How to Survive the “Long, Dark Winter”

It’s cold outside. The pandemic rages on as we await a painfully slow vaccine roll out. Meanwhile, you’re stuck in your house with nothing to do…

Chicago has been called the best city in the world during the summer. Since I grew up near the Great White North, I have no complaints about the long winter, either. But staying in the city has become mundane and monotonous during this shutdown. The energy and excitement are gone. Semi-closed restaurants and bars combined with all of the cancelled outdoor events have taken away the rewards of making it through the winter woes.

It’s going to take discipline to get through this long, dark winter with our heads on straight. Luckily, our trading mindset should help keep our minds in the game. After all, the process of trading is glorified more than it should be. IDENTIFY, EXECUTE, MANAGE, our plays to MAXIMIZE profits is methodical and tedious if you are disciplined and remove emotion from the equation.

The trading isn’t always fun. But making money is a rush!

Yet here we are, adapting to the “new normal” every single day. Adapt and innovate is the mantra of great traders! Technology has changed the game almost completely from when I first started. The skills to trade in a pit just don’t translate to the present world of opportunity. The tens of thousands of ex-floor traders found a new way — or were out of the business because they had no edge over everyday investors.

Technology has empowered Main Street investors just like you! Even a pandemic shutdown can’t stop you from booking profits.

We’ll make it through this mess. The stock market already knows this is true – that’s why we’re seeing new all-time highs once again this week. Remember what I say: Optimism always wins!

Keep it In the Money,

Alan Knuckman

Alan Knuckman
Editor, In-The-Money

Trading Tip of the Day: How to “sell the rips”

Greg Guenthner

Alan always reminds us to buy the dips and sell the rips.

But what does this really mean?

He’s not telling us to simply grab shares of any stock that’s dropping — and it would be silly to sell shares just because they’ve posted a small gain.

This old trading adage means that we need to be aware of moments when a particular trade gets a little too hot. You want to be able to buy into a new play before a big runup, ideally as it begins to firm up following a constructive dip.

Then, you need to seize those moments of euphoria when all the latecomers start to pile into a trade. We’ve seen more than our fair share of euphoric action lately. Does this mean the market is headed for a huge crash? Absolutely not! But we are in a spot where selling the rips and taking profits could pay off if we do see a quick pullback or correction.

As always, stocks need time to consolidate big gains. Taking profits on major thrusts higher is a great way to stay profitable — and one step ahead of the herd.

Plus, you’ll be ready to ride the next leg higher whenever it materializes.

— Greg Guenthner

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Alan Knuckman

Alan hails from the home of options trading in Chicago, where he began working as a clerk on the floor of the Chicago Board of Trade (CBOT). Beginning with his days on the floor, Alan’s worked with all aspects of the options markets for the past 25+ years.

Transitioning from a clerk to a floor...

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