Successful traders take it trade by trade. They don’t try to predict, they react.
Yes, an experienced trader might take speculative trades. But the key is they don’t get stuck in it. If it goes wrong, they get out. And if it’s speculative, they take a smaller position size.
It’s not about being right all the time. Nor is it about the money. It’s about learning the process, creating a plan, and sticking to it.
When you take it trade by trade it’s much easier to focus on the risk versus reward. A stock won’t bend itself to your will. The market never bends to your will. It doesn’t care about YOU at all.
Keep reading for more. First…
Table of Contents
- 1 Observing Labor Day
- 2 The Risk vs. Reward of Traveling
- 3 Trading Mentor: Trading Questions From Students
- 4 Trading Lesson of the Week: Take It Trade By Trade
- 5 Millionaire Mentor Market Wrap
Observing Labor Day
The market’s closed for Labor Day today. No doubt, celebrations will look different in 2020.
So I urge you to remember what this holiday is all about: the hard-working people who make this country tick. Think about how you contribute. Use the extra day off to prepare. And if you’re a big StocksToTrade fan like I am, be sure to check out their awesome Labor Day sale … I’ll give you more details about it later in this post, plus some special links for my readers to use.
Now, back to risk versus reward…
The Risk vs. Reward of Traveling
I’m still not traveling. It’s not worth the risk. The risk versus reward is bad. So I’ve been working.
One of the beautiful things about trading and teaching is that I can make money without risk — or at least very little risk. I’m very fortunate. I understand some people have to go out and some have to travel for work. If that’s you, please stay safe. We’re not out of this yet. As for me, I don’t have to travel. So I don’t.
But there’s plenty for me to do…
New Karmagawa Fundraiser for Elephants
An estimated 100 elephants get killed by poachers every day. They’re killed for their ivory tusks, meat, and other body parts. The worldwide elephant population has decreased by 62% in the last decade.
If the poachers don’t get stopped, elephants could go extinct by 2030. We MUST not let that happen.
Karmagawa is donating 100% of funds raised to charities like the International Fund for Animal Welfare and the Sheldrick Wildlife Trust. Please donate whatever you can. We appreciate ALL donations, great and small. Together we’re going to save the elephants from extinction. Let’s do this!
So far we’ve raised $10,874 of our $200,000 goal. Donate to help save the elephants here. As always, if you’re not in a position to donate, share the link. Let’s prove the power of social media for positive change in the world.
Before I get to today’s important trading lesson … Happy Labor Day! The StocksToTrade team just shot this over to me. They’re having a special extended Labor Day Sale. (It runs through September 14.) Check it out….
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Trading Mentor: Trading Questions From Students
The focus this week is on taking it trade by trade. Too many students want it to be an exact science. It’s not. Every trade is a little different. That’s why you should go into every trade with a plan. Learn how to create a trading plan here.
So there are two sides to this. On the one hand, it’s not an exact science. But there are rules to guide you.
With that in mind, let’s get to the student questions…
“$PASO spiked on news about a reverse merger but the filings sound overly optimistic. Is this just another penny stock pump?”
The funny thing is, PASO gapped down on day two after a big first green day. I had to take a small loss. It was surprising considering how perfectly it finished on day one. But was it a huge surprise? Let’s just say it wasn’t earth-shattering. I took my loss and moved on. And on my next trade, I made back all my losses and more.*
(*Please note: My results are far from typical. Individual results will vary. Most traders lose money. I have the benefit of years of hard work, dedication, and experience. Trading is inherently risky. Do your due diligence and never risk more than you can afford to lose.)
Check out the PASO three-month chart:
As you can see from the chart, if I had held PASO … if I’d said, “This one’s different” … it would have been a BIG loss. Some people say I’m cynical. But that helps me to follow rule #1: cut losses quickly. And THAT protects my profits.
Retweet/favorite this if you want a video lesson on how I made $2k on the biggest % gainers today $NAFS & $LLLI & protected gains cutting losses on $PASO $WKSP & I'll also review why $ALYI $GAXY $BRTXQ $AABB $BANT $DSGT $SFOR $RGGI $IGEN are NOT https://t.co/4lKUY5B6aw dip buys!
So the lesson is to keep moving and expect the worst. Be cynical.
“OTCs are hot. Why? Is this a trend?”
It's not just a record $DIA $SPY $QQQ every day, I don't trade $AAPL $TSLA $ZM but now OTCs have come alive so I've picked the biggest % gainer 4 out of the last 5 trading days with $BANT $TTCM $ALYI & $PASO so pressure's on today LOL…kidding, I just take it 1 trade at a time!
But many of those same stocks dropped the next day. One of those was PASO from the first question…
Recent big OTC winners $BRTXQ $GAXY $ALYI are all down 30%+, more recent spikers like $XTRM $BANT $VSQTF $ATDS $AXXA $PASO are down 10-20%, the day of reckoning is here, why I NEVER hold & hope! Holding & hoping is NOT a strategy as $GNUS $IDEX $MARK $CTRM $ATNM longss can attest
People often ask me, “Why is this happening?”
I don’t know. Why is the sky blue? Why are we alive? What’s the purpose of life? I don’t have answers to those questions. And when it comes to trading…
I just try to react.
React Rather Than Predict
If you see one OTC spiker … and then another and another … you say, “Wait a minute, this might be a trend.”
It’s no different than if you see Tesla spiking and then other EV makers start spiking. You say, “Ah, this is a trend.”
Check out the CNET three-month chart:
But the key is to take it trade by trade and understand how fast things can change. Last week, the S&P 500 and Nasdaq hit new highs. The Dow had its best day since mid-July and closed over 29,000 for the first time since February. Then the entire market tanked on Thursday and Friday.
This leads me to the…
Trading Lesson of the Week: Take It Trade By Trade
Repeat after me: “I will take it trade by trade.”
So many people set themselves up for disappointment and failure by being stubborn. Or proclaiming they’re taking this week or that month off. Or by holding and hoping. Or deciding my rules don’t matter for this trade or this stock.
A great play can happen on any day, at any time. You have no idea.
So take it trade by trade. And be available to trade when there are trades available.
The more days you can be available to trade, the better. Not all day. If you can be there for the power hours, the market open and close, that’s good. And 2020 is a special year so far. So you should push it. Don’t waste it.
If/when we get a vaccine and life returns to some semblance of normality, whether that’s later this year or in 2021 or 2022…
… a lot of traders who are in the market now will be gone.
Remember, most traders lose. Most of those people are losing now. They’re probably getting very unhappy. They can’t wait for different job opportunities to pop up.
During the pandemic, many don’t have much choice. That’s why there are so many opportunities each day. But when it ends, a lot of them will go back to the safety of their 9-to-5 jobs. So take advantage of this market while you can. Study while you can.
Millionaire Mentor Market Wrap
As I write, we’ve had two days of market carnage following the best 100 days in stock market history. It wasn’t unexpected. We need corrections in the market. But nobody knew when it would happen. Not me. Not anybody.
But the thing is…
For me and my students, it doesn’t matter. We don’t try to predict the market. We react to it. Which is why today’s trading lesson is so important. As soon as you stop taking it trade by trade, you set yourself up for big losses.
If trading is like a battlefield, then every trade is a mini-battle. And sometimes, no matter how much you think you’re right, you’re gonna lose.
So study. Come to the battlefield every day prepared. Have a plan before you get into a trade. And if you lose, keep moving. There will always be another hot stock.
If you understand, comment below with “I will take it trade by trade.” I love to hear from all my readers, so comment below.