Playing a “risky business” stock…

A Tuesday Trade Edition: One of the most important concepts in trading is to review your work, and learn from the good and the bad. It’s critical to identify what’s working — to do more of it. Each week, you’ll get a trade from my trading journal, in which I explain my whole thought process from start to finish. Trading is all about finding something that works, and applying it, over and over again. That’s how you find trading success. So study up on this “Tuesday Trade” and let’s get to work.

Remember our good old friend the “honey badger” stock?

Well here’s a honey badger stock that’s bucking the trend right now — FROG. I will note before we dive in deeper, that this is one of the “risky business” stocks that I talked about in my “Options Freedom Formula” Class this past weekend.

What do I mean by a “risky business” stock?…

That means there’s going to be a lot of volatility in it, and there’s not a solid pattern present. BUT because of the volatility that also means there could be big opportunities.

So once you know the right setups and how to trade a “risky business” stock, you open yourself up to a lot more opportunities that otherwise probably wouldn’t be present.

Diving Into The Trade…

Fyi I went ahead and traded this in the options live trading room, so other members are currently in on this trade too.

I got into this trade initially because it had an earnings report coming up and because it had a squeeze. Additionally, it triggered positive volume of the Turbo VZO Indicator, and I saw green Trend Strength Candles on the chart.

From an even greater perspective, I was looking at the idea that there was going to be some hype around this ticker since it’s a recent IPO, and whenever there’s hype in a stock especially prior to earnings, we’ll see it covered in the media… and that generally results in it being traded higher.

So to recap here are the combination of factors I used to determine that this was a good opportunity for me:

  1. FROG is a recent IPO
  2. It had earnings coming up
  3. It was within range of an all time high (my general rule is within 10%)
  4. There was a squeeze
  5. There was a Turbo VZO buy signal
  6. The Trend Strength Turbo Candles were lighting up

Now this is exactly what I teach in my “Options Freedom Formula” Class — as this strategy is used in pair with the Phoenix Finder.

Check it out below:

The Phoenix Finder is what helped me identify an entry in this trade. Now this is a screenshot from yesterday, and what you’ll notice about FROG in particular is that even though the market was down on Monday… this ticker was up 5%.

The entire purpose of being a good stock picker and looking for relative strength with the Phoenix Finder is so that you can pick something that’s strong when everything else is weak AND you can pick something that’s stronger when everything’s strong.

That’s the advantage of this Formula as well as the Phoenix Finder.

If you’re interested in learning more about them, here’s all of that information. Plus, if you join me now, you can attend the live trading sessions in real-time (they’re today and Thursday).

Profits:

Now to wrap it up, I got in for $11 with a long call, and as of yesterday it was up $7 — which is about 70%. So definitely not bad so far, I’ll be interested to see where we end up.

Five Star Fact: Whenever you’re trading a “risky business” stock like this one, the best way to take advantage of those moves is with a long call. I show you all about that in the class as well.

1 thought on “Playing a “risky business” stock…”

  1. Hi Daniel—could you share the grid for IPO’s? I have attended two of your classes-Short Squeezes and the Option Freedom class on Saturday. Thanks

    Al In Houston

    Reply

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