It’s been a while since SteadyTrade’s last listener mailbag episode. But the questions are piling up … So today, the entire team is ready to dive in and start answering.
In this episode, co-hosts Tim Bohen, Kim Ann Curtin, and Stephen Johnson talk about some of the hottest topics traders want to know about right now. Learn everything you ever wanted to know and more about reverse splits, SEC filings, and multi-month breakouts!
How’s the SteadyTrade Team Doing in Lockdown?
At the time of this recording, much of the world is on lockdown due to the pandemic.
The co-hosts are living through very different rules and restrictions in their respective homes of Michigan, Hawaii, and Dubai.
Before digging into the meat of the episode, each host gives an update on how they’re doing. Learn how Stephen’s actively avoiding $500 fines in Dubai…
Listener Mailbag: SEC Filings
In several recent episodes, Stephen and Kim discussed vital day trading variables like float and volume, support and resistance, and more. Now, Kim wants to know about SEC filings … How much time should traders spend looking at them, and what should they look for, exactly?
Tim’s quick to say that every trader should have a good working knowledge of forms like the 8-K, 10-K, and 424(b)…
Don’t know these basics? Check out Episode 86 featuring trader Michael Goode — it can help get you up to speed.
This part might surprise you: neither Tim nor Stephen look at SEC filings that much these days! Low-priced and penny stocks are a lot different from large-cap stocks. You’re far more likely to find shady companies with an address in the middle of nowhere.
Nonetheless, smart traders can take information about sketchy companies and turn it into a trading advantage … That’s why you should tune in and learn how to consider things like warrants. And find out how penny stocks with poor financials can actually create short squeezes. Gotta love those short squeezes!
Reverse Splits
Did you know that Nasdaq-listed penny stocks need to maintain a certain price point to stay on the exchange? When prices fall, a lot of companies do what’s called a reverse split. That means they condense the number of shares to increase the per-share price.
For example, say that stock XYZ has a float of 10 million shares worth $1 each. With a 10:1 reverse split, the number of shares is reduced to 1 million. But each share now costs $10. And the company’s enterprise value hasn’t changed at all.
In this listener mailbag episode, you’ll learn why so many reverse splits die on the first day. Tim talks about why he stays away until at least day two or three of a reverse split so the stock can “prove itself.” And Stephen explains why reverse splits can be “too scary” for him.
Multi-Month Breakouts
Poetry in motion! Don’t miss Stephen’s perfect explanation of a multi-month breakout … It just about brings Tim — proud papa bear and trading mentor — to tears.
If a stock has multi-month breakouts, how should you approach it as a trader?
Both Tim and Stephen offer invaluable tips for what to look for in multi-month breakouts and how to trade them. Market cap, volume, resistance, and the right catalyst — all these factors matter.
Wanna Know More?
Did this listener mailbag episode bring up any pressing questions? Ask us anything!
Remember: if we choose your question as an on-air topic, you could win a SteadyTrade mystery gift box. Leave a comment below or on YouTube!
Thanks for tuning in to the SteadyTrade podcast. Stay tuned for weekly episodes featuring the hottest topics for aspiring traders.
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