BECOME A MORE PROFITABLE TRADER WITH THE RIGHT EDUCATION

Get on our mailing list so you know when we release free training, live classes, new courses, and even discounts and promotions.

4 BIG RULES to Investing in IPO’s the RIGHT WAY

Today I’m going to share with you my four key tips to trading and investing in IPO’s.

A lot of people are interested in trading IPO’s. For example, you want a nice hot stock, and it’s coming in, and then eventually it explodes later down the road.

The thing is that a lot of new companies come in because there’s a lot of great hype. And then you hope to get it near the bottom. Recently over the last decade, those IPOs have been coming out a lot later than they usually do.

That’s because now you have a lot of venture capitalists. There’s a lot of wealthy people that will invest in these companies’ weight early on. And you’re now getting the IPOs or the initial public offering much later than you usually would. Let’s say 10-15 years ago.

That’s because now there are new ways to raise money from crowdsourcing to private investors, angel investors, and all kinds of different ways.

However, there’s still an excellent opportunity if you’re investing in the right stocks at the right time. And you allow them to run you can make some significant investment decisions allowing that stock to move into the future.

Take a Look at The Market

If you invest it on Facebook even if it was early on in the IPO, which was not as early as way back in 2010 or earlier. 

But even then, even if you invested in 2012, 2013, 2014, you’re still way up at higher prices. And that’s what you ultimately hope to do when it comes to investing in these other companies.

I want to share with you there’s a lot of different IPOs.

For example, like DocuSign right here has come out. You also have things like Uber. You have let’s see BJ’s as well. You have Dropbox and Spotify technology and Snap as well.

All these companies have been on the market now for a little bit of time. But not all of them are performing quite well.

If you take a look here at a Snap, you can see that this company initially opened up at this price. And now, in fact, at the current market price, it is lower.

Not the best things.

DocuSign – if you look a five-year, it’s a very near or even where it was.

Let’s check this out better on the chart. It’s a lot easier to see.

You can see this one right here starting to come in and possibly do a breakout. But you can see you at IPO time a little bit lower, here digesting sideways. It’s a lot higher than where it was.

But not anything amazing because it ran up if you got initially, and now it’s almost back breakeven over the last two years. Checking out BJ’s. Let’s look at a five-year. You could see this one; it’s almost back where it was.

What are the rules or thought processes to trading or investing in these stocks?

Rule #1 – Be Patient 

You need to be patient and allow these things to set up. What a lot of people do is they get into these stocks, or they want to get in it real quick, and they don’t wait for big money to step in. They don’t wait for a nice breakout.

Look at anything like Facebook.

You have to be patient in this company to allow that stock to digest for almost a year to two years before that stock made its way.

If you look at even AMD recently, you know that stock over the last few years has been dormant. And now it’s continued. 

This isn’t an IPO. But check out any other new company.

It takes time for these things digest.

Looking at Snap, it’s still not moving and breaking out past that IPO.

If you look at Alibaba, which was an IPO, there’s Baba.

You can see this one started at about a $90 a share, and then it pulled back a bit, so for a little bit of time, it went sideways.

And eventually, you had it’s nice and finally breaking out just a couple years later. You have to be patient to allow those things to set up.

Rule #2 – Know the Risks and Capital Investments

What happens is a lot of people they get into the stock. They’re not sure of how much capital to put in, but they overdo it. They put too much cash into an IPO because they think this is their investment.

Remember, IPO is a little more speculative. It’s a little more new. It’s not like Microsoft. It’s not like something that’s been around for a while.

If you look at Microsoft, it’s got a proven history. And it goes back many many years to right now 1987 or so.

Even a Procter & Gamble – many years in the past that has historical data.

But if you’re doing anything like a snap, well, you don’t have a ton of data. If you’re doing anything like a BJ’s Whole Foods or wholesale Club, it doesn’t have a whole past historical data. You need just to know the risks and the capital invested.

Let’s just say here’s your portfolio allocation. You don’t want to invest all of that. You might invest only a little part of that portfolio. Or even less into these IPOs.

That’s because that way, you still have the stability of your financial portfolio invested, but you have some exposure to the IPOs. And that’s the smarter approach that many people don’t think about.

Rule #3 – Take Profits Into Strength

A lot of people don’t take profits into strength. All they do is they hold on to these stocks. They think it’s going to be a great stock. I’m going to hold onto it forever. 

I’ll show you something.

Here is Spotify.

It’s opened up, continues, and still lower.

Here is Sirius XM.

Look at this stock. We had our IPO right here, moved up, look good. Then sold off, and now it continues to be in the gutter for almost 20 years.

Think about that. Do you want to be stuck in a stock for 20 years?

And initially, it might have looked good. It was good for a few years when the big hype was 1995 to about 2000 — about five years. Then after a while, things just sold off and just continued to tumble.

My point being is that no matter what company (even GoPro), sometimes it has its days. And then they don’t evolve because they’re so big. It’s tough to turn a big ship around.

And here at this stock, it’s now multiple years in the gutter. Will it continue to break out as a speculative play? No, probably not.

Chances are it won’t. Sometimes they do, but it’s challenging.

Take profits into strength, and that is my rule number three. Because if you don’t take profits in the strength, the market will take them for you.

What do I mean by that?

Let’s say you got into the stock over here on GoPro.

Well, it goes up quite a bit of man this thing’s flying. At that moment, take a little off. Take half off a quarter off a third. Goes up a little more, another half, another quarter, another third.

And once it finally starts pulling back, maybe you’re out. Perhaps that was it. That was the investment. It was for a little bit. These companies don’t always stick around for an extended period.

Rule #4 – More IPO’s Will Follow

You need to remember. This isn’t the end. This isn’t the last one. There will be more IPOs. Just like here we’ve got BJ’s that just came out. We’ve got Dropbox, Spotify, Snap, and Uber.

There will be more companies. You might be looking at the reports, and you’re looking at, let’s say, Dropbox.

Here’s an IPO, here’s what it’s doing. Here is what’s happening, and maybe it’s not the one to invest. The chart doesn’t look good. It doesn’t look sustainable right now.

But things could turn around. It’s fairly new. But just like you had Twitter initially.

They’re not profitable. You can see it’s multiple years. It’s just the same where it is. But you do have some of those success stories like Facebook or many other companies.

Also, take a look at Tesla.

If you got into it here’s the IPO took a couple of years. And then it exploded. It was successful for many people if done accordingly. But remember if you miss it, there will be more. There will be more IPOs.

They keep coming. There’s Tesla came out in 2010. And you have a Snap now that came out in 2017. More IPOs will come. There’s Etsy that also came out in 2015.

You have Wix that came out in 2013, and Shopify came out in 2015.

You can see these things do eventually sideways action, and then you get that explosion effect that may happen. And that’s what you’re looking for.

Final Word

You have to understand these rules and these concepts if you want to make it in the IPOs.

Otherwise, if you think I’ll just hold it invest it forever, some of those things as you saw, don’t pan out and don’t pay well.

Join other stock who get a trading edge each week with our newsletter

Get our free stock market tip, video reviews, and exclusive announcements.

No spam, no gimmicks, no junk - Unsubscribe anytime

I'M SASHA.

Thanks for joining me on my trading website where I share with you about trading stocks and options.

DOWNLOAD 100 Stock trading tips Book

Ready to check out some of our best-selling books that can help you become a better and more profitable trader? Check them out by clicking the link below… 

Video recaps on the recent market trends

Summary of recent market activity looking at swing chart opportunities, potential setups, and technicals.

Stock market picture charts annotated

Quickly review screen captured stock charts with annotations. Includes support, resistance, ABCD patterns, and possible breakouts.

want some helpful advice?

Pay-Per-Minute Coaching

I am scheduling helpful coaching sessions for people who are interested in real-world advice & guidance where you only pay per session. No long term commitment required.

This website and content is for information purposes only as Rise2Learn, TradersFly, and Sasha Evdakov are NOT registered as a securities broker-dealer nor an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Rise2Learn, TradersFly, and Sasha Evdakov cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Rise2Learn, TradersFly, and Sasha Evdakov in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Rise2Learn, TradersFly, and Sasha Evdakov accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

THINKORSWIM

OPTIONS PLATFORM

Learn to see how I personally use the ThinkorSwim platform to trading options and what are some of the tips and tricks to using this platform efficiently!

VIDEO TRAINING

OPTIONABLE STOCKS

Enter your email address below and get access to our downloadable report on the 50+ great stocks for Options Traders!

50+

DIVIDEND PAYING ETF's

Want to know the top 7 ETFs that pays the biggest dividends in 2020? Download this list now and start earning your dollars!

7

15 HOT STOCKS

WARREN BUFFETT LOVES

Trade and earn like Warren Buffet! Here are the stocks he invests in!

Ready to Get Our Educational Videos Each Week?

If you are serious to learn how to trade stocks more profitably, make more money, and trade with confidence...

 

Then sign up to get our free educational videos!

AWESOME!

Just one more thing... 

Ready to Learn Profitable Strategies to Trading Stocks?

If you are serious to learn how to trade stocks more profitably, make more money, and trade with confidence...

 

Then sign up to get our free educational videos!

AWESOME!

In order for you to get your goodies and freebies you have to confirm your email address.

 

To confirm your email address, just go to your email inbox (or check your spam) and click the link that's inside the email that states you want to receive messages from us.

 

That's its!

Just one more thing... 

Portfolio Allocation - Percentage of Each Stock

If you are serious to learn how to trade stocks more profitably, make more money, and trade with confidence...

 

Then sign up to get our free educational videos!

Quickly Calculate Mid-Day Volume

This Excel sheet will allow you to quickly find out if your stock's volume is trading above or below the daily average during the middle of the day.

Top 15 Dividend Stocks for Retirement in 2020

Download our list of the best stocks for retirement. Simply enter your email address below to get the PDF!

Buying or Building a Trading Computer for 2020

Learn how to buy the right computer for your trading needs or choose the perfect parts if you are custom building a trading computer!

 

 

VIDEO COURSE

Top 25 Tech Gear for Traders

If you are serious to learn how to trade stocks more profitably, make more money, and trade with confidence...

 

Then sign up to get our free educational videos!

Awesome Phone Apps for Traders

Discover these awesome phone apps most traders use on trading! Earn money anytime, anywhere with these apps!

Do you want to download a list of over 125+ popular stocks that you should keep your eye on?

 

Enter your email below and we will email you the list of 125+ hot stocks!

OPTION TRADING GEEKS

Download my easy worksheet so that you can quickly see and know what the greeks will do to your position! 

 

Enter your email address below to download it!

OPTION STRATEGIES

Enter your email address below and get access to our video strategy session on 25+ option strategies and how to set them up!

25

How Long Will it Take to Reach $1,000,000 in The Stock Market?

Want to see for yourself how long it will take you to reach $1,000,000 based on your personal return?

 

Then download my Excel cheatsheet for FREE to see and play with the numbers!

OPTIONS GREEKS

Ready to get a deep understanding of the option Greeks?

 

Get access to my video training by entering your email address below!

VIDEO TRAINING SESSION

Ready to Get Our Educational Videos Each Week?

If you are serious to learn how to trade stocks more profitably, make more money, and trade with confidence...

 

Then sign up to get our free educational videos!

AWESOME!

In order for you to get your goodies and freebies you have to confirm your email address.

 

To confirm your email address, just go to your email inbox (or check your spam) and click the link that's inside the email that states you want to receive messages from us.

 

That's its!

Just one more thing...