Today, we're going to be talking about the number one most shocking thing to me when it comes to trading biotechs, hey everyone, lee training, with stats to trade tim bowen here before we get started, be sure to like share, subscribe and share with your friends, which would Also be sharing, like i told you to share three words ago and ring the bell to be notified as soon as we drop a new video all right. So today i'm going to talk about something that um is kind of a repeat from a steady trade team. Webinar from yesterday so um, if you're familiar with the steady trade team, if you're not click the link below check it out, i do a webinar in the morning and in the afternoon mornings we talk more like day trading. Now these aren't concrete, but you know, mornings were most mostly focused on those big morning movers for those quick day trades.

Then in the afternoon we kind of recap the day to see what worked, what didn't work, but then we also focus on overnight trades. Those swing trades or those gappers, as we call them because most people that are learning trading, i mean listen, you're, probably under the pdt, the pattern day trader, rule um. If you're, if you've got a margin, account and you've got less than 25 000 you're under the pdt, maybe you got a cash account which is awesome and actually check out the archive. We've got a bunch of videos talking about the pros and cons of both, but most people they're looking to day trade have a margin account, so they can go long and they can go short, so you're bound by the pdt.

And that means you all got those three round trips in a rolling five day period, which means you love the the gapper type stocks you're. Looking for those stocks that trade or close strong and then you can sell the gap the next day and you don't burn a day trade as we say that being said yesterday afternoon had a new member and they were asking, you know hey what do you think About vrpx as a potential overnight and listen - it was a great afternoon hold so we're looking at this area on the chart ground up higher all day was closing at or around the high. So you know we're doing this. Webinar 3.

45 p.m. The high of the day was eight, the stock's currently trading at it 750, which is basically a multi-month breakout, even almost hit a new 52-week high. So what i liked about the new member, they were looking at a stock that was in play, as we say, had some news yesterday, traded 50 million shares good intraday chart closing near the high of the day, but they asked hey. What do you think about? This? Is an overnight i'm like? No.

What are you talking about and they're like? Well, what do you mean? It checks all these boxes that we look for and i'm like it's a money losing bio tag, and this goes back to the headline of this video. One of the things about being around being an old guy with the gray hair and the bald spot 15 years later. You kind of forget that again, newer traders don't know these rules when it comes to money, losing bio tax. And the point is you never? Ever ever overnight, money losing biotechs, because - and let me show you how we know that i mean one of the great things about stocks to trade.

Is we can go to our key statistics? You can see that they have. You know basically terrible financials. You know zero revenue, zero revenue, which is not uncommon for biotechs they're, bleeding cash everywhere losing money constantly, so those stocks are never overnight. Now listen vrpx did squeeze in after hours, but if you held this overnight, you're getting freaking destroyed right now down 20 on no news.

This is just what money losing biotechs do. These are day trades only. These are quick in and outs they're. Never now i hate to use, never you know in trading avoid using never and always you know it's, but i mean listen 999 out of a thousand times these companies never accomplish anything, they constantly fail and they gap down and they back hold people.

And fortunately you know, i saved several people that were thinking about this as a as an overnight, because i'm like no no understand the reason biotechs are publicly traded is to raise cash. Okay, the and this isn't a bash. Ultimately, i mean it probably sounds like oh tim you're, one of these short seller commercials that loves to bash everything. No, that's not my point.

The business model of biotech is, they are a home run business model, you burn through millions and millions and millions of dollars to get that breakthrough drug that makes you billions, but for years and years and years you'll lose cash and lose money like crazy, because you Have to pay the bills, you have to pay taxes, you know you have to pay the rent. You have to pay, you know payroll, you know you have to mow the law. Okay, it takes money to do r d and keep a business operating, and if they were good companies, if they were quality companies, they could just call up chase or jp morgan or or wells fargo or citibank, and get a loan well. They can't because they're, speculative and they're bleeding cash, i mean listen if you, if you're losing money like crazy and you go to the bank you're like hey, i want to buy a 300 000 house they're gon na, laugh you out of there well, unless it was 2005 in 2005, they'd be like you hey.

You want to buy three houses, but anyway they, you know if you're lu, if you, if your cash flow, is negative, you can't get a loan. So what do biotechs? Do they go to the public markets because they know hope springs, eternal, there's an endless supply of bag holders and people that will believe the dream? Then you issue press releases like vprdx. Did you run the stock up and you sell more stock and you delute and you delute and you delute and because of the fact that hope springs eternal and people don't know this rule again? My point was back to that webinar yesterday, i'm just like uh people. Don't know this people believe in biotechs.

You know that that's part of being around for so long. You just assume everyone knows this. So that being said, vprx hasn't even done a dilution. Today, it's down 20.

The probably i mean, listen, i'm recording on july 15. 2021. Look at your news on vrpx they're, probably going to do a dilution tomorrow or the next day or next week, and the stock will be down another 30 or 40 percent and will probably return all the way where it came from at four bucks and six months. Hey, maybe you're, watching this video six months later and the stock's running.

Well, there's probably a press release, it's probably got momentum, it's probably got crazy volume and it was probably a great day trade, but then the true believers that don't know this rule the bag holders will hold overnight it'll gap down 20 percent they'll dilute it'll gap down To another 20 and they're, the ones that say day trading doesn't work the stock market's a scam, etc no stock market's, not a scam. If you know how to play the rules, you know i joked in that webinar, i'm like listen. If you don't have any idea, the rules of baseball you'll go out there and you'll think baseball's a scam. You know i'm supposed to hit a ball with a stick and i run to this base and if i catch the ball, it means one thing: if i drop the ball, it means another you'd be like it's all a scam.

But if you understand the rules of day trading, particularly day trading biotechs, you understand quick in and outs key levels, dip and rips v-wap holds weak, open red de greens and you never ever ever ever. There's one golden rule. If you know number one rule in trading is always you know, cut loss is quick, but man a close second. Is you never overnight or swing trade biotechs all right, everyone, if you're learning this stuff and listen? If you didn't know this one, i don't blame you.

I just it just shocked me, you know, as an old guy that people didn't know this check out the steady trade team. We get into everything all of these details that can maximize your success and, if i can save you, like, i saved a handful of steady trade team members from overnight and some piece of crap money losing biotech that gaps down 20 for every day for three days And goes all the way back to four, then that is getting you closer to that path of consistently profitable trading check out the steady trade team. I look forward to working with you soon.