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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.

6/17/2026

>> 10 Stock Chart Patterns That Tell You When to Buy & Sell <<
Symbol Chart Company Open High Low Close Volume % Change
ELTX Elicio Therapeutics Inc. 2.79 6.64 1.66 4.72 42.7M 72.26%
CAST Chinacast Education Corporation 3.59 5.18 3.23 5.00 10.65M 31.58%
CRE Care Investment Trust Inc 3.70 7.11 3.32 4.27 5.51M 29.79%
ANY Sphere 3D Corp 3.61 4.29 3.42 4.20 1.15M 21.39%
BOF BranchOut Food Inc 3.75 4.38 3.50 4.22 286.2K 21.26%
INDP Indaptus Therapeutics Inc 3.68 4.94 3.64 4.47 673.4K 16.71%
STTK Shattuck Labs Inc 4.40 4.77 4.34 4.77 465.9K 10.16%
QNTM Quantum Biopharma Ltd 3.63 4.22 3.60 4.01 213K 9.86%
ANNX Annexon Inc 4.60 4.96 4.47 4.93 1.56M 8.83%
FEMY Femasys Inc 4.00 4.49 3.86 4.19 49.4K 8.83%
QBTZ 4.00 4.54 3.97 4.53 4.23M 8.63%
LODE Comstock Mining Inc 4.37 4.96 4.31 4.69 2.47M 8.31%
IMRX Immuneering Corp 4.09 4.55 4.09 4.42 1.52M 7.80%
TKNO Alpha Teknova Inc 4.59 5.05 4.59 4.95 111.9K 7.61%
APVO Aptevo Therapeutics Inc 4.55 4.91 4.50 4.87 13.9K 7.27%
HELP 4.35 4.63 4.24 4.59 563.3K 6.74%
JRSH Jerash Holdings Inc 4.08 4.70 3.96 4.48 1.09M 6.67%
AEC Associated Estates Realty Corporation 4.15 4.39 4.04 4.39 22.9K 6.30%
TARA Artara Therapeutics Inc 3.90 4.13 3.83 4.06 528.1K 6.28%
CDZI Cadiz Inc 3.86 4.08 3.78 4.01 497.7K 6.08%
SHPH Shuttle Pharmaceuticals Holdings Inc 4.04 4.57 3.99 4.30 43K 5.91%

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OWLT Owlet Inc 4.50 4.89 4.50 4.68 223.5K 5.64%
TLIH 4.30 4.73 4.30 4.70 17.5K 5.62%
DWSN Dawson Geophysical Company 4.50 4.80 4.44 4.72 32.7K 5.36%
ADVB 4.47 4.89 4.46 4.75 6K 5.32%
SLNG Stabilis Solutions Inc 4.07 4.37 3.97 4.33 40.3K 5.10%
NWL Newell Rubbermaid Inc 4.69 5.26 4.69 4.98 15.8M 5.06%
RZLT Rezolute Inc 4.61 4.94 4.55 4.79 2.39M 5.04%
LINK Interlink Electronics 4.27 4.62 4.25 4.46 33.2K 4.45%
BESS 4.00 4.89 4.00 4.28 438.2K 4.39%
LXEO Lexeo Therapeutics Inc. 4.80 5.27 4.80 4.97 1.08M 4.19%
IRD 3.80 4.25 3.80 4.05 749.3K 4.11%
GVH Globavend Holdings Ltd. 4.19 4.21 3.95 4.16 10.9K 4.00%
AQST Aquestive Therapeutics Inc 4.20 4.48 4.20 4.44 1.64M 3.98%
NTWK NetSol Technologies Inc 4.47 4.55 4.46 4.53 2K 3.90%
KLRS 4.58 4.75 4.46 4.57 59K 3.86%
SKK ProShares UltraShrt Rusell2000 Grwt(ETF) 4.26 4.76 4.26 4.62 4K 3.82%
AIRJ Montana Technologies Corp. 4.41 4.70 4.21 4.37 1.06M 3.80%
VSTM Verastem Inc 4.14 4.40 4.01 4.17 1.89M 3.73%
LZM Lifezone Metals Ltd 4.34 4.67 4.31 4.51 560.6K 3.68%
PRLD Prelude Therapeutics Incorporated 4.20 4.43 4.07 4.34 135.7K 3.58%
BWEN Broadwind Energy Inc 4.78 5.23 4.34 4.92 1.1M 3.36%
OPTH 4.07 4.46 4.01 4.35 93.8K 3.33%
ROC Rockwood Holdings, Inc 4.87 4.87 4.56 4.75 27.7K 3.26%
OSUR OraSure Technologies, Inc 4.32 4.58 4.10 4.47 517K 3.23%
DIBS 1stdibs.com Inc 4.05 4.26 3.92 4.18 166K 3.21%
MYGN Myriad Genetics, Inc 4.26 4.44 4.22 4.38 456.3K 3.06%
RADX 4.52 4.52 4.35 4.49 13.3K 2.98%
CORD 3.94 4.26 3.78 4.24 5.82M 2.91%
ALTO Alto Ingredients Inc 4.94 5.16 4.81 4.95 1.9M 2.48%
TZA Direxion Daily Small Cap Bear 3x Shares 4.13 4.31 4.01 4.26 336.64M 2.16%
AVIR Atea Pharmaceuticals Inc 4.27 4.46 4.27 4.34 129.4K 2.12%
BOSC B 4.27 4.39 4.25 4.36 41.1K 2.11%
FOCL Edap Tms Sa ADR 4.69 4.86 4.65 4.86 45.9K 2.10%
LSF Laird Superfood Inc 4.79 5.00 4.60 4.79 75.5K 1.91%
ANTX AN2 Therapeutics Inc 4.74 5.08 4.74 4.89 147K 1.88%
ACRS Aclaris Therapts 4.35 4.52 4.30 4.42 715.4K 1.84%
GEMI 4.74 5.10 4.61 4.79 1.08M 1.70%
KFFB Kentucky First Federal Bancorp 4.78 4.78 4.78 4.78 150 1.70%
LFMD LifeMD Inc 4.71 5.07 4.71 4.92 624.6K 1.65%
OKUR Onkure Therapeutics Inc 4.29 4.50 4.18 4.33 230.3K 1.64%
CAAS China Automotive Systems, Inc 4.40 4.54 4.40 4.47 12.5K 1.36%
YI 111 Inc ADR 4.71 4.71 4.40 4.49 3.3K 1.35%
TIGR TigerLogic Corp 4.66 4.79 4.65 4.72 1.66M 1.29%
UEIC Universal Electronics Inc 3.96 4.03 3.93 4.00 13.8K 1.27%
APYX Apyx Medical Corp 4.15 4.30 4.15 4.21 57.5K 1.20%
WHWK 4.19 4.50 4.18 4.22 481.8K 1.20%
UFI Unifi, Inc 4.00 4.20 4.00 4.00 29.4K 1.01%
NRGV Energy Vault Holdings Inc 4.03 4.32 3.96 4.11 3.34M 0.98%
BLDP Ballard Power Systems Inc 4.15 4.42 4.08 4.17 5.98M 0.97%
ABUS Arbutus Biopharma Cp 4.40 4.52 4.36 4.43 1.49M 0.91%
UGP Ultrapar Participacoes SA (ADR) 4.73 4.90 4.68 4.72 2.15M 0.85%
FHTX Foghorn Therapeutics Inc 4.02 4.24 3.99 4.06 82.7K 0.74%
XFOR X4 Pharmaceuticals Inc 4.06 4.11 3.99 4.06 274.2K 0.74%
CAMP CalAmp Corp 4.16 4.60 4.09 4.16 139.8K 0.73%
III Information Services Group, Inc 4.10 4.18 4.09 4.17 85.5K 0.72%
GRNT Granite Ridge Resources Inc 4.69 4.79 4.68 4.73 564.9K 0.64%
API Advanced Photonix, Inc 4.27 4.30 4.11 4.23 367.7K 0.48%
PODC Courtside Group Inc. 4.20 4.59 4.14 4.37 97.2K 0.46%
NXDT NexPoint Diversified Real Estate Trust 4.55 4.67 4.45 4.54 56.1K 0.44%
ACTG Acacia Research- Acacia Technologies 4.67 4.74 4.64 4.72 159.1K 0.43%
KXIN Kaixin Auto Holdings 4.62 4.89 4.56 4.82 23.9K 0.42%
TOUR Tuniu Corporatio Ads 4.66 5.00 4.66 4.76 3.1K 0.42%
GGR GeoGlobal Resources Inc 4.00 4.07 3.95 4.01 12.9K 0.25%
NEUP 4.28 4.44 4.28 4.33 11.6K 0.23%
PUSA Aureus Greenway Holdings Inc 4.45 4.70 4.03 4.40 659.1K 0.23%
TRVG Trivago NV 4.42 4.72 4.42 4.47 92K 0.22%
TSI TCW Strategic Income Fund Inc 4.48 4.50 4.46 4.49 124.6K 0.22%
SPAI Safe Pro Group Inc 5.05 5.11 4.71 4.85 62.6K 0.21%
FSCO FS Credit Opportunities Corp 4.92 4.97 4.90 4.94 1.03M 0.20%
PAVM Pavmed Inc 4.99 5.00 4.90 5.00 2.6K 0.20%
ATXG Addentax Group Corp 4.85 4.98 4.72 4.72 3.5K 0.00%
BCYC Bicycle Therapeutics Plc ADR 4.04 4.24 4.00 4.03 783.3K 0.00%
GURE Gulf Resources Inc 3.84 4.02 3.84 4.02 1.2K 0.00%
KOPN Kopin Corporation 4.90 5.20 4.83 4.86 4.05M 0.00%
PONX 4.37 4.61 4.27 4.31 108.9K 0.00%
QNRX Quoin Pharmaceuticals Ltd 4.66 4.66 4.46 4.48 8.6K 0.00%
SIGA SIGA Technologies, Inc 4.32 4.36 4.25 4.31 359.8K 0.00%
TBH Brazilian Telecom HOLDRS 3.96 4.10 3.90 4.02 28.6K 0.00%
EVF Eaton Vance Senior Income Trust 4.97 4.99 4.96 4.98 63.7K -0.20%
LOAN Manhattan Bridge Capital Inc. 4.47 4.48 4.36 4.37 13.2K -0.23%
RVSN RADVISION LTD 4.60 4.60 4.34 4.43 1K -0.23%
FINV Finvolution Group 4.85 4.91 4.80 4.82 293.4K -0.41%
PRHI 4.83 5.18 4.82 4.91 12K -0.41%
GLOO 4.81 4.84 4.56 4.71 90.1K -0.42%
JQC Nuveen Multi-Strategy Inc & Growth Fd 2 4.81 4.82 4.78 4.79 526.6K -0.42%
#1 Stock Chart Pattern
Top 10 Penny Stocks
EVH Evolent Health Inc Cl A Com 4.67 4.86 4.57 4.68 1.57M -0.43%
MMT MFS Multimarket Income Trust 4.52 4.53 4.50 4.51 98.7K -0.44%
AMBP Ardagh Metal Packaging S.A. 4.34 4.49 4.27 4.35 1.24M -0.46%
AMPY Amplify Energy Corp 4.04 4.18 4.04 4.07 730K -0.49%
CVRX CVRx Inc 4.85 5.05 4.83 4.84 162.1K -0.62%
PGEN Precigen Inc 4.76 4.90 4.70 4.71 3.05M -0.63%
TLYS 4.60 4.70 4.53 4.58 81.6K -0.65%
PHK PIMCO High Income Fund 4.55 4.59 4.53 4.55 594.3K -0.66%
BUR Burford Capital Limited 4.42 4.66 4.38 4.42 1.58M -0.67%
LAC Lithium Americas Corp 4.51 4.71 4.41 4.42 10.16M -0.67%
DLTH Duluth Hld Cl B 4.31 4.40 4.20 4.22 120K -0.71%
GGT Gabelli Global Multimedia Trust Inc 4.25 4.26 4.20 4.21 566.9K -0.71%
OMSE 4.17 4.17 4.06 4.11 10.6K -0.72%
TGL Treasure Global Inc 4.15 4.25 4.12 4.12 12.5K -0.72%
BORR Borr Drilling Ltd 4.36 4.44 4.25 4.28 4.34M -0.93%
CETX Cemtrex Inc 4.12 4.18 4.02 4.10 14.5K -0.97%
MWC 4.11 4.11 3.70 4.00 35.9K -0.99%
NUS Nu Skin Enterprises, Inc 5.10 5.17 4.92 4.98 703.4K -0.99%
MSOS AdvisorShares Pure US Cannabis ETF 4.80 4.92 4.72 4.77 5.27M -1.04%
WXM 4.51 6.95 3.83 4.24 943.1K -1.17%
Top 10 Candlestick Chart Patterns
Today's Top 50 Stocks
IDN Intelli-Check - Mobilisa, Inc 4.17 4.28 4.14 4.14 80.4K -1.19%
AIOT Powerfleet Inc 4.08 4.31 4.05 4.09 1.53M -1.21%
VSA 4.75 5.00 4.75 4.88 31.1K -1.21%
INTJ Intelligent Group Ltd 4.61 4.65 4.51 4.55 2.5K -1.30%
DOYU Douyu International Holdings Ltd Ads 4.53 4.57 4.45 4.46 28.8K -1.33%
CVU CPI Aerostructures, Inc 4.90 5.04 4.79 4.84 15.4K -1.43%
ATAI ATA Inc 4.03 4.24 3.99 4.08 3.25M -1.45%
IONR ioneer Ltd 4.10 4.21 3.97 4.01 44.1K -1.47%
GCV Gabelli Convertible & Income Securities 4.60 4.67 4.53 4.54 29.6K -1.52%
PPSI Pioneer Pwr Sol 4.63 4.63 4.22 4.34 51.1K -1.59%
RSKD Riskified Ltd 5.00 5.00 4.89 4.89 749.5K -1.61%
OPAD Offerpad Solutions Inc 4.90 5.15 4.80 4.80 25.9K -1.64%
MPT Western Asset Municipal Partners Fund Ii Inc. 4.90 4.91 4.72 4.76 7.58M -1.65%
RMNI Rimini Street Inc 4.14 4.26 4.10 4.11 347K -1.67%
PYPD Polypid Ltd 4.61 4.76 4.56 4.59 17.7K -1.71%
RXST RxSight Inc 4.71 4.83 4.56 4.59 549.9K -1.71%
ENIC Enersis Chile S.A. ADR 4.68 4.72 4.57 4.58 294.3K -1.72%
SITC Site Centers Corp 4.79 4.83 4.68 4.72 379K -1.87%
ONDG 4.30 4.49 4.11 4.17 1.4M -1.88%
CD Avis Budget Group Inc 4.84 4.87 4.37 4.74 87.9K -2.07%
SONM Sonim Technologies Inc 4.62 5.14 4.62 4.70 1.7K -2.08%
TORO Toro Corp 5.24 5.24 4.98 4.98 23.1K -2.16%
CRCT Cricut Inc 4.50 4.55 4.38 4.41 233.7K -2.22%
FIP FTAI Infrastructure Inc 4.85 5.05 4.74 4.75 380.4K -2.26%
FIEE FI Enhanced 2X Europe 50 ETN 4.33 4.33 4.30 4.30 1.2K -2.27%
FF First Opportunity Fund, Inc 4.33 4.35 4.21 4.24 122.9K -2.30%
LPL LG Display Co Ltd 4.50 4.72 4.50 4.56 1.73M -2.36%
IGR ING Clarion Global Real Estate Income Fd 4.65 4.66 4.52 4.53 566.1K -2.37%
PXS Pyxis Tankers 4.46 4.52 4.39 4.40 14.1K -2.44%
EARN Ellington Residential Mortgage 4.58 4.61 4.34 4.38 687.1K -2.45%
TLRY Tilray Inc 4.88 4.97 4.71 4.77 3.02M -2.45%
TJGC 4.62 4.70 4.61 4.65 13.8K -2.52%
LSAK Lesaka Technologies Inc 4.70 4.73 4.51 4.56 71.1K -2.56%
CRCD 4.79 5.03 4.23 4.77 4M -2.65%
RGP Resources Connection Inc 4.39 4.49 4.27 4.28 477.1K -2.73%
GLBZ Glen Burnie Bancorp 4.57 4.62 4.55 4.55 2.5K -2.78%
GGB Gerdau SA (ADR) 4.61 4.65 4.48 4.49 11.77M -2.81%
TMCI Treace Medical Concepts Inc 3.99 4.26 3.88 4.01 536.2K -2.91%
FGI SunAmerica Focused Alpha Large Cap Fund 4.73 5.23 4.59 4.64 53.2K -2.93%
IMPP Imperial Petroleum Inc 5.02 5.13 4.87 4.94 366.9K -2.95%
PTLO Portillos Inc 4.48 4.50 4.20 4.21 683.7K -3.00%
BOLT Bolt Technology Corp 4.60 4.69 4.14 4.18 99.8K -3.02%
CLOV Clover Health Investments Corp 4.94 4.96 4.72 4.80 5.97M -3.03%
BTE Baytex Energy Trust (USA) 4.19 4.30 4.07 4.09 15.22M -3.08%
BJDX Bluejay Diagnostics Inc 4.51 4.59 4.24 4.54 24.3K -3.20%
HTZ Hertz Global Holdings, Inc 4.98 5.04 4.75 4.84 5.33M -3.20%
ASTL Algoma Steel Group Inc 4.89 5.00 4.74 4.75 422.9K -3.26%
BTG B2Gold Corp 4.58 4.67 4.40 4.42 27.15M -3.28%
LSE CapLease, Inc 4.16 4.26 3.98 4.11 7.2K -3.29%
TLS Telos Corp 4.52 4.55 4.31 4.37 346.9K -3.32%
SMWB Similarweb Ltd 5.07 5.17 4.79 4.88 582.1K -3.37%
TPVG Triplepoint Venture Growth Bdc 5.14 5.14 4.92 4.95 279.8K -3.51%
AMCI Amci Acquisition Corp Cl A 4.43 4.56 4.20 4.30 24K -3.59%
JRVR James River Gp HD 4.16 4.22 4.01 4.02 263.7K -3.60%
GRDX Entero Therapeutics Inc 5.33 5.47 4.90 4.92 65.2K -3.72%
SMCY YieldMax SMCI Option Income Strategy ETF 5.21 5.21 4.90 4.91 905.6K -3.73%
OPRT Oportun Financial Corp 5.25 5.33 4.99 5.00 245.2K -3.85%
CLIR Clearsign Combustion 4.14 4.14 4.02 4.07 8.4K -4.01%
CNSP Cns Pharmaceuticals Inc 4.58 4.58 4.53 4.53 5.3K -4.03%
CDLX Cardlytics Inc 5.27 5.48 4.94 4.96 33.5K -4.06%
SOXS Direxion Daily Semiconductor Bear 3x Shares 4.25 4.46 3.92 4.45 633.24M -4.09%
CSHR 4.52 4.70 4.16 4.20 81.5K -4.11%
TXXD 4.70 4.86 4.58 4.58 44.4K -4.18%
BHC Bausch Health Companies Inc 4.99 5.00 4.75 4.75 1.51M -4.23%
NERV Minerva Neuroscie 4.38 4.44 4.17 4.19 113.3K -4.34%
FWDI 4.79 4.98 4.58 4.62 783.3K -4.35%
ANPA 5.07 5.12 4.63 4.84 2.7K -4.54%
XYF X Financial 4.95 4.99 4.67 4.72 89.6K -4.65%
HSLV 5.09 5.20 4.85 4.86 327.3K -4.71%
AIRS Airsculpt Technologies Inc 5.05 5.23 4.79 4.79 336.8K -4.77%
TBLA Taboola.com Ltd 5.20 5.20 4.77 4.78 1.88M -4.97%
FOSL Fossil, Inc 4.41 4.54 4.16 4.19 456.5K -4.99%
NAKA 4.45 4.55 4.22 4.24 115.5K -5.15%
HRZN Horizon Technology Finance Corporation 4.34 4.41 4.10 4.14 1.02M -5.26%
AGNT Argonaut Technologies Inc. 4.89 4.99 4.65 4.66 612.2K -5.28%
ACRE Ares Commercial Real Estate Cor 4.81 4.89 4.58 4.61 461.5K -5.34%
UECG 5.18 5.40 4.75 4.75 105.3K -5.38%
NTHI 4.69 5.50 4.69 4.91 81.8K -5.39%
HTCO Hickory Tech Corporation 4.46 4.48 4.06 4.08 410.9K -5.56%
NCTY The9 Limited (ADR) 5.17 5.20 4.86 4.88 32.9K -5.61%
MLGO MicroAlgo Inc 5.07 5.20 4.82 4.86 45.1K -5.63%
OPEN OpenTable Inc 4.84 4.86 4.45 4.46 36.78M -6.11%
XGN Exagen Inc 4.58 4.74 4.16 4.26 236.4K -6.17%
PSTV Plus Therapeutics Inc 4.60 4.67 4.28 4.33 139.1K -6.28%
MSTW 5.19 5.20 4.77 4.77 255.7K -6.29%
NEWP Newport Corporation 4.92 5.14 4.59 4.60 1.2M -6.50%
VRRM Verra Mobility Corp 5.01 5.19 4.70 4.70 4.05M -6.56%
CCC Calgon Carbon Corporation 4.73 4.74 4.33 4.40 9.74M -6.58%
JFB 5.13 5.40 4.73 4.76 433K -6.85%
PYPG Leverage Shares 2X Long PYPL Daily ETF 5.30 5.55 4.91 4.92 794.2K -6.99%
JG Aurora Mobile Ltd ADR 4.89 4.89 4.40 4.47 16.1K -7.64%
SNAP Snap Inc 5.22 5.23 4.70 4.74 65.01M -8.14%
CRMG Leverage Shares 2X Long CRM Daily ETF 4.45 4.45 4.00 4.04 3.58M -8.39%
OM Outset Medical Inc 4.42 4.43 4.00 4.04 53.3K -8.60%
XNET Xunlei Ltd ADR 5.44 5.46 4.97 4.97 636.7K -9.64%
MODD Modular Medical Inc 4.93 5.10 4.45 4.50 12.8K -10.36%
NOWL 4.73 4.81 4.10 4.13 17.15M -11.56%
OPEG 4.85 4.94 4.13 4.13 234K -12.87%
DSY Big Tree Cloud Holdings Ltd. 5.15 5.36 4.55 4.62 125.8K -13.32%
ZSTK 4.83 4.83 4.10 4.18 17.4K -13.46%
AMOD 5.39 5.85 4.32 4.34 81.6K -15.40%
SNAG 5.57 5.57 4.58 4.58 207.7K -15.96%
PCLA 5.72 5.81 4.88 4.88 51.1K -18.26%

Free Dividend Stock Screener

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