Trading biotech stocks can be difficult because it’s highly volatile. There are a lot of factors that affect biotech stocks, like various data releases and news, among others. If you want to learn how to trade biotech stocks, you can benefit from expert trainers.
But for now, let’s start with the basics of trading biotech stocks.
How to Trade Biotech Stocks
When trading biotech stocks, one of the first things I do is scan for upcoming catalyst events — a great website for this is BioPharmCatalyst. It provides a database of biotechnology stocks with upcoming FDA events.
After we figure out when and what the upcoming data release is scheduled, we look at the charts.
Trading Biotech Stocks – Finding Stocks and Analyzing Charts
Now we find interesting chart patterns where a stock looks like it’s about to break out. Finviz has a free screener to filter for stocks to potentially trade. For example, I’ll filter by industry, average volume, and chart pattern.
One stock that came up was Cytokinetics Incorporated (CYTK). Now, this stock had an upcoming catalyst event and the company was set to report Phase II data. Biotech stocks tend to go up into a catalyst event and tend to break out.
I like to use BioPharmCatalyst to find upcoming catalyst events.
In this example, I bought 3K shares of CYTK at $8.80, ended up selling 3K CYTK at $9.20, and took my profits of around $1,300.
The Bottom Line
When learning how to trade biotech stocks, always research companies properly and look for upcoming events. It might be challenging to learn how to trade stocks, so keep at it and you’ll quickly learn all the ins and outs of trading.
Need more biotech stock tips? Go ahead and schedule a free training session that works for you!