Meme actions are about all opportunities. If you play them well, you can earn a huge amount of money in a short period. Play them badly; However, then you are left with a great loss. Most of the time when you hear about a meme you get the impression that it is highly risky. While this might be the case, with the right strategy you can trade meme stocks the right way with this low-risk strategy we’ve created! It’s about coming in at the right time and exiting with sharp laser precision.
After some testing, we formulated the best trading meme title that showed the most consistent results.
Before we get into anything, we need to clear things up.
Table of Contents:
What are meme actions?
Meme stocks typically skyrocket in price due to interest circulating across the web. They went viral! Most of the time it will come from a popular social media site like Reddit, YouTube or Twitter. We saw this happen in January 2021 with GameStop (GME) and many other popular titles like AMC and Blackberry that have risen.
This type of trading also attracts younger investors who believe that the stock will continue to rise over time. They also refer to owning their shares as “diamond hands,” meaning they will never sell, regardless of price.
You can’t talk about stock memes without talking about one of the first to popularize them. On his YouTube channel, Keith Gill, also known as Roaring Kitty, made a massive bet on GME when the price was low and ended up cashing in on what some claim was nearly $20 million.
List of meme actions today
Due to the rapid increase in interest in meme actions, there are plenty of places to find a list of meme actions. One great source we found is swaggystocks.com
This site allows you to see what is currently “trending” and the overall sentiment of that particular stock. So, if you’re looking for the best meme actions right now, it would be a great source to refer to. Find the most popular meme stocks today will help you target the best meme stocks for our meme stock bounce strategy.
ETF stock memes
Is there a Meme stock ETF? Yes. The update pane is ($BUZZ)
What Is $BUZZ ETF? This was launched in March 2021 and attempts to monitor public sentiment on blog posts and online media using artificial intelligence. It’s actually very interesting and something to keep an eye on to see how meme actions are going over time.
5 of the Best Meme Actions
As stated above, we like to track current meme actions with tools we’ve linked, but what are some of the “best” stocks of memes?
The top 5 stocks of memes are: AMC, GME, CLF, SPCE and BB. All of these titles have seen their fair share of massive growth in a short period of time, which is why we consider these to be the top 5 meme titles.
Stock Memes Controversy
There is a lot of controversy with meme actions. There have been some sad stories circulating on the web that show people losing everything in hopes of hitting a huge payday with the stock of memes they invested in. You’ll also hear the term “short-squeeze” thrown around. Without going too far if you want to learn what a short compression is, this is a great resource to refer to. It’s basically a heavily short stock going up, and short sellers may have to buy at a higher price to limit their losses.
Are meme stocks a good investment?
Most traditional investors stay away from trading stock memes. But when an opportunity presents itself, don’t be afraid to follow it. With the right strategy and mindset you will be able to profit from trading meme stocks the right way.
How to Profit from Trading Meme Stocks
This is the big question that many of you would like to know! How can you do it at the right time to get in and make a profit on these meme titles? Read on why we’ve developed a low-risk strategy for effective meme stock trading that we’ve called a stock bounce strategy meme!
Many believe that only a fool would trade these stocks. The traditional “stock meme” investor would buy the hype and keep it hoping that the price would rise quickly.
For our example today, we’ll use AMC.
AMC is considered one of the most popular memes.
So this would be a good reference title to use for new meme titles coming soon.
Let’s get right into the strategy!
Stock Memes Strategy Step #1: Find the Stock of Memes
It’s pretty obvious, but you need to find the right stock of memes. Find one that has already made a huge run. If the stock of memes you’re looking at is still reaching all-time highs, this isn’t one you should look out for this strategy. This strategy we will try to enter at a much lower price when all the “hype” is gone. This is why we are using AMC as an example. Many of the top five meme titles we mention above would also be fine.
As we said, AMC will be on our radar for this strategy. AMC has already made a massive move upwards, which is exactly what we want to see.
When you’re looking for a meme stock, it must have had a massive move because this is critical for our next step.
Step #2: Wait for a pull-back at a key level
This step may take some time, but it’s important to get it right. You could wait days or weeks, but find a level you like and wait for the price to reach this.
With this strategy, we are not interested in hype. Instead, we are interested after all the hype and that the stock returns to a reasonable price.
Buying the stock
when it recently just rose 50-100% is very dangerous and could leave you holding the stock long-term with a huge loss.
Depending on the broker you use, you can simply set an alert at a price you’re looking at.
Let’s use Webull, in this example. Webull is a great trading platform that can trade any meme stock that’s out there right now. If you are interested in getting installed on Webull, feel free to click on the image below and get the installation today! They have pricing warning features, so it would have been perfect to use for this particular task.
With AMC, we had our alert set to this previous high.
The price has come back down and rebounded to this level, so this is a great price to watch for an entry.
Step #3: Take the trade when it reaches your level and bounces
Once the price
reaches your level, now is the time to take the trade if it respects this price.
In this case, AMC rebounded strongly and quickly moved higher.
For our entry here, make a trade on the level bounce. We advise you not to take the trade on the exact day it reaches the level. Give it a day or two to see if it stays at this price or break it and go down. For our entrance, we would arrive the next day. We have drawn an arrow where we recommend entering.
Keep in mind that we are looking at the daily chart. It is recommended to use the daily chart to find these previous levels.
Stock Bounce Strategy Meme Step #4: Stop Loss and Take Profit
We recommend placing your stop loss 10% lower than your entry price.
This gives him room to move. However, if it falls below 10%, it will most likely end up continuing its downward movement, so you don’t want to keep it.
You can set your take profit to +20% from your membership for a 2:1 risk/reward ratio.
This strategy aims to quickly get in and out of this stock of memes with a nice gain.
Once you catch a quick 20% gain, you’re not done with that trade.
If the price returns to the level and rebounds again, take one more trade and continue to do so as long as it keeps bouring.
So for the next entry this is where it would be and at the time of writing this article we would still be in this trade.
Do not take another trade until the Take profit or stop loss has hit on any trade.
So, in the above case, we will now hold this trade until one of the criteria is met.
It makes it simple since you’ll only be in one trade at a time.
This has formed a nice double fund here and if you want to know more about the importance of double funds we have a great strategy here in this article.
The more it respects this level, the stronger this level of support becomes. Support levels are very important in trading and can make a big difference when you learn to spot them consistently.
Below is a good example of what support and resistance would look like on a chart.
Keep trading the rebound of this support level as long as it keeps bouncing back. You can anywhere from 1 to 4 big entries.
Obviously, trade #3 and #4 are speculative here, but as long as it keeps bouncing back you’ll keep trading it! Just remember that you only have 1 trade at a time.
In addition, risk is very important. Please refer to our risk management post if you want to see the best way to manage risk.
The reason we love trading memes this way is because we find that this has much less risk than trading when they go up exponentially. When they do, if you were to have a stop loss, you would most likely be eliminated quickly due to the stock’s volatility. Since we wait until all the “hype” is gone, it can lead to a lot of profitable gains as traders will always look at these meme headlines, especially when they reach huge support levels.
If you liked this strategy, you’ll love our alerts that will occasionally have a stock of memes from time to time.
It is called calm cash alerts that is available on Google Play and Apple App Store. You can learn more about the app here!
We developed this trade alert app for traders like you! We use our unique trading strategy to find excellent entries and publish our trades at 3 PM EST Monday through Friday.
Conclusion
This stock meme bounce strategy is a great way to capture quick profits with small risks. We’ve shown you how to find US meme stocks and how we recommend trading them. AMC stock is a great example of a stock meme. This is one that we will continue to negotiate with this strategy as long as it continues to rise and fall back to key levels. Now is your chance to try this stock meme strategy! Trading meme stocks can be exciting, and by following the rules of this meme stock bounce strategy, we think you can make good gains with little risk.
