It has been an insane year for stocks across the board. Tech stocks have been on a rampage. IPO stocks have been exploding. SPY, QQQ goes up almost every day.
Learn how to trade IPO stocks. These are some of the best stocks to day trade and swing trade. If you can use the right strategies and risk management, you can capitalize on their momentum.
If you are unfamiliar with IPOs, watch our latest video lesson. I detail some of the best IPO names to watch right now, how to trade them, and how to find these type of stocks yourself in the future:
What are IPO Stocks?
When we talk about IPO stocks, we are referring to companies that have recently started trading publicly. This is the process of a private company offering shares to the public in a new stock issuance. This allows the company to raise capital from public investors.
Why Trade IPOs?
Our style of trading here at Bulls on Wall Street is momentum trading. We are looking for stocks that have large range and liquidity to make large returns in a short term of time.
What makes these names great to trade: They have very little price history. Clean daily charts. This means there are few levels of supply to stop an IPO stock from increasing in value after it breaks out. Once these stocks breakout over key resistance levels, usually it’s IPO high, an uptrend for days to weeks will often follow.
We look for IPO stocks with strong uptrends, and then we use our repertoire of day trading and swing trading strategies to capitalize on this momentum.
Day Trading vs Swing Trading IPOs
Paul Swing, one of the mentors here at Bulls on Wall Street, likes to swing trade to capitalize on this momentum. This means he is looking to enter stocks, hold them for a few days to a few weeks, and then sell for a gain.
I prefer to day trade these stocks. This means I am holding these names for a few minutes to a few hours to capitalize. I don’t hold these names overnight. Nail and bail is my motto.
No strategy is better than the other. Whether you choose one or the other is based on your personality and time commitment you want to put into trading stocks. Some people are natural day traders. Some are natural swing traders. If you want to know which style of trading you should choose, check out this article.
Some of the recent IPOs we talked about in the video lesson above: $API $CRNC $NNOX $FVRR $SHLL. All these names fall into the category. All great vehicles for day trading and swing trading. Make sure to watch the video lesson above for my analysis on these names, and how to capitalize on their momentum.
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