have to demonstrate compliance on multiple fronts then there's the OTC Venture Market Venture market stocks have to be priced at least at one penny which you know you think one penny is setting the bar quite low but remember when I told you a stock can trade down to the 1/100th of a penny that means in fact a penny is not the lowest price of stock a go to the lowest price of stock a go to would be literally just one/ 100th of a penny this is called a trip zero stock and it's called that because they're one 23 zos all right so that's the very worst so the OTC Venture Market well hey this is not so bad the stocks they have to be at least one penny a share and they can't be in bankruptcy we often see uh NASDAQ and ncy listed stocks that go into bankruptcy when they go into bankruptcy they get moved right to the OTC market and they go to the pink she Market which can be a stock that is in bankruptcy so sometimes you'll hear about a stock that's in bankruptcy that people are still actively trading and it can be confusing H how do you actively trade it well the OTC market will ows these companies to continue to have their stock listed and people can continue to buy and sell in hopes that maybe the company will come out of bankruptcy the problem with that is that a lot of times the restructuring negates any investment or value of shareholders so shareholders usually lose when it comes to um bankruptcy but in any case the bottom of the OTC market is called the pink sheets uh the open market this is the rest of the OTC stocks that don't meet the criteria for Market or Venture market and one of the problems with pink sheets is that these companies do not face the same financial reporting requirements certainly as the Venture Market or the best Market but not even close to a NY or NASDAQ listed stock the problem here is that the true ownership and the true profitability of a company may not be clear to a potential investor and that's why why those companies have been used in the past as vehicles for pump and dump schemes and that's something that we want to avoid so if we look at the next slide this is an example of a stock I would never ever trade this is a trip zero stock it is the very bottom of the barrel and you can see that this is a stock that the chart is not even valid it it's just sideways but you could also understand why if someone owned you know a billion shares of this stock at Point Let's just you know do the math here on the Whiteboard if they owned it at 0.001 and then they were able to sell it at you know 0.1 all of a sudden like that you know they're making a huge multiple and and that's where there's a lot of profit so this is the problem with these low price stocks is that people will buy a ton of shares and even just a small move they can make a lot of money which means when they do a pump and dump they only need to get the stock to go from 01 you know even even just from there to 0.00005 it's up 500% off the low you know this is a this is a move that could be making someone a lot of money all right so you're never going to see me trading a trip zero stock trip zero stocks we don't touch them a sub penny stock is a stock price below one penny a share I'm not going to trade these either these are stocks they're below a penny so on the level two where the price is going to be 0 two zos and then you know 03 by 004 something like that or you know it could go down to the 100th so I'm not going to trade stocks like that either these are not going to be stocks that are listed on NASDAQ or NY at this point when they're below a penny they get delisted and they get pushed to uh the OTC market so we're not going to trade those the type of stocks that I'm willing to consider trading the type of penny stocks that I'm okay with our penny stocks that are priced generally well it's got to be a one penny minimum for me but generally 10 cents or higher is kind of like my minimum cut off and the stock has to be listed on the NASDAQ or the New York Stock Exchange those are steps that I take to reduce my risk because here's the deal I want to be able to make money I'm a Hunter of volatility I want to trade something that has the potential to go up 50% 100% or more but I don't want to risk losing everything I've put into the trade so the way I do that is by buying stocks that are liquid liquid means I can easily get in and I can easily get out without losing a lot of money so if we jump back onto the Whiteboard or rather the screen share let's look at this trade from this morning okay so I'm in with 5,000 shares this is a stock that is listed on the exchange it's not an OTC stock so that's that's great that's the first thing we can feel good about and it's priced at about well 20 cents a share now as you can see right now I'm not showing or displaying the four decimals and that's why it actually looks like it's AC cross Market it's 22 Cents by 22 cents but that's just because of rounding I choose not well in this case I chose not to display all four cents for the beginning of this um episode I end up showing it to you a little bit later in this uh clip which you'll see in just a moment okay so the reason that the way I was able to select this stock was because I'm using a scanner which you can see right here this is my penny top Gainer scanner and it is searching the entire market for penny stocks that are moving up more than 10% that's just the minimum cut off for me I want to see that the penny stock is moving up at least 10% because that for me indicates that we've got what were we looking for a high level of demand now now certainly up 50% is better my Approach is that I want to focus on the penny stock that is up the most on any given day and the reason is because the penny stock that's up the most on any given day is going to have a lot of Traders watching it there are so many retail Traders like myself and especially who are beginner Traders with smaller accounts that only trade penny stocks so when I was getting started when I got into trading in my 20s I said all right I'm going to focus on penny stocks and I really realized pretty quickly I had to stay away from the OTC stocks so I wasn't going to trade anything that was a sub Penny or a trip zero stock I was only going to be trading things at least above one penny a share and preferably you know at least at 10 cents a share and I'd look to essentially each morning scan the market and search the market for which penny stocks are moving today what is today's hot stock so this is the scanner that I use to make that search what this is going to do is it's going to search the entire market for any stock that that is within the parameters of the filters that I've set so I'm searching for stocks up at least 10% and in this case I'm searching for stocks that are under $3 a share so that makes it a traditional penny stock now I have other scanners that I use to search for the type of stocks that you'll typically see me trading stocks between $2 and and $20 for instance but for the sake of this challenge I wanted to test Myself by only trading penny stocks so nstg is the leading percentage Gainer today and although there is a penny stock that has more volume this one that's uh gge the problem with it is that it's only 5 cents a share it's just a little too cheap for me and even at 5 cents it's only up 45% so I'm focusing on the stock that I believe is the most obvious which is going to be the leading percentage Gainer now something I always like to remind you guys of is the fact that retail broker ERS want their customers to trade the more you trade the more money they make now even with commission free Brokers they make money on your order flow here's the thing with these penny stocks with these penny stocks people are buying a lot of shares and the money that they get paid is on a per share basis so they're going to make more money when you're trading a 20 cent stock than if you're trading a $200 stock so what do you think their incentive is going to be it's going to be to be showing you the penny stocks that are moving cuz this is where they're going to make money the more trading the more money they make and so I have found that the leading percentage gainers each day they get a lot of attention they get attention in the media they get attention from brokers who are emailing their clients or their their customers whatever you call them these are the stocks that are moving today these are the top gainers top gainers top gainers so I always want to be focused on the top gainers cuzz those are the stocks that going to have the most attention more attention means higher volume and that is going to increase the imbalance between supply and demand which is means the move is going to get bigger and bigger and bigger okay so on nstg the way I found the stock was by using the scanner okay so now I found the stock how do I choose my entry where do I want to get in where do I want to get out this stock has already done one pullback so if we look at the chart right down here this is a Candlestick chart and you can see how the stock has been increasing in value the the move is is moving up so we have these candles going up right here and then this is what we call pullback this pullback occurred at about 17 cents a share it then squeezed out of that pullback and moved even higher and it Formed another pullback right here at about 19 cents a share this is where I bought it I bought it right here as it was breaking out of that pullback so for those of you who are a little bit newer to make sure we're all on the same page I'm just going to show you a little bit of the anatomy oh the anatomy of these patterns okay so what I like to see is the stock making a quick move up like this longbody green candle and I like to see it's on high volume at this time as the stock is moving higher each time it's making a new high and going up up up up up the stock is going to be hitting stock scanners just like this one here and it's going to be moving up the scanner as the percentage gain increases with each tick that the price as the price goes up so as the price goes up now people are watching it more volumes coming in because more people are paying attention it continues higher here before we have a pullback now the first pullback is generally formed by people who were in before who are taking a little bit of profit there are some people who will short these stocks shorting is when and let's say this is at the 17 Cent Mark uh shorting is when you sell the stock and you profit when it goes lower because you buy back your shares at a lower price however let's be honest the most you can make shorting a stock is if it goes to zero so if you're shorting a stock that's priced at one penny a share it's like you're shorting it basically at the bottom so shorting a stock at 10 cents 15 cents you're still shorting a stock that's basically at the low you have so much more risk that it goes to 50 cents or 75 cents or a dollar or $2 or $3 a share and a much higher likelihood that it does that then it goes to zero so the risk to reward just isn't there so although there will be some people that short these penny stocks it's not going to be as common all right so we get the pullback and then what I look for is I I consider this to be a wave all right so we have a wave here and I'm looking for the next wave back up so what I'm actually going to look for for is the first candle to break through the high of this previous candle this is called a candle over candle formation this green candle broke the high and went over the previous candle this for me is a Buy Signal which means I'm a buyer right here at this price so I'm in right there with my buy order now you might think okay Ross all right so now I'm understanding why you got in uh you know roughly speaking let's see so we had our first pullback at about 17 cents and then the second one was at 19 cents all right so let's change the Whiteboard so let's just change this to 19 cents all right so I'm in at 19 cents a share all right and let's remember I bought 5,000 shares which was pretty much the most I could afford right times 20 cents a share is exactly $11,000 uh but as we know I got filled at1 1969 all right so 1969 that was my fill all right so I am basically all in on this stock and some of you might think wait a second you just put the full th000 bucks on this stock you could have lost all that money not exactly let's think about what my Max loss actually is on that type of trade my Max loss is the low of the wave so what was the low of the last wave because that's my stop loss all right so let's pull up the um the charts and take a peak so the low of this last wave was well it wasn't even 188 it was just below it was just above 18 cents it was about uh sorry it was above 18 cents it was about 18 and maybe 184 uh approximately I don't have the exact um but it was approximately 184 so the stop loss here is 18 we'll call it 18.2 cents and my entry is just under 20 cents so 1969 approximately all right so what I'm risking here is just over one penny a share on 5,000 shares essentially what I'm risking on this is less than $75 okay so that's my total risk on the trade now in a perfect world this stock is going to squeeze up to 25 cents 28 cents 30 cents 3540 and it's going to go higher but if I see any sign of weakness I can always just get out different Traders have different schools of thought on this some Traders they'll say I'm going to get in I'm going to set my stop and I'm not going to look at it I'm either going to get stopped out or I'll come back and I'm still holding the position I don't really like doing that the reason I don't like doing that is because a lot can happen from the moment you press the buy button until you eventually potentially get stopped out just for instance you could have the stock that actually makes a fantastic move it could go from you know you could be in on this pullback right here it could go from 19 cents up to 25 to 30 but you set your stop way down here this was your stop and then it could come all the way back down and stop you out well obviously you don't so you don't want to just get up and walk away now could you set what's called a trailing stop trailing stops are popular so a trailing stop is when you get in so you you buy the pullback and you get in with let's say in this case a 5cent uh trailing stop so a 5-cent trailing stop means that your initial stop is 5 Cent below your entry minus 5 cents but every penny that the stock moves up your stop moves with it so if it goes all the way up to here like this where's your stop go 5 cents below the high it's always 5 cents below the high that's why they call it a trailing stop CU it's trailing as you go higher so then if it finally drops down here you're out of the trade boom you you've got your profit this is a great strategy for someone that wants to take a trade but is not able to monitor the trade all day long with one excep ception you cannot use stop orders pre-market okay so the Market opens at 9:30 that's the ringing of the Bell on Wall Street is at 9:30 a.m. eastern standard time but pre-market begins at 4: in the morning and so from 4:00 a.m. until 9:30 a.m. you can actively trade so wait what time was this trade we could check the time it's actually right here about 9339 34 so on this trade I could have gone ahead and set a trailing stop but on any trade that is pre-market a pre-market trade you can't use trailing stops it doesn't work now there's one other problem with a trailing stop the other problem with a trailing stop is that when you're finally selling it's when the stock is going down and it's easier to sell when a stock is going up because you're taking profit into strength when it's rolling over and it's selling you're trying to sell at the same time as everyone else because now it's obvious that the price is coming back down so selling as it's dropping well you're not going to get as good of an exit as if you had sold into strength but on the other hand if it keeps you in the trade a little bit longer that's okay so trailing stops valid using just a regular standard stop order not great I would rather monitor the trade so in this trade here I've got $11,000 in the account as you know for some of my previous challenges I was using um a small account well the same account but I was using leverage one of the rules with a broker that I'm trading with is that you cannot use any leverage on stocks under $5 a share the way leverage works is that when you deposit $1,000 into the account I actually have times six I have $6,000 of buying power which means if I saw a stock that was $6 a share I could actually buy a full 1,000 shares of it and if the stock goes up to 660 I'm up 600 bucks right that's my profit $600 right there so I could actually grow my account by 60% in one day even when the underlying asset that I traded only went up 10% that's awesome but this is a store that cuts both ways if I get in at $6 and it drops goes the other way drops to 540 then I'm down 600 and my account's down 60% in one day in any case using Leverage is risky but it can allow traders who have experience like myself to grow an account much faster however there is no leverage on stocks under $5 and so of course this stock price at 20 cents I have no leverage uh so although the total profit that I'm going to make on this trade is not going to be as high as I would have made trading a five or six stock relatively since I'm not using any leverage it's still a pretty good return okay so I'm in the trade we bought at uh let's see I got in at 19691 1969 and my stop was just about 18.5 cents as it squeezes up right here I take half off the table I took half off the table here just to be a little bit safe my account literally has 1 000 in it I wanted to book some profit so by taking a little bit of profit I now have realized a gain of $838 now the trade's not closed I'm still holding 1,250 shares but I'm taking a little bit of profit off the table obviously if I was using a trailing stop I would still be holding the entire position but with a 5cent stop I wouldn't get out until it was back break even and on a trade like this I really need to be pretty aggressive about locking up my profit the fact that it went all the way to 26 Cents I was impressed I'm taking a little more off the table here there's 27 on the offer so what I'm doing is I'm I'm actually selling my shares at the ask price right here because I want to make sure I get the best fill so I'm not selling on the bid as much as I'm selling on the offer so still holding 500 shares 528 shares I'm up right now $120 42 that's not bad that's a decent little trade but this is an example right here of that big red candle this is where people start bailing out the problem with this is that all of a sudden we say the Bulls take the stairs and the Bears take the window so we have this nice slow uh increase in price and and then the Bears jump out the window and we get this big drop we don't like seeing this but unfortunately it happens and so that probably did take out a bunch of trailing stop orders and live stop orders it drops down and then ends up bouncing back up I take it all off the table for $129 24 which is a 12% gain on the account that's that's not bad for day one of a small account challenge realistically as you uh well know no the average the average mutual fund will be lucky to return 10% in one year so for me to be able to do that in just one day is fantastic in fact I just beat the performance of many hedge funds uh but I did it with of course very small account so what I've now done is I've changed the number of decimal points to four so now we can see what the price looks like and and this is where you're you're actually visually seeing how it trades down to the 1/100th of a penny so you've got orders here if we pause this just for a moment it's not 21 cents by 21 C it's 2108 by 2129 so it really is trading down to the the fraction of a penny now you've got 54 million shares of volume the best thing about this stock is that it's very liquid it was easy to get in it was easy to get out I didn't have to worry about getting trapped or getting stuck in terms of a profit to loss ratio on the trade given that I was risking $50 to $75 making 129 not as much as I would have liked to have made one thing I'll say about this is that the float being 33 million shares is a little higher than I'd prefer so what I'd like to do now is I'm going to back out of my uh live trade from today let's look at the chart from uh nstg I'll show you how high it actually went today because it had this initial squeeze which is where I got in this initial move right here where I got in at 19 cents just under 20 goes up to 27 it pulls back down to about 18 cents and it ends up holding support and then it made another move higher and it ended up squeezing all the way up to about 38 cents a share this stock was up over 200% at one point today this is a phenomenal move we love seeing this type of volatility this is really great to see so if we look at the chart you can see there's some levels of ascending support I like to draw these trend lines these trend lines help me visualize areas where I could potentially be a buyer ultimately I want to buy as close to support as possible when I get in close to support I'm risking less let's look at mlgo from yesterday this stock mlgo yesterday made an except Cal move so right now it's at 64 but if we look at it yesterday we get this chart a little bit bigger and we scroll back you're going to see this stock yesterday went from let's see so it actually hit a low the previous day of about 39 cents a share 39 cents it's a little higher than I thought and it ended up squeezing all the way up here to a high of over a dollar let's see it hit $169 this is an incredible move now now this was actually one of my big regrets yesterday because I had it up at the open and I had an order ready to go at 95 and I actually sent the order and it did not fill so I I didn't get any shares filled this was right at the open at 96 and I didn't want to chase it and so I was just like well I you know I'm going to I'm going to focus on something else the problem was I was trading in my main account and I had a lot of this yesterday the market was crazy we had so much stuff moving I just sort of had my side account here I tried it but it didn't get filled I was like I just need to focus on my main account today so anyways it ends up going from 96 C squeezes all the way up here halts multiple times this was an incredible move these are the types of stocks that can certainly allow a Trader a day trader with a relatively small account to grow the account quickly so it's important to differentiate the type of penny stocks that have the potential to make this type of move from the ones that are really junky and aren't going to go anywhere now the float on this one actually is 11 million shares so um still a low float and the float comparatively is a third of the float of um the one that I traded today nstg so when you have a stock that has onethird of the float and by the way so the volume on nstg today is currently 350 million shares mlgo the volume on mlgo yesterday was um 129 million shares I think that is very telling on 129 million shares less volume mlgo made a bigger move it's because it required less demand due to the very low level of Supply on Thea in the case of nstg it requires three times more volume to create the same degree of imbalance between supply and demand so this is like a moving calculation that as an active Trader you will get this sense too you start to real ize which stocks have the potential to make big moves and which ones just it's not going to happen now if you want to learn more about the strategy that I trade every single day I have pinned to the top comments and put a link in the description where you can download my small account challenge strategy PDF it's a PDF that documents the strategy that I trade whenever I'm in a small account I prefer to trade stocks that are between the5 and $10 range because I can use the leverage with my account and by using leverage I can grow the account a lot faster having said that as today's case study shows there is nothing wrong with trading lower price stocks in fact even though the total profit that I made today is not the biggest day I've ever had in on day one of a small account challenge considering I didn't use any leverage this was probably the most I could have made with just $11,000 I needed a stock where the underlying stock actually went up 12% in order for me to make 12% on the account you know it's cash it's it's it's cash for cash it's that's how much I was able to buy there's no leverage now as part of my small account challenge I had said every time we cross over 10,000 new subscribers on the channel I'll reset the account back to 1,000 bucks so make sure you hit that subscribe button I hope you hit the thumbs up once we cross over 10,000 new thumbs up in this series guess what I'm going to upload a deep dive breakdown of how I use level two to time my entries and my exits so make sure you guys hit the thumbs up I hope you subscribe to the channel and I will see you for the next episode where I will be reset most likely back to 1,000 bucks and I'm going to try a slightly different strategy I've tried small caps I've tried penny stocks what's coming next well you'll have to stay tuned to find out so I'm looking forward to seeing you for the next episode of the small account Challenge and if you made it to the end of this episode hey check out this upload that YouTube thinks you are going to just love
