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| NOVEMBER 21, 2024 Have you ever felt like the market was targeting you specifically? Like the forces behind the markets wanted to embarrass you and no one else? That’s about how I felt Tuesday morning. If you’ll remember, in Tuesday’s newsletter, I talked about one of my core pieces of advice for anyone from my mother to newbie traders: to coin a phrase that only I have ever said before: “just do it.” People waste a lot of time worrying about how to get started, what to do first, what might happen if they do something wrong, etc. The only counter to that is to dive in. Personally, I’d rather take it on the chin through action than miss out through inaction. And this week, I certainly got to experience that! In Tuesday’s newsletter, I mentioned wanting to dive back into more trading because I’d been pretty lax about it recently. So as soon as I shipped off that newsletter, I did exactly that and bought some puts on CVS. Let’s take a look at the 5 minute chart to see exactly where I bought those puts… Oops… CVS raced higher almost immediately after I entered, and I was down roughly 40% before I could even blink. It wasn’t a good day. And no, this isn’t a story of how the markets magically reversed themselves and delivered for me against all odds. I lost money on this trade. But here’s the good news: I didn’t lose much money. Because I also followed my other core advice of never risking more than you’re willing to lose. There really isn’t anything more important for traders, especially new traders in my opinion. As Jeffry advised yesterday in our Q&A session, when you’re new, you’re probably not going to be very resilient towards losses. But that’s a reflex you HAVE to be able to strengthen. A lot of times, we’ll get asked in our webinars how much you stand to lose with a system, and I understand why. It’s a big question. But I actually like the systems where you stand to lose 100% if you’re wrong. That way, I can go into the whole trade with a crystal clear picture of what’s on the line. And if I don’t like my max loss, I either don’t take the trade or trade fewer contracts. On CVS, I wasn’t risking enough to worry about a 40% loss. So I stayed in the trade hoping things might reverse. They did over the course of Tuesday but then jumped even higher on Wednesday morning, when I closed it out for about a 60% loss. Oh well. At the end of the day that ended up being like $45. So I think I’ll survive. But if I hadn’t known my risk going into things, I might have been in trouble. Hopefully you’ve had better luck than me this week, but if not, just remember: there’s always another trade. To your prosperity, Stephen Ground Editor-in-Chief, ProsperityPub P.S.: One of the tools I love to use to find trades is Lance Ippolito’s scanner. And when I trade with it, I usually have a lot more luck than I did flying solo this week :) If you want to know more about it, Jack and Lance got together to talk through some of his top scanner picks today. See what they found here |
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ABOUT US: We believe that the opportunity for financial literacy and freedom belongs to all people, not just those who already have years of investing experience. Prosperity Pub provides an array of educational services and products that will help you navigate the markets and become a better investor. Trading is made simple through our online forum full of trading techniques to give you the best tools to kick-start your investing journey. We offer collaborative webinars and training; we love to teach. No matter the opportunity, we bring together a strong community of like-minded traders to focus on analyzing market news as it’s presented each day. |
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