The Double Catalyst Rule - How to make Profits 95% of the Time

Trade Penny Stocks Introduction to Trading Penny Stocks
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Transcript

Hello, my fellow traders. In this video, I'm going to go over what I call the double catalyst rule. And I use the double catalyst rule for pretty much, no 90 or more percent of my trades, I found it to be the safest way to make money. It's the most conservative approach, but it allows me to not have to worry about money, you know, trading. So you have thousands 10s of thousands some people I don't trade with this, but some people trade with hundreds of thousands of dollars on the line. So you know, it gets very, it gets very emotional and, and stressful.

If you ever see your position go in the negative and you're losing money, you know, so it's tough for that. So that's why I don't exactly like trading, things like that. And so I follow the double catalyst rule, and with the double catalyst rule, again, a large amount of the times by three out of four trades or More. I'm always just in the green, I'm always just making money, the stock prices are higher. And I'm, again I go long, you know, if you want to go short, you know, look at Timothy Sykes, I guess, or Tim Brittani, but I belong to bull market, it's the best time to go long now. And I just saw I just like seeing, you know, my profits and and then all that changes for me and the only valuable for me is how much money I make.

And I watched the level two so that I can usually call the peak. So and then you know, sell before the stock, you know, starts falling back down or hits its peak and starts going down. So let me explain double catalyst real metal catalyst is something that significantly affects the stock. Usually it has to do with news. Okay, so it has to do with news but one catalyst is a breakout. Again if you don't know to break out of it.

You have to watch my basic technical analysis video, I'll go over it in that. But a breakout is a form of a catalyst, a catalyst, anything that's going to cause the stock to move. So for example, if a penny stock goes into a contract with Apple, that's an, that's a contract catalyst, the stock is probably gonna move probably upwards. And then if the SEC halted, that's a catalyst, the stock is gonna move downwards. So a catalyst is something that you should expect, or stock traders know is going to affect the stock in a certain way, and it brings attention to the stock. So the reason I follow a double or more callous rule is because sometimes one catalyst is not enough.

If a penny stock gets a contract with a huge company, you know, the stock price might go up. Sometimes it doesn't, you know, you have to follow the price action, you have to see whether or not the stock even moves. But But sometimes the issue with just following a single catalyst like a great earnings is that sometimes It won't necessarily be as predictable as possible, I've found that I've only had about a 50 60% chance of profits. And then you know, it's very choppy. It's not with the double catalyst rule. The reason I like it is because as soon as the breakout happens or the catalyst occurs, the double catalyst occurs, the price shoots up, and it goes, it becomes very volatile becomes very liquid, in a good way, the stock is always going higher and higher.

So in a single catalyst, where it's only one piece of good news, it's just too slow for me, you know, literally, I only hold my position four minutes at a time, you know, my longest holds or sometimes like an hour. I don't hold for a long time. I'm a fast trader. And that's worked for me. I feel like if you follow my double catalysts will work for you. So again, we went over the definition of a catalyst.

Now a double catalyst is what you need to look for. So one example of that would be a breakout Combined with good earnings report, if you get that combination, if you see in the morning, you know, nine o'clock, the stock comes out with good earnings report, you know, high revenues, no losses, good future talk about, you know, good quarter. And then you see that the stock breaks its technical breakout point and it breaks a high, almost a new high. There you have your double catalyst. As soon as that happens, that's when you buy the stock. And let me give you a perfect example of that right here.

So you can see, let's go lower, maybe we can see a closer example of this. So for example, right here, if you watch this chart, right, if you're doing technical analysis on this chart, you can see here and here this was look like a top. So if you're looking at the chart, you would see okay, if it breaks this high, then that's going to be a technical breakout. Right? These are the peaks. What is it 2.83 it looks like two 23 2.82 All right, but look at look at what happened here.

It broke 2.82 it went up to 2.9. But it wasn't a run up. You know, I like runners, I like making large amounts of profit, you know, 50 cents a share 75 cents a share. So because this didn't have any news, the yellow dots are the news. Right? This didn't have any news so it only had a single catalyst the single catalyst was the fact that it broke a high or broke a technical analysis high on a on a five day chart or something like that.

So again, then you get a what was what I think Timothy Sykes maybe made this term up but it's called a fake out you know, it only went up a few cents little is stopped that to 88 to 90 you know you and then you don't make that you still make money but you know, then it dips again, you know, it's not very safe. You could I you know, it's you would sell but you wouldn't make much money out of this. So it's still good, but it's too I don't like that type of thing. I like double catalysts. And that's what happened right here. Right here, you have good news, you got a conference called news.

And if you read the article, it's good news. So the yellow.is News, and then you had your perfect tech, then you had another breakout right here. And that's when it shot up. And that is the double catalyst and play and went from 280 to about 320. And that that's what you want 40 cents on the share. It looks like that happen in a matter of.

I'm gonna look at the time 64 in a few hours, I guess. And that's all you need. So that is an example of the double catalyst rule and why I follow it.

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