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Stocks Under $5

Best Stocks under $5 is a list of trending stocks under $5 and above $4. These stocks are traded on NYSE, NASDAQ, and AMEX and sorted by percentage gain of the day so traders can easily see the top stocks under 5 for today. To filter stocks by any price and volume, please use our free technical stock scanner.

Best Stocks Under 5

The top stocks under $5 list is updated daily after the market closes. Please check back for the newest low-price stocks.

9/15/2026

>> 10 Stock Chart Patterns That Tell You When to Buy & Sell <<
Symbol Chart Company Open High Low Close Volume % Change
VRA Vera Bradley, Inc. 3.15 4.15 3.04 4.09 9.76M 34.10%
CLNN Clene Inc 3.43 4.18 2.92 4.02 403K 22.56%
QXL Viewbix Inc 4.50 5.05 4.50 4.83 145.9K 12.33%
MSTZ T-Rex 2X Inverse MSTR Daily Target ETF 4.22 4.63 4.16 4.39 32.49M 10.58%
XPON Expion360 Inc 5.00 5.20 4.61 4.96 115K 8.53%
EDHL 4.68 4.75 4.50 4.74 2.02M 8.47%
EOSE Eos Energy Enterprises Inc 3.79 4.19 3.76 4.08 22.9M 6.81%
BORR Borr Drilling Ltd 4.16 4.38 4.08 4.36 5.38M 5.83%
CGTL 3.95 4.25 3.85 4.20 50.4K 4.48%
MOLN Molecular Partners AG 3.99 4.20 3.90 4.20 2.5K 4.48%
ONG Direxion Shares ETF Trust 4.04 4.27 4.00 4.17 10.2K 4.25%
CLIR Clearsign Combustion 3.80 4.18 3.79 4.04 3.8K 4.12%
HHS Harte-Hanks, Inc 4.35 4.54 4.29 4.47 343.7K 3.95%
ALTO Alto Ingredients Inc 3.98 4.09 3.93 4.09 534.9K 3.81%
DIBS 1stdibs.com Inc 4.36 4.54 4.32 4.51 58.3K 3.68%
NTWK NetSol Technologies Inc 4.04 4.30 4.04 4.25 22.8K 3.41%
ELAB Elevai Labs Inc. 4.63 4.90 4.55 4.67 26.1K 3.32%
WTI W&T Offshore, Inc 4.09 4.28 4.03 4.13 4.31M 2.99%
CENN Cenntro Electric Group Limited 4.55 4.84 4.43 4.50 9.9K 2.97%
IMRX Immuneering Corp 4.52 4.52 4.24 4.46 617.8K 2.76%
SOC Stoneleigh Partners Acquisition Corp 4.96 5.10 4.82 4.96 7.14M 2.69%

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AMPY Amplify Energy Corp 4.81 5.01 4.80 4.93 440.5K 2.49%
LSAK Lesaka Technologies Inc 4.18 4.30 4.11 4.26 122.2K 2.40%
GSM Globe Specialty Metals, Inc. 4.19 4.33 4.18 4.33 770K 2.36%
DHX DICE HOLDINGS, INC 4.67 4.95 4.67 4.90 229.5K 2.08%
OFS Ofs Capital Corp 3.92 4.00 3.89 4.00 89.6K 2.04%
MDXG Mimedx Group Inc 4.64 4.80 4.58 4.73 818.4K 1.94%
ARKR Ark Restaurants Corp 4.83 4.83 4.69 4.76 2.4K 1.71%
BOSC B 4.73 4.82 4.73 4.82 62.3K 1.69%
FRMM Ethzilla Corporation 4.69 4.69 4.31 4.54 78K 1.57%
SBC Sbc Medical Group Holdings Inc 4.60 4.65 4.46 4.60 98.2K 1.55%
JL J-Long Group Ltd 4.71 4.87 4.71 4.87 202 1.46%
LAW CS Disco Inc 4.27 4.33 4.19 4.32 221.6K 1.41%
TSI TCW Strategic Income Fund Inc 4.25 4.33 4.24 4.31 183.7K 1.41%
TROX Tronox Inc 4.26 4.42 4.26 4.38 1.7M 1.39%
SOTK Sono-Tek Corp. 4.52 4.54 4.33 4.49 15K 1.35%
ACTG Acacia Research- Acacia Technologies 4.54 4.80 4.47 4.55 87.5K 1.34%
BOLT Bolt Technology Corp 3.98 4.36 3.86 4.03 41.8K 1.26%
CDLX Cardlytics Inc 4.02 4.19 3.90 4.10 12.5K 1.23%
UROY Uranium Royalty Corp 4.20 4.40 4.10 4.31 1.95M 1.17%
MTC Allied Irish Banks Plc 4.85 4.90 4.56 4.85 42.1K 1.04%
MNTS Momentus Inc 3.98 4.12 3.93 4.02 442.3K 1.01%
XTND 4.42 4.50 4.24 4.46 389K 0.90%
PSQH PSQ Holdings Inc 4.89 5.05 4.77 4.84 42.9K 0.83%
CTKB Cytek BioSciences Inc 4.81 5.02 4.80 4.89 893.4K 0.82%
MOMO Momo Inc Ads 4.92 5.00 4.91 4.98 528.7K 0.81%
WHWK 4.06 4.11 3.96 4.11 70.8K 0.74%
OMCC Old Market Capital Corp 4.16 4.19 4.16 4.19 2.5K 0.72%
MMT MFS Multimarket Income Trust 4.35 4.44 4.30 4.37 734K 0.69%
AMBP Ardagh Metal Packaging S.A. 4.82 4.82 4.70 4.80 907.9K 0.63%
ANGI Homeservices Inc 4.97 5.11 4.89 5.00 362.6K 0.60%
NRGV Energy Vault Holdings Inc 4.10 4.17 4.00 4.12 2.79M 0.49%
EH Ehang Holdings Ltd Ads 4.52 4.54 4.31 4.52 609.2K 0.44%
MTSG 4.58 4.64 4.55 4.60 5.3K 0.44%
EDSA Edesa Biotech Inc 4.14 4.35 4.06 4.09 24K 0.25%
ACCO Acco Brands Corp 4.22 4.27 4.19 4.26 448.8K 0.24%
FOCL Edap Tms Sa ADR 4.14 4.20 4.08 4.11 35.8K 0.24%
GTM 4.16 4.36 4.11 4.21 4.56M 0.24%
ACP Avenue Income Credit Strategies 4.56 4.66 4.50 4.59 4.16M 0.22%
TLSI TriSalus Life Sciences Inc 4.76 4.79 4.53 4.79 92.1K 0.21%
ACRE Ares Commercial Real Estate Cor 4.35 4.37 4.31 4.33 267.6K 0.00%
ASPN Aspen Aerogels Inc 4.97 4.97 4.78 4.87 327K 0.00%
BRSP BrightSpire Capital Inc 4.45 4.50 4.39 4.43 1.3M 0.00%
EARN Ellington Residential Mortgage 4.17 4.20 4.10 4.17 557.5K 0.00%
IMDX 3.99 4.24 3.77 4.03 160.8K 0.00%
KOPN Kopin Corporation 4.35 4.40 4.08 4.35 2.84M 0.00%
RCS PIMCO Strategic Global Government Fund 4.90 4.90 4.84 4.90 194.1K 0.00%
RLMD Relmada Therapeutics Inc 4.46 4.50 4.30 4.45 1.63M 0.00%
EVF Eaton Vance Senior Income Trust 4.87 4.89 4.86 4.87 59.7K -0.20%
MSOS AdvisorShares Pure US Cannabis ETF 4.97 5.00 4.83 4.92 3.16M -0.20%
COYA Coya Therapeutics Inc 4.75 4.75 4.49 4.64 181.1K -0.22%
ESBA Empire State Realty Op LP 4.06 4.13 4.05 4.12 14.3K -0.24%
GGT Gabelli Global Multimedia Trust Inc 4.04 4.06 4.01 4.03 544.9K -0.25%
IMA Inverness Medical Innovations, Inc 4.99 5.19 4.76 4.98 8.2K -0.40%
SLNG Stabilis Solutions Inc 5.08 5.38 4.82 4.92 15.8K -0.40%
ENIC Enersis Chile S.A. ADR 4.33 4.33 4.24 4.29 501.5K -0.46%
ASTL Algoma Steel Group Inc 4.24 4.27 4.17 4.21 840.6K -0.47%
LUD 4.28 4.28 4.28 4.28 1.9K -0.47%
TOYO Toyo Co. Ltd 4.26 4.32 4.20 4.26 229.9K -0.47%
ACDC ProFrac Holding Corp 4.88 4.95 4.77 4.86 892.1K -0.61%
XNET Xunlei Ltd ADR 4.84 4.95 4.84 4.87 144K -0.61%
DOYU Douyu International Holdings Ltd Ads 4.69 4.74 4.68 4.72 16.2K -0.63%
ARRY Array BioPharma Inc 4.41 4.46 4.33 4.38 5.42M -0.68%
XBIO Xenetic Biosciences Inc 4.05 4.33 4.05 4.22 3.5K -0.71%
LCID Lucid Group Inc 4.17 4.19 4.01 4.13 11.58M -0.72%
WYHG 4.28 4.83 3.86 4.13 607.8K -0.72%
ALGS Aligos Therapeutics Inc 5.04 5.45 4.82 5.00 22.2K -0.79%
ASG Liberty All-Star Growth Fund Inc 5.05 5.05 4.95 4.97 321.4K -0.80%
JQC Nuveen Multi-Strategy Inc & Growth Fd 2 4.68 4.71 4.65 4.66 860.6K -0.85%
TMCI Treace Medical Concepts Inc 4.58 4.62 4.43 4.59 81.7K -0.86%
NVD GraniteShares 2x Short NVDA Daily ETF 4.21 4.27 4.14 4.22 82.23M -0.94%
HOYY 5.00 5.07 4.90 4.99 45.5K -0.99%
ZSTK 4.85 5.00 4.50 4.90 40.5K -1.01%
ORMP Oramed Pharma 4.56 4.71 4.55 4.63 100.7K -1.07%
PRLD Prelude Therapeutics Incorporated 4.56 4.58 4.40 4.53 167K -1.09%
GCV Gabelli Convertible & Income Securities 4.53 4.57 4.47 4.50 44.5K -1.10%
OMSE 4.52 4.52 4.40 4.40 23K -1.12%
PAVS Paranovus Entertainment Technology Ltd 4.39 4.39 4.20 4.36 1.2K -1.13%
PHK PIMCO High Income Fund 4.34 4.35 4.27 4.29 1.4M -1.15%
CITR 5.05 5.11 4.86 4.96 52.2K -1.20%
AQST Aquestive Therapeutics Inc 4.90 4.95 4.76 4.82 1.25M -1.23%
TCPC TCP Capital Corp 4.09 4.10 3.97 4.01 1.14M -1.23%
OWLT Owlet Inc 4.72 4.73 4.61 4.65 92.7K -1.27%
TSLG Leverage Shares 2X Long TSLA Daily ETF 4.66 4.74 4.52 4.59 76.1M -1.29%
UAA Under Armour 5.05 5.08 4.89 4.97 7.69M -1.39%
ESRT Empire State Realty Trust Inc 4.30 4.30 4.23 4.24 3.55M -1.40%
#1 Stock Chart Pattern
Top 10 Penny Stocks
OSG Overseas Shipholding Group Inc 4.95 4.99 4.85 4.93 491.7K -1.40%
RGP Resources Connection Inc 4.23 4.23 4.13 4.17 135.5K -1.42%
BRBS Blue Ridge Bankshare 4.10 4.12 4.01 4.03 2.09M -1.47%
UAMY U S Antimony Corp 4.70 4.75 4.53 4.66 4.27M -1.48%
MSGM Motorsport Games Inc 4.30 4.55 4.30 4.43 69.4K -1.56%
ACCS 4.84 4.96 4.77 4.83 21.9K -1.63%
TLS Telos Corp 4.30 4.30 4.13 4.23 434.3K -1.63%
RZLT Rezolute Inc 4.11 4.28 4.11 4.17 517.5K -1.65%
LXEO Lexeo Therapeutics Inc. 4.18 4.28 4.01 4.15 657.3K -1.66%
TRBG 4.36 4.49 4.01 4.15 36.9K -1.66%
GSIT GSI Technology, Inc 5.03 5.05 4.89 4.89 424.7K -1.81%
CSBR Champions Oncolog 4.85 5.06 4.64 4.83 28.4K -1.83%
TE TECO Energy, Inc 4.41 4.54 4.21 4.30 15.93M -1.83%
SMU Bank of America Corporation MITTS Linked to S&P 500 4.74 4.99 4.51 4.72 1.57M -1.87%
CAMP CalAmp Corp 4.23 4.28 4.03 4.17 117.1K -1.88%
PAL North American Palladium Ltd 5.10 5.10 4.75 4.86 237.1K -2.02%
PTON Peloton Interactive Inc 4.99 4.99 4.81 4.85 5.34M -2.02%
CCEL Cryo-Cell International, Inc. 4.40 4.45 4.27 4.34 10.4K -2.03%
SERV Servidyne, Inc 4.42 4.43 4.27 4.34 2.05M -2.03%
UA Under Armour, Inc 4.90 4.94 4.79 4.81 1.37M -2.04%
Top 10 Candlestick Chart Patterns
Today's Top 50 Stocks
MB 4.28 4.39 4.20 4.27 3.4K -2.06%
AIRJ Montana Technologies Corp. 4.16 4.29 3.96 4.07 1.04M -2.16%
MIND Mitcham Industries, Inc 4.10 4.29 4.02 4.07 73.5K -2.16%
MARO YieldMax MARA Option Income Strategy ETF 4.08 4.13 3.95 4.03 253.5K -2.18%
JBI Lehman ABS Cp 7.857% 7.875 CP BACKED TR CERTS DUKE CAPITAL SRS 2003-3 CL A-1 4.53 4.54 4.44 4.46 1.18M -2.19%
ASRV AmeriServ Financial, Inc 4.99 4.99 4.84 4.84 359 -2.22%
ZEPP Zepp Health Corporation 4.44 4.50 4.20 4.39 21.3K -2.23%
TLYS 4.80 5.00 4.60 4.80 732.5K -2.24%
JBLU JetBlue Airways Corporation 4.36 4.40 4.20 4.26 15.15M -2.29%
ROC Rockwood Holdings, Inc 4.22 4.30 4.22 4.26 9.7K -2.29%
FAC First Acceptance Corporation 5.03 5.08 4.90 5.00 79.8K -2.34%
LFCR Lifecore Biomedical Inc 4.15 4.23 4.13 4.15 26.9K -2.35%
PLU 4.59 4.66 4.28 4.49 179.5K -2.39%
IRWD Ironwood Pharmaceuticals, Inc. 4.13 4.18 4.05 4.07 778.5K -2.40%
LWLG Lightwave Logic Inc 4.76 4.91 4.62 4.66 1.44M -2.51%
SMCY YieldMax SMCI Option Income Strategy ETF 5.13 5.14 4.91 4.93 1.49M -2.57%
WVE Wave Life Sci Ord Sh 4.51 4.61 4.40 4.46 1.51M -2.62%
GTN Gray Television, Inc 4.79 4.83 4.69 4.79 972.9K -2.64%
PASG Passage Bio Inc 4.83 4.85 4.70 4.79 7.6K -2.64%
SPRC SciSparc Ltd 4.63 5.14 4.50 4.78 10.7K -2.65%
NUS Nu Skin Enterprises, Inc 4.83 4.83 4.68 4.75 188.4K -2.66%
OABI OmniAb Inc 4.39 4.66 4.24 4.35 500.1K -2.68%
USAS Americas Silver Corp 4.90 4.90 4.62 4.69 2.26M -2.70%
STEM StemCells, Inc 4.75 4.75 4.55 4.63 65.1K -2.73%
MCRB Seres Theraptc 5.36 5.36 4.53 4.61 26.4K -2.74%
NKLR 4.80 4.80 4.44 4.60 285.9K -2.75%
RMNI Rimini Street Inc 4.69 4.69 4.54 4.58 171.1K -2.76%
AMIX Autonomix Medical Inc. 4.27 4.45 4.13 4.21 107.1K -2.77%
AIBZ 4.16 4.16 3.99 4.06 295.6K -2.87%
JVA Coffee Holding Co 4.24 4.24 4.00 4.05 63.8K -2.88%
VNDA Vanda Pharmaceuticals Inc 5.10 5.17 4.96 5.00 428.2K -2.91%
SCLX Scilex Holding Company 5.10 5.22 4.85 4.96 29.9K -2.94%
ARBB ARB IOT Group Ltd 4.50 4.79 4.23 4.23 1.6K -2.98%
BBOT 5.07 5.09 4.72 4.88 442.6K -2.98%
NXL Nexalin Technology Inc 5.08 5.10 4.80 4.87 6.8K -2.99%
ABR Arbor Realty Trust, Inc 4.73 4.73 4.52 4.52 3.12M -3.00%
IPWR Ideal Power Inc 4.44 4.44 4.06 4.21 243.2K -3.00%
ARKO ARKO Corp 4.52 4.57 4.37 4.43 422.2K -3.06%
CRMX 4.33 4.33 4.08 4.12 83.7K -3.06%
TREO 4.83 5.08 4.60 4.75 24.3K -3.06%
SLE Sara Lee Corp 4.57 4.80 4.33 4.42 148.8K -3.07%
TIGR TigerLogic Corp 4.85 4.91 4.70 4.71 1.95M -3.09%
BODI Beachbody Company Inc (The) 5.31 5.40 4.92 5.00 14.5K -3.10%
ALBG 5.09 5.18 4.93 4.99 25.8K -3.11%
MLCO Melco Resorts & Entertainment 4.80 4.86 4.64 4.65 1.67M -3.13%
SPAI Safe Pro Group Inc 4.40 4.59 4.31 4.31 75.4K -3.15%
TLRY Tilray Inc 4.14 4.15 3.98 4.00 2.8M -3.15%
NEPH Nephros Inc 4.54 4.54 4.22 4.29 10K -3.16%
MBI MBIA Inc 4.61 4.61 4.44 4.50 461.5K -3.23%
NABL N-able Inc 4.10 4.19 3.99 4.03 1.68M -3.36%
KPDD 4.75 4.80 4.57 4.58 121.6K -3.38%
POCI Precision Optics Corp., Inc. 4.36 4.36 4.21 4.21 23K -3.44%
MOB Mobilicom Limited 4.57 4.65 4.41 4.46 57.4K -3.46%
MSAI Infrared Cameras Holdings Inc 4.76 4.76 4.72 4.72 1.4K -3.48%
MGNX Macrogenics 4.19 4.19 3.99 4.04 161.9K -3.58%
FNG Advisorshares New Tech and Media ETF 4.39 4.45 4.13 4.16 256K -3.70%
SNWV 4.28 4.33 4.07 4.12 65.4K -3.74%
VRCA Verrica Pharmaceuticals Inc 4.75 4.77 4.51 4.59 38.4K -3.97%
FOMG 4.55 4.86 4.43 4.48 6K -4.07%
ERNA Eterna Therapeutics Inc 4.08 5.02 3.25 4.09 434.8K -4.22%
IMSR 4.48 4.50 4.18 4.29 1.23M -4.24%
USGG 5.10 5.25 4.90 4.95 318.4K -4.26%
LULG 4.17 4.18 3.92 4.03 572.4K -4.28%
BUR Burford Capital Limited 4.34 4.39 4.15 4.20 931.7K -4.33%
UUU Universal Security Instruments, Inc 5.31 5.31 4.81 4.81 9.8K -4.37%
HRZN Horizon Technology Finance Corporation 4.92 4.98 4.68 4.69 747.8K -4.48%
OGCP Empire State Realty Op LP Se 4.10 4.10 4.10 4.10 116 -4.65%
SCYX Scynexis Inc 4.60 4.63 4.37 4.38 59.9K -4.78%
FGL 5.09 5.09 4.20 4.75 66.5K -4.81%
INSG Inseego Corp 4.30 4.37 4.04 4.13 121.9K -4.84%
CVV CVD Equipment Corporation 4.71 4.75 4.46 4.50 111.2K -4.86%
CURX 4.56 4.69 4.25 4.29 4.8K -4.88%
FHTX Foghorn Therapeutics Inc 4.30 4.38 4.09 4.13 283.2K -5.06%
DLTH Duluth Hld Cl B 4.46 4.50 4.28 4.29 69.6K -5.09%
CLRO ClearOne Communications, Inc 4.58 5.10 4.40 4.45 13.1K -5.32%
ZURA Zura Bio Ltd 5.26 5.47 4.74 4.92 1.95M -5.57%
MPG Maguire Properties, Inc 4.27 4.35 4.00 4.05 114.7K -5.59%
CSHR 5.04 5.04 4.66 4.86 209.7K -5.63%
SPRY ARS Pharmaceuticals Inc 4.51 4.53 4.22 4.24 2.21M -5.78%
LENZ LENZ Therapeutics Inc. 4.44 4.44 4.21 4.22 606.7K -5.80%
ADBG Leverage Shares 2X Long ADBE Daily ETF 4.46 4.59 4.34 4.35 1.7M -5.84%
XNDX 4.90 4.91 4.48 4.62 51.8K -5.91%
TMCR Metals Royalty CO Inc 5.35 5.55 4.68 4.89 70.3K -5.96%
QSU 5.15 5.20 4.74 4.84 173.1K -6.02%
MSTW 4.29 4.30 3.98 4.15 4.05M -6.11%
SEAT Vivid Seats Inc 4.69 4.75 4.36 4.40 63.2K -6.18%
FRMI 5.10 5.15 4.68 4.74 17.18M -6.32%
BNC 5.13 5.19 4.75 4.92 1.19M -6.46%
SSTK Shutterstock Inc 5.25 5.35 4.83 4.86 484.5K -7.43%
UNCY Unicycive Therapeutics Inc 5.14 5.30 4.71 4.72 1.47M -8.35%
UPC Universe Pharmaceuticals INC 4.38 4.74 4.37 4.39 46.9K -8.35%
CLOV Clover Health Investments Corp 5.06 5.15 4.59 4.66 8.64M -8.45%
RYOJ 4.28 4.40 3.90 4.00 13.4K -8.47%
FLYT Flight To Safety Strategy ETF Direxion 4.68 4.88 4.41 4.42 155.1K -8.49%
PAVM Pavmed Inc 4.11 4.36 3.70 4.00 26.6K -8.88%
UONE Urban One Inc 4.35 4.69 4.01 4.19 20.1K -9.11%
GEMI 4.80 4.80 4.30 4.36 1.62M -9.36%
OPEX 5.27 5.30 4.75 4.83 158K -9.55%
CNXU 5.00 5.00 4.36 4.48 91.2K -10.40%
SWVL Swvl Holdings Corp 5.02 5.99 4.77 4.90 262K -10.42%
DFDV 5.17 5.17 4.56 4.63 1.67M -11.30%
ATGL Alpha Technology Group Ltd 5.12 5.12 4.52 4.52 2.9K -11.72%
DBGI Digital Brands Group Inc 5.18 5.55 4.20 4.43 334K -14.31%
GLGG 4.63 4.63 3.97 4.07 41.5K -15.21%
GLXU 5.40 5.49 4.60 4.74 150.7K -15.21%
COIG Leverage Shares 2X Long COIN Daily ETF 5.57 5.74 4.70 4.90 249.6K -20.33%
ARMP Armata Pharmaceuticals Inc 5.28 5.37 4.23 4.37 535.1K -22.79%

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How to trade stocks under $5?

There are various ways to trade stocks under $5, such as the breakout trading strategy and the pullback strategy that we will be discussing below.

To make money from trading, we will be utilizing technical analysis and stock chart patterns to swing trade in the stock market. If you are new to trading, you may want to read the following articles.
How to Read a Stock Chart Top 10 Stock Chart Patterns Introducing Technical Analysis
The tools that we will be using are stock charts and the strategies are as follows. Oftentimes, when a stock makes a massive move and then falls over 60-80%, there is a possibility that the stock may make smaller bounces before falling again.

The trick is to buy into one of these stocks before the second bounce. Especially, here's the trading strategy that we will be using.


Trading Strategy

We've already discussed this low cap strategy in detail in the article Penny Stocks Trading Strategy. In summary, here's what the trading strategy does.

  • Low Price - We will look for stocks trading in the range of $0.8 to $5 on NASDAQ, NYSE, or AMEX. We are not interested in stocks trading on the OTCBB market.
  • Big Rally - The stock must be up at least 80% recently, with a single spike of 30% or more in 1 day. The trading volume must be huge compared to the average trading volume of the stock.
  • Plunge - The stock then falls over 40% from its peak close or 65% from the intraday high with low trading volume.


Here are three recent stock patterns that matched the criteria. All three stocks were taken from November 4, 2020.

If we look at the stock charts of the above stocks which met all of our trading criteria, the big rise, and fall, we see that all the stocks made decent moves after that pattern occurred.

Our goal is not to make money from the initial big rise, but to make money after the big fall because there is no pattern that I can find that predicts the first rise.


Stop Loss

Please note that not all stocks are going to perform that well and bounce in a week or two. Most of the time, the stocks either don't move or may even drop further.

During those times, we must cut our losses short and move on to the next trade. The reason most stock market beginners lose money in the stock market is that they never cut losses short. They always allow the losses to pile up and cut their profits too quickly.

The pattern that we showed above doesn't work all the time. In fact, it doesn't work at all when the general market is down. Therefore, we must protect ourselves with tight stop losses. That way, when we lose, we lose small. When we win, we win big.




Profit Target

Just like a stop loss, we also need a profit target. Without a proper profit-taking strategy, you may give up most of your gains back to the market. Here are a few strategies that you may test and see which one works the best for you, or you can come up with your own profit-taking strategy.

In general, you want to have a target price that gives you at least a 1:2 risk-reward ratio, meaning if you are risking $1 on a trade, your trade should have the potential to make $2.

  • Target price - you can set a target price at the next resistance level assuming the target price gives you the proper risk-reward ratio.
  • Percent - you can set a percentage gain target. For example, if your stop loss is 10%, your profit target might be 20%.
  • Let your profit run - you can have your whole position on and let the profits run until the stock pulls back. The problem with this strategy is that you could give up most of your gains.
  • Exit partially - you can have multiple target prices. As soon as the stock hits your first profit target, sell half your position. When the stock hits your next profit target level, exit the rest of the position. To protect your profit, you should move up the stop loss from your initial entry point as the stock goes higher.

Position Size

Position size is always important in any trade. Many beginners have a position size that is too large that could wipe them out in one bad trade.

Remember, no matter how good a pattern looks or how good a trade setup appears to be, there is still a chance that it may fail. If we lose a lot of money on one trade, not only would it crush our confidence in trading, but it would also ruin our account.

Therefore, the goal of trading is not to make a lot of money on any one trade and get rich quickly. The goal is to get rich slowly making thousands of trades in the long term.

The position size of any trade should be less than 10% of your account size, preferably 5%. On top of that, you should have stop loss with any trade you enter, so that you will be risking less than 2% on any trade relative to the size of your portfolio.


Market Direction

When the market is bullish, you will see a lot of stocks making big moves, and your trades are working out nicely.

On the other hand, when the market is bearish, you may not find any stocks to trade or the trades just don't work. In that case, you should stay out of the market. It could be a few days, a few weeks, or even several months.

Most of us have no way to predict the market direction, but we do know whether we are winning or losing.

The goal of trading is to make money, if you are starting to lose money, there is no point to be in the market.

However, many beginners do the exact opposite. When they lose money, they start to increase their position size trying to make the money that they just lost. This is called revenge trading, and it is very dangerous.

When traders start to trade with their emotions instead of logic, they are on their way to donating their money to the market.




Trading Psychology

Psychology is critical for trading success, yet is ignored by most beginner traders. To me, trading psychology is more important than any strategy.

You may have a trading strategy that works 80% of the time but without the mental discipline to keep yourself from losing most of your money on the other 20%, you will still end up a loser.

A sound trading strategy without knowing anything about trading psychology is not enough to be the market. One may have the best strategy in the world, but if he fails to execute trades at the right time is going to lose money.

When we look at the stock charts and technical analysis without investing any money, we all can think logically.

However, as soon as we have our money loaded on the stocks, we act differently. All of our thinking may be based on how much we would make or lose on a trade instead of focusing on the pattern itself.

We should treat the stock market calmly and if we are confident with our trading decisions and system, we will make money. On the other hand, if our decisions are based on fear and greed, we will lose money.


Learn From Your Mistake

It's important to learn from your own mistakes or the mistakes of others. Then come up with a set of rules that you should follow for every trade.

You can modify your rules as you gain more experience. However, don't change your rule while you are already in a trade.

For example, if you have a rule that says you must cut your loss at 10% for all trades. And you already have a stock that is going against you with a 10% loss. You cannot move your stop loss lower in order to stay in the trade, you must cut the loss and move on.

If you find a 10% loss is not the optimal stop loss for your trading strategy, you can modify your rule to set the stop loss at 8% or even 12%. But you can only do that after a trade is over, and the rules that you set should be based on your experience.


Keep a Trading Journal

Most successful traders keep a trading journal that tracks all of their trades. A trading journal allows them to go back and study their past trades and find the flaws in their trading system.

Tracking and improving are necessary for traders to stay in this game for the long run. You don't see beginners do that because they are always trying to find a magic stock that would make them rich. Unfortunately, the stock market is not a place where you can make quick money.

Keep a trading journal if you are serious about trading and making money from the market. If you can find a few mistakes in your trading system and improve it, it could translate into cash.

Treat trading as a business, not a hobby. A trading journal should track at least the following.

  • The entry price
  • Position size - record how many shares you buy and how much you are trading with.
  • The reason for entry
  • The strategy - If you have multiple trading strategies, you should log the strategy that you are using.
  • The entry stock charts - you can attach the weekly, daily, or intraday chart depending on the time frame that you trade with
  • The market sentiment - you can log the Dow and NASDAQ, this gives you an idea of whether the market is bullish or bearish when you enter the trade. When the general market is in panic, it is hard to make money going long.
  • The exit price
  • The reason for exit
  • The exit stock charts - you should include the charts when you exit the trade.
  • The market sentiment - is the Dow and NASDAQ up or down when you exit the trade?
  • The profit/loss - how much did you make or lose on this trade in terms of percentage.

You can add or remove items from this list to fit your own trading style.




What stock can I buy for $5?

There are many stocks under $5 that are worth watching for traders with a small account. Let's face it, one share of Amazon stock costs over $3,000. If you have only $2,000 to invest, you cannot even purchase one share of Amazon stock.

That is not to say Amazon stock is not a good stock, or you shouldn't be buying high-priced stocks. In fact, it's the exact opposite. Expensive stocks are trading at high prices for a good reason, they are usually better, safer, and have more potential to grow over the long term.

These companies usually have stronger fundamentals, product lines that are not easily replicated by others, a great leadership team, and loyal fans of their products. All of these mean the company is making tons of money with excellent income statements and balance sheets.

However, for small traders with limited funds, you may consider stocks that are trading under $5. Some of these stocks may go up much faster than the blue-chip stocks. It is much harder for stocks trading at $100 to double up to $200, but a $5 stock may go up to $10 in a much shorter period of time.

Of course, buying stocks under $5 is much riskier, because companies with a stock price of $5 or lower generally don't do well at the moment. The odds of these low-price stocks going bankrupt in the long term are much higher than the possibility of doubling up.

For this reason, we are not interested in investing in these low-price stocks, these are stocks to be traded for the short term. If we buy any of the stocks, we usually sell them in a short time frame, anywhere from a couple of days to a few weeks maximum.


How to Find Hot Stocks Under $5

You can use our free stock screener to scan for hot stocks under $5. Our stock screener gives you the option to scan for popular technical indicators and find stocks that match these patterns.

Some of the technical indicators that you scan for are price and volume actions, moving averages, candlestick patterns, stochastic oscillators, RSI, MACD, and many more.

You can read the following article on how to use our stock screener and find stocks for swing trading.

How to Find Stocks For Swing Trading