4 Tricks To Protect Your Account In 2025

Updated 8/13/2025 6 min read

In this article Last trade Nov, 25 11:31 AM

ALTS-1.97%
ALTS - NASDAQALT5 Sigma Corporation
$1.75-0.03 (-1.97%)
Volume: 1.19M
Float: 90.90M
$1.70Day Low/High$1.86

Losses are part of trading.

It’s not fun …

But it’s important that new students accept the fact that they’ll lose every now and then.

I still lose to this day. And I’ve been trading for more than two decades.

Even my most successful student (Jack Kellogg: $20 million in trading profits) will take a loss occasionally.

Our main goal as traders is to minimize those losses to let our profits shine through.

That’s why:

We only focus on the best plays.
- The strongest stocks, the best price action, etc.
We use proper risk ratios.
- Smart entries with a profit:loss ratio of 3:1 or higher.

There’s a process that my millionaire students and I use to achieve this.

It consists of specific do’s and don’ts that keep our accounts safe while profiting from the biggest stock spikes in the market.

But on Monday this week, August 11, I broke my rules and paid the price.

I lost $9k from the drop on ALTS Sigma Corporation (NASDAQ: ALTS). Look at the price action below.

Every candle represents one trading minute:

ALTS chart intraday, 1-minute candles Source: StocksToTrade

This price action is SCARY.

And it’s a perfect example of the dangers in this industry. But, had I followed my rules, I could have avoided this loss completely.

My trading process protects against price action like Monday’s nose dive on ALTS.

Learn from my mistakes or suffer a similar fate.

Table of Contents

1 4 Tricks To Protect Your Account
2 #1: Price Action
3 #2: Distractions
4 #3: Use Every Tool Available
5 #4: My Most Important Rule.

4 Tricks To Protect Your Account

There were four major screwups that led to my loss on ALTS.

Let’s go through each individually.

#1: Price Action

I traded ALTS earlier in the day for a quick 8% profit.

And when the stock followed my earlier trade, I got cocky.

Cocky enough to ignore the triple-top price action around $20. Look at the ALTS chart below again:

LTS chart intraday, 1-minute candles Source: StocksToTrade

When a stock fails to break past key resistance three times, it’s a sign that there’s a pullback coming.

Sometimes it can develop into a squeeze. But it’s better to be safe than sorry.

I bought shares after the triple top in hopes of a squeeze. It was a bone-headed move and an obvious mistake.

More Breaking News

Read Jack Kellogg’s: 7 Signs A Ticker’s About To Die for more trade-essential price action.

#2: Distractions

In my Sykes’ Sliding Scale, I explain all the criteria that I use to determine whether I should make a trade.

One of the factors takes into account a trader’s personal schedule.

I was in the gym when I traded ALTS for a loss. I was greedily entering orders between sets.

And I wasn’t even on my laptop, I was trading with my phone.

We want to trade the hottest stocks at the hottest times. But if you’re too busy to trade, make the decision step away completely.

#3: Use Every Tool Available

I often say that trading is like going to war: The traders with the best tools win.

With that said, I have access to the StocksToTrade software. Which has a built in news scanner.

And instead of checking the news when the stock started to drop, I stubbornly tried to get my average down without investigating the sharp price drop.

Little did I know, the company announced a public offering priced at $7.50 per share. Far below my average entry price of $15.06.

All I had to do was look at the news and I would have sold my position for a much smaller loss.

This was a stupid, stupid, stupid mistake.

#4: My Most Important Rule.

All my other failures aside, this rule should have saved my position…

Cut your losses quickly.

Even though I missed the triple top.
Even though I was trading in the gym.
Even though I missed the offering news.

I should have cut my loss when the stock fell below my support level.

It was a reckless trade, but it was still a trade with a plan. And when the stock started to work against my plan, I threw all my notes out the window.

Here are the trade notes from my $9k loss on ALTS: