In this video, we are going to be talking about the top three stocks for this week in mid-february 2020. But how and why do I pick these particular stocks? Well, we use a sly combination. a sly combination of overreactions to news, upcoming catalysts, and of course previous patterns. For an example, let's take a look at last week's picks see: GNX got beat down like a rabid dog to overreaction lows at 29 41 and then since every reaction is of course a dirty overreaction.

Had several wonderful days of beautiful price action to trade off of, allowing us to buy it at multiple conformation and sell out at multiple validations. Likewise, our other pick a Grx, which was due for an FDA approval this week before getting approved on Friday Well, it was quite strong with a pre anticipatory run from 392 to 477. had an overreaction opportunity and correction and then running up upon after-hours close on Friday Several really great opportunities. Now again, at Zip Trader were not wizards.

This isn't Wizard Trader, it's Zip Trader. And that means that we don't know ahead of the time exactly how things are going to play out, but we can go and look at high probability setups and figure out what is going to convince us to take a position. And that's what these opportunities are. Even if we had a crystal ball where I could look into it and it says o Zg + Ex is going to go up if you don't know exactly one to take your entry point, you're not going to be able to play the uptrend.

So that simply means that the best way to trade these is by waiting for a confirmation of price ranked, waiting for your elevating factors. But most importantly, you need to trade like a spoiled brat. If the chart isn't convincing you to take a position, you need to sit in your chair, close your eyes and scream I Won't Trade That If you think that feels ridiculous. Imagine how ridiculous you would feel if you completely blew up your account because you decided that you didn't want to trade like a spoiled brat.

Okay, but with all of that being said, the only thing that I asked in return for this video is that you hit that ravishing like button. And if you'd like more short, sweet and simplified videos on how to trade the stock market, make sure to subscribe as well. For those of you who are looking for extra guidance in growing your account, we do offer Zip Trader You and It. We walk you through each and every step and connect all of the dots that we feel that you need to know in order to be a profitable trader.

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So I Hate I hate that I have to put this first because of their recent sporadic movements which indicate that this is probably going to be a more challenging play. As if FDA approval plays weren't challenging enough. But nonetheless, AG Rx just received their FDA approval for at Werlla and likewise I and many other traders were twirling with After Hours Joy! We have had some post market running up as a reaction and this was a tick from our top Penny Stocks video from a couple weeks ago and of course a pic from our top Stocks video from last week. But just to recap, Tor Light is their first improved product and it's a product that has long been anticipated.

The approval itself was originally scheduled for November and it ran up massively in pre anticipation. Back then we covered it and then it got beat down after they announced it would be delayed until February. But AG Rx nonetheless had several months of running up and pre anticipation. It had several months for people to factor in what an approval would mean and unfortunately, factoring something.

and that's both a pro and a con in the sense that we pre factor in a price and that means when the good news comes out. If everybody are it expected it, then we don't have as much upward potential, if any upward potential, It's easy for investors to pre factor in good news, and then when it comes to news actually coming out to stall crashes as investors take their profits. but there's no way to say for certain whether or not this is the case because again, we haven't had a full reaction. we just had the announcement after hours and this really goes to underline my case for not holding through announcements a lot of people love do Plan FDA approval announcement because they know that 80% of the time drugs tend to get approved.

but the thing is that there's still that 20% of the time where they don't get approved and there's still that large the time where they get approved. but they still get beaten down because of the fact that people already pre factored in the share price. But nonetheless, it doesn't really matter if it goes up or down because we can play off the subsequent reaction and we will be watching this week for a heightened volume and for heightened opportunities that this catalyst is likely to bring when you have attention. going to such a small cap company like this that creates a ton of fluctuation and a ton of opportunities for us as traitors.

But of course, what? I Do like to emphasize with these types of plays is getting in at an upward direction. With something like this, it's easy to sell off unless you want to make sure that you're at least in me right lane. When we're above the red directional A some a line, we are in an upward direction and when we are below it, we are in a downward direction. This just simply allows you to get in any better entry point because you have another elevating factor: Something that's in an upward direction is more likely to continue going in an upward direction versus something that's just tanked downwards.

But in terms of institutional Holdings Institution after institution has acquired chairs. and if you go and look at the dates on the left, most of these happened in the first few weeks leading up to the announcement. What does this mean? It means that institutions were snapping up shares right before the announcement. Hmm.

We love this because unlike monkey analysts that just give you price targets these funds, they're actually putting their money where their mouth is. They're not just paid to give you irrelevant opinions. In fact, they don't care what your opinion is. And at the end of the day, it shows us where sentiment is for a Gr X and sentiment is pushing bullish.

That doesn't mean that it's going to continue heading in a bullish direction, but it's an elevating factor. With that being said, one of the things That I will emphasize and I will take this moment to emphasize is the fact that you need to make sure that you understand what an exit point is. Read my lips. Stop screwing yourself over by holding and hoping.

Someone literally just messaged me a couple days ago about holding ITC I Now for those of you who don't remember: ITC I This was one of our best picks that ran up massively. However, since every reaction is an overreaction, this FDA approval play After it ran up, it started selling off, why would you hold something like this through validation? The only reason is because of either indecision or pure laziness. If the price action gives you a reason to exit, you better be damn sure that you're exiting. Okay next.

CarGurus Now see. Arg got beat down like Jack with a jackhammer and that's great because we love top losers. We especially love top losers that oversell past previous support. But why why Charlie Do we like that? Well, because we know that every reaction is an overreaction.

That means that if we can playoff over reaction lows, we can find an entry point upon price strength and ride any correction upward. We love riding price strength upward because that helps us realize upward potential. And boy, is there some upward potential. But we also cannot be stupid enough to let ourselves assume that just because something's been beaten down, that it all of a sudden is due to correct.

In fact, what is to stop it from continuing to sell-off Wait for the price action to prove to you that it's going to reverse wait for a confirmation of price strength. Just like you wouldn't buy a sick dog on the side of the street without signs of a recovery, you shouldn't buy a sick stock when it's been beaten down. How do you know that the overreaction is done? If you assume that every reaction is an overreaction. How do you know that we're not still in an overreaction? You don't? You don't know, folks.

So make sure that the price action proves to you that we are in an overreaction by having price pranks by showing it going from oversold to increasing. But Charlie Why would I want to buy a stock that's been discounted instead of one that just got more expensive? If we buy something that's been discounted, it's a lot easier to simply buy in an overreaction lows and then just ride the upward potential. Hey, Charlie you're pathetic. Why don't you use Fibonacci or Divine Numbers to Garrett you the top of the stock pick.

Everybody has their own strategy and it's fine to pick what resonates with you the most. but when it comes to zip trader, I have a huge focus on buying in when something is a good deal. Okay next. Finco FN Kayo gets beat down massively to overreaction lows.

at 8:29 notice, the overreaction takes us to oversold and then goes from oversold to overbought. but Finco has a history of overreacting back in. November we got beat down on earnings, oversold and then we ran up until we were once again and overbought. But yes, in the past we did have more volatile Corrections where we got beat down, then corrected a lot quicker.

but that's fine and Finco does have slower Corrections and that means it's a little bit better for a longer time chart. So the question that we face at this point isn't whether Finco has the potential to repeat the pattern of overreactions and correcting. That's because it clearly does and it's already shown us some of the correction and it has clearly made some ground on that since overreaction lows. But the real question is after this clean initial correction, will we continue to see price strength to trade off of? my suggestion with this is that since we do have the science of a slow correction, you should be targeting a broader aggregation period.

A lot of people don't focus on the aggregation period, but it's very important. you need to focus on one that allows for more drawn-out movements. This is a slower reaction, so you need one. It has a slower aggregation period, one that's a little less aggressive as you know every stock moves differently and your choice of aggregation period be that one day or one minute is going to have a huge impact on your entry and exit.

For example, let's just go and check the messy 5-minute aggregation period. Look how messy this is. Now check the for our if we are planning on getting in at the first confirmation aka the first green candlestick above our house, the male line then which time is better. We want to trade a clean run up though, which is a cleaner opportunity the four hour or the five minutes.

Obviously the four hours this cleans it up very nicely. In the five minutes it's quite dirty and we don't like dirty price action, but the reason that one's clean and ones dirty has everything to do with the speed of the move. If this happened to be a really fast move then we could have been a lot more aggressive and maybe the five minute would have worked. Maybe the one minute would have worked, but this isn't an aggressive move.

It's been quite slow so so far. We're in this period where the for our aggregation period makes the most sense, but that is just a quick overview of how to accurately choose a aggregation period. If you'd like to learn more about that, you can check out my swing entry point video where it talks about how to tell the difference between aggregation periods. But I'm not going to go into more of that in this video.

But anyways, just to end this video, I Do want to take a moment to remind you that stock picks? There are just opportunities. Think of stock picks as you would a job interview I point out potential jobs that you can make money with and then you can go and interview if you screw up the interview that's on you. However, if I give you a job interview that's not a good fit and it doesn't actually have an opportunity, then that's on me. But the key component is that doing your own due diligence will help you analyze and figure out whether or not my opportunities are even worth it to you and help you simply avoid ones that don't pan out.

So make sure that you're doing your own due diligence, make sure that you're practicing, and make sure that you test everything using a paper trading or simulated trading platform. Again, Thinkorswim has this thing called on-demand where you can go and you can back test certain strategies to see whether or not they work and to practice your skill set. So if that's something that's of interest to you, you can go and do that. It just depends on your goals and your personality.

Anyways, folks, if you have any questions, feel free to reach out to us in the comment section below or join us at Zip Trader Circle on Facebook Link is also in the description. If you are having a hard time growing, your accountant would like some help. We do offer Zip Trader U which is of course our premium course. Lastly, if you're wondering what broker to trade these stocks on, we always like to send people over to Weeble and they are offering two free stocks for anybody who signs up and deposits in the amount using our link below.

so check them out if you haven't already. Anyways, folks have a great day and I'll see you in the next video.