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Overnight Strategy For Penny Stocks | Amazing Adviser

In this article I will discuss about overnight strategy for penny stocks, so check this out now. This article is also available in video which is given below.

We all know penny stocks can be sketchy.  But when is it good to buy a small cap penny  stock and hold it overnight?


  
One of my favorite day trading strategies  is buying these small cap penny stock runners  overnight and sell them the next day either  for a spike in price, or even better, a massive  gap up premarket sometimes in dollars. 

In this article I’ll be teaching you this  overnight swing trade set up so you can add  this to your current day trading playbook.  If you like what you hear so far, make sure  to hit the like button and subscribe.  

So let’s get right into this overnight hold  strategy.  We’ll use my recent overnight play on KEG  for example here. 

You can see this chart on the daily for this  ticker.  March 12th is the day I took the overnight  swing play.  And i sold   it into the spike on the 13th the next day.  So this is the daily chart set up I look for.  

The idea is to buy the stock that is closing  strong on the daily chart above previous resistance. 

Meaning there is more buying and we have cleared  all the closest walls of sellers and held  above the selling price.  I don’t normally look at the wicks on the  daily chart.  I look at opening and closing price of a candle.


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So in this case, the nearest wall of sellers  on KEG is at 3.80’s.  On march 12th the stock was closing around  its intraday highs around 3.90’s. 

So I took that position overnight.  And sold it into the morning spike.  

Now let’s talk about more specific criterias  besides just the daily candle chart set up.  But before we do that, i want to give a huge  shout out to one of my loyal subscribers Castor.

 He’s the one who suggested that I should  make a more detailed article explaining this  buy overnight strategy and showing you the  statistics.  

So thank you Castor for the comment. So, You need to be very specific about your  stock picks.  Because remember, most of these small cap  penny stocks are sketchy companies.  And you don’t want to get dumped on.  If you look at my spreadsheet here.  

You can see that I don't take this set up every  day. 

Sometimes I go months without taking this  set up on penny stocks because nothing meets  my criteria.  Either that or I’ve missed them, doesn't  matter.  

I only want to hold these penny stocks overnight  if I see a great set up that meets my criteria. 

And its only by being selective, that this  strategy gives me a 62% win rate.  

I know in the last article I said its 70%.  That was my mistake, its only 62%.  

But, very importantly, the profit to loss  ratio with this strategy as you can see here  is 7 to 1.  

So yes I only win 6.2 out of 10 times, but  the times I win I make 7 dollars and the times  I fail I lose only 1. 

So that's good risk reward.  And if you watch this article all the way to  the end.  

I will tell you my overnight buy stock pick  on a small cap penny stock that meets all  my criteria for A+ set up.  

So, criteria one, on the daily chart I want  to see increasing buying volume.  

Two, I want the current candle to clear above  previous resistance as i mentioned earlier.  Three, I want to see a clear trend up, or  a clear break out.


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You can see on daily chart on KEG, increasing  volume, bullish candle above resistance on  the 12th, and a clear trend upwards.  Let’s use another example, HMNY.  

This was an amazing low float runner from  October 2017.  I miss this stock. 

Now it’s trading at like 0.005 cents.  But it’s done a 250 to 1 reverse split.  

At the beginning of this run, this was $3.75,  and the highs was $38.  That's 1000% in 2 weeks.  Crazy right?  This is the type of low float penny stock  play I like.  

I traded this a lot intraday during this 2  - 3 weeks span.  But the one overnight I did was closed on  Oct 11. 

So i entered previous day near close at $27.44  and sold at $32.35 the next day.  

But daily chart on HMNY, again, increasing  volume, clear trend up and breaking above  previous resistance.  

Criteria number four, daily chart needs a  clean chart history showing there's follow  through to the upside.  

So lets look at some charts that I think are  messy and would avoid for overnight hold.  

Lets look at one of the more recent penny  stock runner PLAG.  Ugly daily chart.  

Lots of inside candles chopping around.  Not a lot of volume either.  Next BPTH, another recent runner.  Sketchy chart.  The daily candles don't have any trend.  It just looks like a lot of dilution.  

I trade this one intraday but I wouldn't hold  it overnight.  Another one to avoid is GBR.  

Sure daily candle break out and there's volume  but the daily chart is too sketchy. 

So this is another example I would avoid for  overnight buy.  Criteria number five, I know, there's lots  of criterias, but I'm very picky and specific  about what kind of risks I'm willing to take  overnight.  

Criteria five, I prefer to take on the first  or second strong green candle.  Usually that's because by third day the stock  has already had its run and its too extended.  An example of this one is LFIN.  

I took the overnight on April 5, the second  green candle and sold on the 6th.  I would  not have overnighted this   on this third candle. 

But you can see I  still   took that with HMNY. but that was because  I knew the short squeeze ain't done yet.  

Everyone in the world was trying to short  this.  That being said, when I'm buying overnight  on candles after 1st or 2nd day, its all with  very small size only.  

Also, with HMNY, I was very familiar with  the ticker. 

And that brings us to my sixth criteria.  Criteria 6, I have to have traded the ticker  before.  

I will always prefer names I'm familiar with,  HMNY, SAEX, LFIN, CHFS, CLWT, GLBS, DCIX,  TOPS. this goes the same with trading intraday.  

Which is why a lot of times when I hold stocks  overnight like I did with DCAR and HYRE, I  will sell half the position for a profit and  only hold half the position.  

Because that was my first time trading those  names, and I want to make sure I pay myself  a little to minimize any possible overnight  loss. 

Which did happen, both of those half size  overnight positions dumped on me.  

I have a article recap on that trade if you  want to check that out after this one.  

So those are the six criteria I look for.  But there are some bonus criteria that will  add to my conviction.  

Those are, sector sympathy bubbles, and positive  news or events coming up. 

So we have had the cryptocurrency blockchain  bubble in Nov and Dec of 2017.  

During the bubble, if there were penny stocks  matching the six criterias and are also in  the blockchain sector, that adds to my conviction  for holding the stock overnight.  

Same goes with the shippers and marijuana  sector bubble we have had with the penny stocks. 


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Also, if the small cap penny stock company  has any upcoming news conference, earnings,  data release etc, I’ll also favor those  ones because a lot of times the stocks will  run into those events.  

But you should never hold through it though.  Because most of the time people sell the stock  after the news and they crash big time. 

So Ive shown you some good overnight buys  that worked out.  But let’s look at some failed charts.  These are stocks that meet my 6 criterias  but the set up still failed.  

Because remember this track record for me  the last 2 years was 62%.  There is no set up that’s going to guarantee  you 100% probability.  

I am not some guru selling a get rich quick  DVD that has your golden ticket to make a  million dollars in a year.  No.  I’m transparent about the risks here. 

If you are not comfortable with overnight  risks at all.  Don’t buy penny stocks, they are sketchy,  risky and heavily manipulated.  

You will lose if you do not follow rules and  criterias you set for yourself.  So let’s talk big overnight losses.  My recent overnight on DCAR, and HYRE.  Didnt work.  

I lost sixty cents and  eighty cents on those.  Not fun.  Another huge loss was OPHC from late 2017.  This one did an offering.  

Nasty nasty.  I lost $1.72 per share.  And that was before I was smart enough to  take half the profit before close and swing  only half the position overnight to reduce  exposure.  So, good times.  So as promised from earlier. 

I have bought into a small cap runner and  held it over the weekend with the intention  to sell next week.  That one is VKTX.  Gorgeous daily chart.  

Candle closing above previous resistance,  increasing volume, first strong green day.  And I have traded this stock a couple of months  before.  

Lets look at the intraday here.  This was an alert in my chat room Spartan  trading.  My initial buy was around 9.40.  Bought the flag set up and sold into the 10’s.  

Near end of the day I bought again during  the dip here at 9.80 half size to swing over  the week. 

And this stock has met my bonus criteria.  They are presenting phase 2 data on April  11.  So daily chart meets my criterias and the  presentation should push the stock up into  next week.  And, another bonus criteria.  

If you look on finviz.  

This, right here, is a huge bonus.  The stock is 45% short.  If this thing really gets going on Monday. 

All the shorts are going to have to buy to  cover and that will create a short squeeze.  So that explains why I took it long over the  weekend.  

We’ll see what happens next week.  Another nice find by Spartan trading chat  room.  

So this is the Penny stock Swing overnight  strategy I love and gives me good probability  and amazing risk reward. 

Hopefully you find bits and pieces in this  article that’ll help wiht your own trading.  

If you have any questions regarding this strategy  or any comments or ideas for future articles  you want me to go over, please leave them  down below. 

Don't forget to hit the like button and subscribe  if you want to see more day trading strategy  articles like these in the future.  Thanks again for watching. 

I’m the humbled  trader, and I’ll see you next time. 



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