Episode 75: High on Weed Stocks

Do you feel the need … the need for weed stocks?

Cannabis stocks are undoubtedly the hottest sector in the market these days. In today’s episode, hosts Tim Bohen and Stephen Johnson share the best ways for traders to get in on the action.

But that’s not all that the show has in store. You’ll also get the latest update on the SteadyTrade Paper Trading Challenge, and learn some incredible trading psychology tips and tricks. Get ready for an action-packed episode!

SteadyTrade Paper Trading Challenge Update

Kicking off in November, this Challenge began with two teams of three contestants. Each contestant was given $30K trading equity (over PDT!)  in their paper trading accounts.

There was some gaming of the system, scalping in and out, and one contestant literally made millions due to a system glitch.

Now that phase one of the Challenge is complete, it’s time to see who got margin called, and who has to leave the island …

… Hey, can you help us think of a catchphrase for when contestants are eliminated?

… Otherwise, Tim and Stephen might resort to “You’ve been pumped and dumped from this competition”… and, well, ew.

The Time Is High for Weed Stocks

As most traders are aware, the weed/cannabis sector is super hot now. It’s had some ups and downs since 2014, but the momentum is now very strong.

Why? Because with recreational marijuana being legalized in more and more U.S. states, pot stocks are coming into the real world. They’re not just listed on pink sheets; they’re actually being listed on major exchanges.  

With companies like Coca-Cola talking to cannabis producers, there are catalysts a-plenty in this sector that are creating many opportunities for traders.

In the episode, Tim and Stephen cover many topics related to weed stocks, including:

  • Trends. One of the nice things about the weed stock sector is that the stocks tend to move together.

The guys discuss why this matters, how even a catalyst specific to one company can create moves within the entire sector, and how to use this phenomenon to your trading advantage.

  • When to buy. With some weed stocks hitting 52-week highs, it can be hard to know when is the right time to enter a trade. You’ll gain plenty of tips for when traders are taking positions and why.
  • How long to hold a position. Weed stocks are unique in that they provide opportunities for both day traders and swing traders.

Tim and Stephen dish out some tips for why both approaches have pros and cons, and offer food for thought so you can consider how long you want to hold.

  • Don’t be fooled by randomness. Just because weed stocks are hot doesn’t mean that you can pick any of them and make oodles of cash.

Fundamental and technical analysis remains very important with weed stocks, and it’s worth taking the time to really evaluate whether or not the stock you’re considering makes for a worthwhile trade.

  • You still need a plan. You still need to carefully consider your trade and to create a detailed trading plan with pre-determined entry and exit points. You still need a stop loss. Things still can go wrong with weed stocks, so you need to be prepared!

Trading Psychology Tips

Successful trading is as much about what you don’t do as what you do. For example … do you have the discipline to wait for the right criteria for a trade for 3 weeks?

No doubt about it: Trading psychology is super important to your success (or lack thereof) as a trader.

Tim and Stephen share their own experiences. You’ll learn about Tim’s rage issues, Stephen’s most sensitive feelings, and how both of them have felt vulnerable at times in their trading careers. Awwww … group hug.

Traders at every level and with every size account will benefit from the valuable tips on attaining and maintaining the right attitude for trading.

Got Something to Say?

Do you have opinions, questions, or comments on the episode? Visit the “submit your audio” portion of the website to put in your two cents.

Thanks for tuning in to the SteadyTrade Podcast. Stay tuned for weekly episodes featuring the hottest topics for traders of all levels.

Did you love this episode? Be sure to leave an iTunes review!