Joseph learned from Brian Lee’s ‘freezing’ method for capping risk at different account levels. He advocates for implementing the R system in trading, which helps traders know precisely how much they’re risking per trade.
His approach centers on short-selling penny stocks, particularly those with low float, which he identifies through technical analysis. He looks for stocks that have moved up significantly in pre-market or intraday, waiting for signs of supply coming in. His key technical indicators include: MACD, VWAP and support and resistance levels.
Tip 1
Going long on penny stocks
Everyone's trying to short. The sentiment cycle greatly influences volatility. I look at supply and demand; it's either going to fade or spike, then fade. I use technical analysis and look for factors in my favor. If the stock holds key levels with volume and sentiment but no recent big gainers, it may have potential for a big move.
Tip 2
B tier entries and A-tier trades
B tier entries for penny stocks occur later in the day, seeking bounces; A tier trades short into supply and scale into position. Once that's worked, you look for an add at VWAP or a previous support level as resistance. For me, those are B tier entries—the risk to reward isn't great, but the chances of working are high.
