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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.

12/12/2025

>> 10 Stock Chart Patterns That Tell You When to Buy & Sell <<
Symbol Chart Company Open High Low Close Volume % Change
MKZR 3.79 5.00 3.63 4.39 279K 30.27%
BNKK 3.23 4.06 3.10 4.06 398.6K 26.09%
VFF Village Farms Intl 3.95 4.40 3.54 4.06 8.38M 17.00%
PULM Pulmatrix Inc 4.05 4.80 4.05 4.58 29.5K 15.66%
NCEW 4.71 7.10 4.30 4.89 371.1K 13.46%
YSG Yatsen Holding Ltd 4.50 4.82 4.25 4.35 717.2K 11.83%
KFFB Kentucky First Federal Bancorp 4.36 4.72 4.05 4.72 4.3K 11.32%
YHGJ Yunhong Green CTI Ltd 4.86 5.50 4.55 4.92 93.9K 10.56%
EHTH eHealth, Inc 4.07 4.56 4.07 4.51 346.3K 10.54%
WEST Western Sizzlin Corporation 4.48 4.75 4.36 4.63 783.5K 10.50%
ANVS Annovis Bio Inc 3.67 4.23 3.66 4.14 961.7K 9.23%
VTGN Vistagen Therap. Com 4.22 4.37 3.96 4.25 583.8K 7.59%
JMG Journal Media Group Inc. Commo 4.56 4.98 4.46 4.89 2.43M 7.24%
HIBS Direxion Daily S&P 500 High Beta Bear 3X Shares 4.66 5.00 4.63 4.95 2.55M 7.14%
FNGD Microsectors Fang+ -3X ETN 4.67 5.03 4.66 4.96 37M 7.13%
SPAI Safe Pro Group Inc 4.15 4.42 4.05 4.41 132.1K 6.27%
CING Cingulate Inc 4.18 4.48 4.15 4.44 195.4K 6.22%
AMWL American Well Corp Cl A 4.47 4.75 4.38 4.62 385K 6.21%
EVH Evolent Health Inc Cl A Com 3.99 4.13 3.89 4.13 1.83M 4.82%
ITRG Integra Resources Corp 4.17 4.36 4.11 4.33 2.35M 4.34%
HPAI Helport Ai Limited 4.00 4.41 3.97 4.10 29.2K 3.80%

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SST System1 Inc 4.39 4.57 4.13 4.39 10.9K 3.78%
CAAS China Automotive Systems, Inc 4.22 4.45 4.18 4.38 23.6K 3.55%
CTMX Cytomx Thera 4.09 4.21 3.93 4.20 1.43M 3.45%
BTCZ T-Rex 2X Inverse Bitcoin Daily Target ETF 3.84 4.08 3.81 4.01 24.58M 3.35%
RDGT 4.05 4.05 3.90 4.04 1.9K 3.32%
MAMO Massimo Group 4.16 4.38 4.01 4.29 56K 3.13%
GAIA Gaiam, Inc 3.95 4.09 3.88 4.06 116.1K 3.05%
SND Smart Sand Inc 3.92 4.17 3.91 4.05 343.3K 3.05%
QD Qudian Inc ADR 3.96 4.12 3.95 4.09 266.5K 3.02%
ENIC Enersis Chile S.A. ADR 3.98 4.01 3.93 4.01 537.1K 2.56%
GURE Gulf Resources Inc 4.88 4.91 4.62 4.88 26.1K 2.52%
NEUP 4.17 4.17 3.95 4.08 96.6K 2.51%
PSIG PS International Group Ltd 4.25 4.50 4.25 4.34 27.1K 2.12%
TPCS Techprecision Corp 4.39 4.45 4.32 4.42 21.5K 2.08%
AGH 4.20 4.25 3.97 4.18 10.4K 1.95%
ASTC Astrotech Corp 4.47 5.26 3.75 4.15 54.4K 1.72%
IONR ioneer Ltd 4.75 4.90 4.57 4.72 47.2K 1.72%
XFLT Xai Octagon Floating Alt Income Term Trust Compa 4.56 4.62 4.52 4.61 1.53M 1.54%
MI Marshall & Ilsley Corporation 3.86 4.22 3.61 4.06 24.2K 1.50%
JBLU JetBlue Airways Corporation 4.88 5.03 4.83 4.96 20.85M 1.43%
YRD Yirendai Ltd 4.32 4.44 4.32 4.39 47K 1.39%
FGBI First Gurty Banc 4.77 4.93 4.75 4.78 11K 1.27%
ORGO Organogenesis Holdings Inc 4.75 4.85 4.66 4.83 413.4K 1.26%
VSTA Vasta Platform Limited Cl A 4.94 4.97 4.92 4.96 3.2K 1.22%
SBC Sbc Medical Group Holdings Inc 4.12 4.25 4.12 4.18 39.9K 1.21%
ABUS Arbutus Biopharma Cp 4.79 4.81 4.61 4.72 1.23M 1.07%
TZUP 4.85 5.00 4.60 4.86 165.4K 1.04%
LRMR Larimar Therapeutics Inc 4.01 4.09 3.89 4.06 513.2K 1.00%
ODV Osisko Development Corp 4.05 4.24 3.94 4.07 1.59M 0.99%
GANX Gain Therapeutics Inc 4.12 4.34 4.03 4.14 1.68M 0.98%
TEF Telefonica S 4.28 4.31 4.26 4.27 822K 0.95%
BGSF Bg Staffing 4.28 4.50 4.28 4.48 64.6K 0.90%
KORE Kore Group Holdings Inc 4.58 4.58 4.30 4.50 35.8K 0.90%
AIRG Airgain Inc 4.03 4.06 3.86 4.05 30.7K 0.75%
AMBP Ardagh Metal Packaging S.A. 4.08 4.15 4.08 4.11 741K 0.74%
LEE Lee Enterprises, Incorporated 4.24 4.35 4.05 4.16 11.9K 0.73%
ADCT ADC Telecommunications 4.11 4.32 4.07 4.22 715.9K 0.72%
TACT TransAct Technologies Incorporated 4.39 4.40 4.19 4.30 35.6K 0.70%
DVS 4.79 4.85 4.54 4.65 1.05M 0.65%
IMNN Imunon Inc 4.13 4.25 4.12 4.15 19.4K 0.48%
EPM Evolution Petroleum Corporation 4.20 4.20 4.02 4.08 400.7K 0.25%
TBLA Taboola.com Ltd 4.04 4.10 4.02 4.04 1.27M 0.25%
HLLY Holley Inc 4.27 4.33 4.21 4.24 626.5K 0.24%
FKWL Franklin Wireless Corp 4.43 4.55 4.43 4.45 9.5K 0.23%
OPHC OptimumBank Holdings, Inc 4.33 4.37 4.29 4.33 16.6K 0.23%
CINT CI&T Inc 4.50 4.56 4.49 4.52 90.6K 0.22%
DHC Diversified Healthcare Trust 4.83 4.83 4.66 4.70 406.9K 0.21%
LOAN Manhattan Bridge Capital Inc. 4.85 4.93 4.85 4.87 6.4K 0.21%
LVWR LiveWire Group Inc 4.98 5.13 4.82 4.98 51.5K 0.20%
SEV Sono Group N.V. 4.90 5.05 4.50 4.92 183.1K 0.20%
BRBS Blue Ridge Bankshare 4.55 4.55 4.47 4.53 374.5K 0.00%
EDF CITIGROUP FDG 4.80 4.82 4.72 4.77 180.4K 0.00%
EKSO Ekso Bionics Holdings Inc 4.53 4.89 4.53 4.68 35K 0.00%
ELSE Electro-Sensors, Inc 4.48 4.55 4.47 4.55 1.8K 0.00%
FEED AgFeed Industries, Inc 4.50 5.00 4.00 4.27 19.3K 0.00%
FLYX flyExclusive Inc. 4.04 4.12 3.94 4.12 1.6K 0.00%
KGEI Kolibri Global Energy Inc 4.08 4.16 3.99 4.07 103.6K 0.00%
LSE CapLease, Inc 4.79 4.88 4.79 4.88 594 0.00%
MGRT 5.12 5.16 4.55 4.77 5.4K 0.00%
PPSI Pioneer Pwr Sol 4.15 4.21 4.05 4.12 21.7K 0.00%
PW-A Power REIT 7.75% Series A Cumul 5.00 5.00 4.99 5.00 1.5K 0.00%
PWpA 5.00 5.00 4.99 5.00 1.5K 0.00%
SVCO Silvaco Group Inc. 4.41 4.55 4.30 4.39 71.6K 0.00%
TCRT Alaunos Therapeutics Inc 4.26 4.50 4.10 4.27 42.1K 0.00%
TSI TCW Strategic Income Fund Inc 4.92 4.96 4.92 4.94 64K 0.00%
SMJF 4.51 4.63 4.40 4.44 116.1K -0.22%
EB Eventbrite Inc 4.43 4.44 4.43 4.43 1.17M -0.23%
LSAK Lesaka Technologies Inc 4.43 4.43 4.31 4.34 4.6K -0.23%
SQFT Presidio Property Trust Inc 5.07 6.80 4.04 4.25 12.1K -0.23%
AREN Arena Group Holdings Inc (The) 4.14 4.24 3.89 4.11 86.8K -0.24%
GROY Gold Royalty Corp 4.23 4.25 3.97 4.09 2.36M -0.24%
RRGB Red Robin Gourmet Burgers, Inc 4.05 4.15 3.99 4.02 124.2K -0.25%
PHK PIMCO High Income Fund 4.86 4.87 4.83 4.83 855.7K -0.41%
MMT MFS Multimarket Income Trust 4.71 4.73 4.70 4.70 42.4K -0.42%
KLC Kindercare Learning Companies Inc 4.64 4.71 4.59 4.61 441K -0.43%
VYGR Voyager Therapeut 4.41 4.46 4.35 4.39 152.4K -0.45%
IGR ING Clarion Global Real Estate Income Fd 4.28 4.29 4.20 4.23 1.33M -0.47%
SOPH SOPHiA Genetics SA 4.63 4.81 4.51 4.72 73.2K -0.63%
IVA ValueRich, Inc 4.54 4.60 4.47 4.49 172.9K -0.66%
FHTX Foghorn Therapeutics Inc 4.55 4.64 4.43 4.46 47.1K -0.67%
DNUT Krispy Kreme Inc 4.41 4.56 4.36 4.40 1.95M -0.68%
LZM Lifezone Metals Ltd 4.13 4.27 3.95 4.05 119.7K -0.74%
ZURA Zura Bio Ltd 4.10 4.10 3.90 4.01 303.6K -0.74%
MTR Mesa Royalty Trust 4.72 4.74 4.72 4.73 1.3K -0.84%
ACHV Achieve Life Sciences Inc 4.73 4.86 4.61 4.65 489.1K -0.85%
#1 Stock Chart Pattern
Top 10 Penny Stocks
PTLO Portillos Inc 4.73 4.83 4.69 4.69 1.67M -0.85%
ALDX Aldeyra Therapeu 4.58 4.91 4.51 4.55 1.08M -0.87%
BIRD Allbirds Inc 4.58 4.76 4.52 4.55 164.6K -0.87%
PLTK Playtika Holding Corp 4.26 4.35 4.21 4.24 446.8K -0.93%
IMPP Imperial Petroleum Inc 4.26 4.49 4.08 4.22 1.56M -0.94%
SMHB Etracs 2X Small Cap HI Div ETN 4.21 4.21 4.11 4.15 10.7K -0.95%
AVAL Grupo Aval Acciones Y Valores S 4.16 4.16 4.09 4.12 33.1K -0.96%
MQ Marqeta Inc 5.01 5.01 4.87 4.94 2.67M -1.00%
NYXH Nyxoah SA 4.81 4.87 4.69 4.76 17.6K -1.04%
VATE Innovate Corp 4.55 4.73 4.16 4.49 48.9K -1.10%
REAX The Real Brokerage Inc. 4.28 4.50 4.20 4.22 2.15M -1.17%
HIX Western Asset High Income Fund II Inc 4.12 4.14 4.10 4.10 491.1K -1.20%
LIXT Lixte Biotechnology Holdings Inc 4.12 4.17 4.01 4.11 43.1K -1.20%
NCMI National CineMedia, Inc 4.15 4.17 4.05 4.10 288.7K -1.20%
RSKD Riskified Ltd 5.00 5.02 4.91 4.93 279.8K -1.20%
ACXP Acurx Pharmaceuticals Inc 4.18 4.26 4.05 4.07 25K -1.21%
BGS B&G Foods, Inc 4.84 4.90 4.76 4.78 818.6K -1.24%
ECOR Electrocore Inc 4.83 4.89 4.75 4.76 19.9K -1.24%
APT Alpha Pro Tech, Ltd 4.57 4.61 4.49 4.59 9.5K -1.29%
OBIO Orchestra BioMed Holdings Inc 4.58 4.60 4.43 4.51 106.1K -1.31%
Top 10 Candlestick Chart Patterns
Today's Top 50 Stocks
BB Blackberry Ltd 4.34 4.42 4.20 4.29 5.36M -1.38%
CMCT Cim Commercial TR Cp 4.35 4.65 4.11 4.22 185.4K -1.40%
POCI Precision Optics Corp., Inc. 4.20 4.20 4.10 4.15 15.9K -1.43%
RMNI Rimini Street Inc 4.16 4.21 4.09 4.12 101.4K -1.44%
EVEX Eve Holding Inc 4.70 4.92 4.62 4.64 426.9K -1.49%
BTG B2Gold Corp 4.79 4.83 4.53 4.61 26.57M -1.50%
GNLX Genelux Corp 4.48 4.53 4.17 4.33 75.6K -1.59%
UA Under Armour, Inc 4.25 4.35 4.13 4.17 3.28M -1.65%
TROX Tronox Inc 4.80 4.89 4.65 4.66 2.59M -1.69%
ANNX Annexon Inc 5.00 5.34 4.92 4.96 4.64M -1.78%
MBRX Metabasis Therapeutics, Inc 5.16 5.25 4.75 4.91 164.9K -1.80%
BLZE Backblaze Inc 4.90 4.92 4.76 4.81 322.5K -1.84%
CHNR China Natural Resources Inc 4.06 4.20 4.01 4.10 2.6K -1.91%
ASTL Algoma Steel Group Inc 4.67 4.75 4.50 4.53 829.9K -1.95%
TVRD 4.53 4.57 4.38 4.40 53.2K -2.00%
CTKB Cytek BioSciences Inc 5.35 5.35 4.83 4.87 886.8K -2.01%
UAA Under Armour 4.40 4.55 4.30 4.33 6.49M -2.04%
LGHL Lion Group Holding Ltd ADR 4.55 4.79 4.20 4.26 247.5K -2.07%
CCIF Carlyle Credit Income Fund 4.86 4.89 4.67 4.70 237.5K -2.08%
TBI TrueBlue, Inc 5.06 5.09 4.90 4.93 58.7K -2.18%
AVXL Anavex Lf SC 4.13 4.17 3.19 4.02 4.43M -2.19%
UUU Universal Security Instruments, Inc 4.85 5.00 4.66 4.75 20.8K -2.26%
PYXS Pyxis Oncology Inc 4.30 4.58 4.25 4.31 270.2K -2.27%
OMCC Old Market Capital Corp 4.71 4.95 4.56 4.78 6K -2.45%
CMRC 4.44 4.45 4.27 4.33 675.7K -2.48%
HIND 4.90 4.90 4.62 4.67 15.2K -2.51%
IPWR Ideal Power Inc 4.30 4.47 4.21 4.21 40.8K -2.55%
OM Outset Medical Inc 4.28 4.40 4.16 4.19 172.4K -2.56%
ATAI ATA Inc 4.39 4.63 4.26 4.30 2.73M -2.71%
AVD American Vanguard Corp 4.43 4.47 4.29 4.31 139.4K -2.71%
GGT Gabelli Global Multimedia Trust Inc 4.17 4.28 4.17 4.20 225.1K -2.78%
LCUT Lifetime Brands, Inc 4.24 4.38 4.03 4.09 20.3K -2.85%
KOSS Koss Corporation 4.70 4.72 4.58 4.58 13K -2.97%
LPL LG Display Co Ltd 4.42 4.42 4.21 4.22 267.2K -2.99%
GCV Gabelli Convertible & Income Securities 4.14 4.20 4.10 4.15 34.1K -3.04%
RIG Transocean LTD 4.31 4.37 4.13 4.15 26.23M -3.04%
EWCZ European Wax Center Inc 4.21 4.21 4.05 4.06 143.6K -3.10%
RLMD Relmada Therapeutics Inc 4.20 4.59 4.01 4.06 1.41M -3.10%
CSAN Cosan S.A 4.87 4.90 4.62 4.66 1.11M -3.12%
IZEA Izea Inc 5.04 5.04 4.87 4.88 45.2K -3.17%
AUNA Auna S.A. 4.67 4.75 4.56 4.56 125.4K -3.18%
KRKR 36Kr Holdings Inc ADR 4.80 4.80 4.25 4.25 658 -3.19%
APPS Digital Turbine 4.95 5.01 4.76 4.79 1.28M -3.23%
OMSE 4.61 4.75 4.45 4.46 7.2K -3.25%
RADX 4.07 4.24 4.07 4.14 441 -3.27%
TMQ Trilogy Metals Inc 4.85 4.86 4.58 4.66 2.92M -3.32%
MOLN Molecular Partners AG 4.33 4.33 4.33 4.33 238 -3.35%
AMPY Amplify Energy Corp 4.87 5.10 4.83 4.86 480.2K -3.38%
GSM Globe Specialty Metals, Inc. 4.77 4.77 4.55 4.56 535K -3.39%
GFR Greenfire Resources Ltd. 4.61 4.68 4.47 4.48 106.5K -3.45%
EMPD 4.81 4.97 4.64 4.65 530.2K -3.53%
SB Safe Bulkers, Inc 5.09 5.21 4.90 4.90 284.8K -3.73%
CURI Curiositystream Inc 4.87 4.88 4.56 4.63 694.5K -3.74%
BGLC BioNexus Gene Lab Corp 4.10 4.24 4.10 4.10 22.8K -3.76%
STEX 4.50 4.64 4.26 4.32 349.7K -3.79%
CCM Concord Medical Services Holding Ltd. 4.12 4.29 4.12 4.29 276 -3.81%
QNCX Quince Therapeutics Inc 4.43 4.55 4.20 4.23 833.5K -3.86%
TKNO Alpha Teknova Inc 4.86 4.94 4.73 4.73 41.8K -3.86%
VTSI Virtra Systems Inc 4.85 4.94 4.68 4.68 34.3K -3.90%
PRME Prime Medicine Inc 4.30 4.40 4.09 4.10 1.78M -3.98%
TWG Top Wealth Group Holding Ltd. 4.67 4.84 4.41 4.46 114.4K -4.09%
ABAT Advanced Battery Technologies, Inc 4.22 4.30 4.00 4.09 4.04M -4.22%
RAYA Erayak Power Solution Group Inc 4.89 4.90 3.93 4.54 22.9K -4.22%
INDI Indie Semiconductor Inc 4.50 4.51 4.24 4.29 1.48M -4.24%
LCDL GraniteShares 2x Long LCID Daily ETF 4.91 5.18 4.67 4.70 213.2K -4.28%
SLI SL Industries, Inc 4.88 4.88 4.45 4.61 1.72M -4.36%
AVR 5.25 5.29 4.90 4.99 108K -4.77%
KSCP Knightscope Inc 5.09 5.30 4.76 4.76 537.1K -4.80%
LWLG Lightwave Logic Inc 4.36 4.49 4.10 4.14 492.2K -4.83%
BOSC B 4.49 4.51 4.17 4.27 106.6K -5.11%
AUR Aurora Innovation Inc 4.61 4.65 4.36 4.37 8.29M -5.21%
CALC California Coastal Communities, Inc 4.52 4.59 4.26 4.37 32K -5.21%
ATLX Atlas Lithium Corporation 4.60 4.64 4.20 4.25 470.5K -5.35%
SLDP Solid Power Inc 5.21 5.24 4.88 4.92 4.29M -5.38%
RXRX Recursion Pharmaceuticals Inc 4.59 4.64 4.31 4.32 15.8M -5.68%
GLBZ Glen Burnie Bancorp 3.88 4.28 3.76 4.10 45.3K -5.75%
OCCI Ofs Credit Company Inc 4.72 4.72 4.56 4.57 451.9K -5.77%
DOMH Dominari Holdings Inc 4.83 4.96 4.45 4.47 360.7K -6.09%
IHRT Iheartmedia Inc 5.23 5.23 4.49 4.76 1.5M -6.85%
ACDC ProFrac Holding Corp 4.49 4.54 4.12 4.17 537K -6.92%
HPK Highpeak Energy Inc 5.30 5.34 4.87 4.91 525.9K -7.01%
PDYN Palladyne AI Corp. 5.34 5.38 4.83 4.86 1.29M -7.07%
AHT Ashford Hospitality Trust, Inc 4.56 4.80 4.21 4.21 144.2K -7.88%
NRGV Energy Vault Holdings Inc 5.45 5.51 4.81 4.92 2.52M -9.23%
LAES SEALSQ Corp 4.68 4.72 4.17 4.24 10.38M -10.17%
CLLS Cellectis S.A. ADR 5.11 5.11 4.59 4.68 142.6K -10.34%
SSP The E 4.88 4.89 4.34 4.39 566.9K -10.41%
QCLS 5.20 5.35 4.70 4.77 1.75M -10.84%
CNCK 4.65 4.75 4.11 4.13 43.5K -11.18%
CCUP 5.64 5.99 4.82 4.98 1.14M -11.70%
BULG 5.20 5.48 4.59 4.59 395.9K -11.90%
CRCA 5.27 5.58 4.49 4.65 9.76M -11.93%
RR Richtech Robotics Inc. 4.68 4.78 4.06 4.12 40.51M -11.97%
FIGG 5.01 5.01 4.30 4.31 338K -13.63%
IRBT iRobot Corporation 4.98 5.68 4.17 4.31 33.38M -13.80%
FOXX Foxx Development Holdings Inc 6.17 6.17 4.75 4.75 34.4K -18.10%
BDRX Biodexa Pharmaceuticals Plc 6.16 6.36 4.73 4.81 384.3K -23.65%

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



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