TLDR Penny-stock dip-buy strategy centers on a volume/flow rule (3-5x) to gauge demand, targeting the first or second green day with a $1.50 pullback as support and an entry before 1pm; avoid desperate, ultra-low-flow or late-stage runners to improve odds of growing a small account.
Compute the volume-to-flow ratio to spot strong demand
Begin by calculating the volume-to-flow signal: compare total intraday volume to the intraday flow, looking for a ratio in the 3- to 5-fold range. In practice, this means when total volume is roughly 3 to 5 times larger than the intraday flow, demand is present and a dip-buy may be viable. The COCP example illustrates this: intraday flow about 17.63 million and total volume about 74 million yields roughly a 4x rotation, signaling a buy opportunity. This ratio helps quantify buying pressure, but it should not be used in isolation. Always corroborate with price action and other indicators for a higher probability entry.
Target the dip-buy on the first or second green day with $1.50 support on the second green day
The dip-buy strategy centers on the first or second green day, with a key price anchor around $1.50 on the second green day after a gap up. A pullback to that $1.50 level can offer a defined risk/reward setup if the stock resumes strength. If the stock finishes strongly near the day’s high after a bearish morning, it may gap up the next day, reinforcing the setup and offering a clearer entry on the following session. Confirming early strength within the green day and the subsequent action helps improve entry probability. Use the $1.50 level as a visible reference point rather than a rigid target in every case.
Avoid high-risk stocks: skip desperate-for-cash names, multi-day runners, and micro-flow plays
The strategy warns against stocks that look desperate for cash or are already on multi-day rallies, as they can reverse abruptly. It also cautions against very low-flow stocks that rotate 10–15 times (often 1–2 million in flow), where market makers can control and dump the stock, especially after SSR. These conditions increase the likelihood of sharp reversals and stops out losses. Instead, screen for healthier liquidity and steadier price action that align with the volume/flow signal. This helps preserve capital and keeps the focus on setups with sustainable demand.
Time your entries with a disciplined window: pre-1pm entries and avoid chasing after 2pm
Timing matters: avoid chasing strength or entering after 2pm, and aim to go long before 1pm. A structured entry window reduces the risk of late-day reversals and accommodates the dip-buy setup’s dynamics. Use multiple indicators to confirm the trade rather than relying on a single signal, which can improve your win rate. This disciplined timing mirrors the sample approach and helps align entries with those days when demand signals and price action cooperate. Consistency in timing supports clearer risk management and better returns over time.
Combine three signals for a higher-probability long entry
The strategy rests on three main signals: the volume/flow ratio indicating demand strength, the green-day pullback to the $1.50 support on the second green day, and avoiding late-stage, weak momentum runners. When these elements align with supportive price action, the probability of a successful long entry increases. The COCP dip-buy example illustrates how these signals work together: appropriate ratio, pullback to support on a green day, and early entry that aligns with price action. Always consider the broader price action and overall market context to avoid overrelying on any single indicator. Integrated signals provide a more robust framework for decision-making.
Practice, risk management, and a mindset geared toward small accounts
The video argues that this dip-buy strategy is a practical way to grow a small account when applied consistently. Start with paper trading or small positions to build intuition for the volume/flow ratio and green-day dynamics before scaling up. Implement clear risk controls around the $1.50 support and your chosen stop level to protect downside on failed dips. Track outcomes, refine your criteria, and stay disciplined about the entry window and signal confirmation. With patience and prudent sizing, this approach is designed to improve long-entry probability while protecting capital.
What is the core rule of this penny stock strategy?
Compute intraday volume divided by overall flow; when the volume/flow ratio is about 3–5x, it signals a strong buy.
What is the dip-buy setup in this strategy?
Look for the stock to form a first or second green day after a gap up, with a key support around $1.50 on the second green day; a finish near the day high after a bearish morning can precede a gap up the next day.
What is the key support level used for entries?
Approximately $1.50 on the second green day after a gap up.
What are the three main signals this method relies on?
The volume/flow ratio, the green-day pullback to the $1.50 support, and avoiding late-stage runners, with consideration of overall price action.
What timing and entry precautions should traders observe?
Avoid chasing strength or entering after 2pm; go long before 1pm and use multiple indicators to improve win rate.
What risks or pitfalls should be avoided?
Avoid stocks desperate for cash or already on multi-day rallies; beware very low-flow stocks that rotate 10–15x (e.g., 1–2M flow) where market makers can dump them, especially after SSR.
How does the COCP example illustrate the approach?
COCP shows intraday flow ~17.63M and total volume ~74M, about a 4x rotation, which supports a buy via the dip-buy on the first/second green day with the $1.50 level.
Who is this strategy best suited for?
It is presented as a way to grow a small trading account.
$10M Business ideas w/ The Most Interesting Guy In ...
My Simple but Profitable Dip-Buying Criteria...
"Coffee and a Mike" with Martin Armstrong | SOLUTIO...
What Is Google Antigravity? 🚀 AI Coding Tutorial & ...
The most overlooked supply and demand rule in stock...
How to Get UNLIMITED Leads For Cold Email in 2026...