Top 3 Blockchain Stocks to Trade Bitcoin Penny Stocks $RIOT $MARA $XNET


Most people know about the cryptocurrency
bubble that happened at the end of 2017, where
bitcoin ran from $3000 to almost $20,000 within
6 months. But did you know many day traders
also played the same hype with penny stocks?
Seeing that bitcoin is making a nice recovery
to 8000 now, I think this is the perfect time
to recap the crypto hype we had in some of
the penny stock runs. So if bitcoin does break
new highs in the next coming months, you will
be able to take advantage of the same hype
by day trading and swing trading these blockchain
stocks.
And also I will be sharing a personal and
terrifying story of me shorting one of these
hyped up penny stocks that led to a HUGE LOSS.
So you definitely don’t want to miss this.
Before we start make sure to drop me a like
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So let’s take a look at my personal favorite
crypto penny stock, $RIOT. Funny story, before
the whole bitcoin hype. This company was actually
a company developing veterinary products called
Bioptix. Supposedly they made a “pivot”
in their business strategy in in October 2017,
and shifted their focus on investing in blockchain
technologies, bitcoin and ethereum mining.
Hence the name change to Riot blockchain.
After the name change, we saw the share prices
hike from $8 to $45 in December. $RIOT stock
has a market cap of $42 million. It is a small
cap with 15 million shares float. So it’s
not a low float stock like $MARA, which we
will talk about in just a second. But $RIOT
is part of the whole blockchain sector, and
follows the Bitcoin price action. As you can
see on this daily chart.
RIOT has since then be declining in prices.
Selling off from $40 all the way down to about
$2.70s now. Just play the price action on
this one. I definitely would not invest in
this company, same thing as the other two
stocks that I’ll talk about in a little
bit. A tip for you, my valued subscribers.
Riot blockchain, has some dirt cheap options
contracts. You know what I’m saying?
The easiest way to play this stock back then
in the middle of the crypto bubble, is to
overnight some $RIOT stock when Bitcoin makes
a new high. I’m not saying to buy or sell
that stock right now. I’m just saying to
keep this stock on watch if the whole crypto
hype comes back again and if bitcoin prices
pass $10,000 and heads toward one million.
And just check the short interest on this
thing. 26% of the shares float is held short.
If bitcoin comes back again, this stock is
gonna run to the moon.
Let’s take a look at the daily chart for
$RIOT. Actually for these really beaten down
charts I like to look at the weekly trend
instead. That’s another tip for you. When
i chart these highly dilutive companies that’s
just been selling off. I use the weekly chart
to draw out the major levels. Same thing if
I am looking to swing trade for more than
a few days.
So $RIOT weekly chart is below this 50 ema.
To me it needs to be able to hold above the
50 ema and also the $4.50 resistance level
for me to lean in bullish . Aslo it’s above
the 50 ema that most of the people holding
the short position will look to cover. Remember
the stock is 26% short.
So these are the levels $RIOT has to break
above and hold in order to squeeze. Just look
at how much room this thing has to to the
upside. Wooo. The real short squeeze will
happen if the stock breaks and holds above
this $6.50’s level. Of course the stock’s
price action will follow the crypto price
action sentiment.
Let’s move to stock #2, another crypto penny
stock that runs with the crypto hype, is $MARA.
Marathon Patent group. Now just like our last
penny stock RIOT. Only a small part of $MARA
business is focused on crypto mining.
The whole reason $MARA stock was put under
this crypto space basket, was because they
have a small patent in cryptocurrency mining.
They are not heavily invested in blockchain
technology at all. That’s what all these penny
stock companies did. Change their name and
buy a crypto mining rig. Boom, blockchain
technology. I mean if I have one alt coin
mining rig under my bed, technically im invested
in blockchain technologies too right?
But what makes $MARA attractive to me to trade,
is that the stock has a low float of only
6 million shares. The float of the stock is
the amount of shares outstanding available
for the public market, therefore stocks with
a low float can be easily moved up or down
with momentum. I have a video on how to trade
low float stocks if you’re interested.
$Mara stock has a short interest of 10%. Not
as much as $RIOT stock. But it’s still noteworthy.
Remember, low float stocks added with a high
short interest is a receipt for a short squeeze
to the upside.
I know because i got short squeezed big time
by one of these crypto penny stocks. I’ll
tell you the story in just a second. Because
recapping a devastating loss is like, getting
a text from a bad ex. You just want to put
off reading it for as long as possible, but
deep down you know eventually you need to
face the reality. Urgh
Now let’s do some technical analysis on
$MARA. Again we are looking at the weekly
chart here. Another beaten down stock just
like $RIOT. Again it’s below the 50 ema.
It has to break and consolidate above it in
order to be bullish. Lots of room to run to
the upside for this one. Especially when it
has such a low float.
After 50 ema $MARA needs to break and hold
above this $5.50 area to run towards the $10’s
possibly. This one also needs to be traded
alongside the BTCUSD chart.
The next blockchain stock we’re going to
talk about is $XNET. XNET stock has a special
place in my heart because… I almost lost
my pants getting short squeezed by this stock.
But let’s look at $XNET. This his company
is based out of China. And supposedly are
heavily invested in blockchain technologies
blah blah blah. Never heard that one before.
Back to $XNET. The stock is trading around
$2 today selling off from the high of $25
in late 2017. Let’s look at this weekly
chart. Again, highly dilutive stock still
under the 50 ema. It needs to break above
and hold this $5.50 mark to start squeezing.
Once it reclaims that level, it has a lot
of room to run to the upside along with the
bitcoin momentum.
I know you guys are dying to hear my story
of being short squeezed on $XNET so let’s
wait any no longer. let’s go back to the
daily chart on $XNET. On november 29 this
giant red candle. I was shorting this stock.
This thing dumped all day long. They were
being sued by investors and being investigated
by the SEC. so those were all bad news fundamentally.
And technically speaking, this chart has been
over extended. It ran up from single digit
at $8 to $27 in like two weeks. So yes it
was due for a huge sell off. So I was shorting
this on this red day. Look this amazing sell
off from $19 all the way down to $13 at the
end of the day. I was green, but here’s
the thing, I was upset because I didn’t size
in as big as I wanted to. I only had about
⅛ size. And I didn’t catch this entire move.
So the next day, I gave in to FOMO. Fear of
missing out. And one of the deadliest sins
of day trading. Instead of covering all my
original short position on this gap down overnight
to $11, I added to full size at the market
open. And you can see on this chart and the
amount of buying volume that followed. All
the shorts were covering, large buyers were
steppinging in. the buying volume bars were
clearly more than selling from the day before.
This strong bounce caught me off guard. And
instead of covering my full size short like
a disciplined trader should do. I held it.
And i added near the end of the day near highs
around $14. And i wish the story just ended
here. I wish I could tell you I was smart
enough to cover the following day when $XNET
broke the previous day’s highs again and
ran up to $16. But of course, this bag holder
here wasn’t that smart.
I continued holding my short through eighteen
dollars the next day. I swear I aged five
years in like two days. And you can see, $XNET
started selling off after $18 the next few
days. I was so relieved and happy. It finally
sold off to $12 on December 8. One whole week
after I started in my short.
I don’t remember my exact short average
now. It was probably in the mid $12.50’s
somewhere around there. So at this point I
was green about forty fifty cents finally
I had dug my way out of this bag hold. But
what do you think happened next?
I still didn’t cover. I kept on holding
because I was thinking in my head, I knew
I was right, this trade is finally going to
go my way now. This is a junk stock it’s
sketchy and its definitely going to crash
down to $5 dollars now. And of course the
exact opposite is true. $XNET ran to $15 the
next day and this dumb *** finally covered.
I just couldn’t take anymore. I hadn’t
slept for more than a week, I didn’t go
out, I was sized in way too big, I was mentally
and emotionally drained.
So when I finally covered on December 11,
I had lost about $3/ share. It didn’t blow
my account but I had lost about three weeks
worth of profit. I was devastated. To me,
that was a lot of money. Maybe one day if
my channel hits 100,000 subscribers I’ll
release the actual trade and position sizing.
But it really still pains me to think about
this bag hold short squeeze.
Here are my mistakes I did and I believe these
are all common mistakes many traders go through
everyday.
The biggest one is FOMO. Then oversized position.
I added to a loser instead of a winner. I
bag held and gave in to hold and hope. And
most importantly, I didn’t adhere to my
risk management. I didn’t cut the loss and
just move on when it was so clear the chart
is going against me.
This just goes back to my emphasis on risk
management. It doesn’t matter if you win
9 out of 10 times, if that 1 time you lose,
you lose two or three weeks of profit. Which
is exactly what happened on my $XNET short.
Most people out there love to talk about their
big wins but I think there isn’t enough
information out there on potential losses
and how you should manage your risks. Trading
isn’t about making profits, it should be
about how to keep it. It doesn’t matter
if you make $1000 today but you lose $1200
or $1500 the next day.
When you properly manage your risks and keep
your losses small, the profits will add up
quickly. It really should have been emphasized
in any day trading education. But most people
just love to talk about big profits, super
cars, and trade and travel anywhere in the
world.
But I get it, risk management isn’t a topic
that SELLS, you know, it’s not sexy to talk
about and can be pretty dry to be honest.
I’ve gotten some requests from subscribers
for a video on risk management. But again,
I’ll only do it if my audience actually
wants to see it. So comment “risk management”
down below if you want to see a video on day
trading risk reward and risk management.
Man looking at that huge loss again is like
receiving a text from a bad ex months or years
later. I need a beer… Make sure to drop
me a like for sharing this gut wrenching story
of my big loss.
But just like any failed relationships, there
are always things to learn from it. if you
guys have any stories on bag holding your
losing trades, feel free to share down below
so we can all learn from each other and help
each other out. This is the humbled trader,
thank you guys for watching as always. And
I’ll see you next time.

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