Don’t Sweat the Red!

Is there a way to guarantee success in the markets?

Maybe not, but there is one very important tool that can help you succeed in ANY market environment…

It’s very simple, all you need to do is develop a plan!

I’m serious! Having a solid plan for what to do in a variety of different market environments will pay off in spades when unexpected events throw the market for a loop.

When you have a plan, you are always prepared while other investors and traders are caught with their pants down.

The plan can even be as simple as clearly defined exit strategies and profit targets.

The hardest part about this is actually sticking to the plan you develop!

Take it from me, I know it can be hard to cut losses… And on the flipside, when you see your trade doing well, there’s that fear of missing out (FOMO) if you sell too early.

But try to let that fear go, nobody ever went broke taking profits and there will ALWAYS be opportunity in the market!

As for cutting losses, the last thing you want to do is see all your hard earned gains disappear if you decide to stay on a sinking ship.

Now, it can sometimes be hard to determine when a trade is salvageable or when it’s dead in the water. But having a clearly defined risk tolerance will provide more benefit than harm in the long run.

Bottom line: Create a plan, and stick to it!

Keep it In the Money,

Alan Knuckman

Alan Knuckman
Editor, In-The-Money

Trading Tip of the Day: Important Keys to Playing Long-Term Trades

Greg Guenthner

You can capture serious profits by playing the market’s biggest moves and concentrating on longer-term trades.

For a long-term play, you want to look for:

  1. A bullish market theme, such as reopen stocks, airliners and cruise ships.
  2. A stock chart that’s moving bottom left to top right.

An ideal time to buy would be when the play bounces higher off important support levels.

Of course, buying — specifically figuring out when to buy for maximum profits — is the most important part of this whole process.

Don’t blindly throw money at a play just because it’s trending higher. Instead, you should wait for a bounce near a key support level (along a trendline or moving average) and enter the trade strategically.

It’s very simple… If the stock fails to bounce in the neighborhood of your support line, then don’t buy.

One last important note: You don’t have to wait for perfection.

Sometimes, a stock will bounce nicely off your support line or moving averages. Other times, it will “trick” weak hands into selling by briefly breaking through support before quickly recovering.

The more time you spend studying charts, the better you will become at learning the market’s patterns and pinpointing ideal buy zones for your trades.

— Greg Guenthner

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Buy This “Juicy” Pullback…

Since stocks had shot higher uninterrupted since early November, there was a lot of hang-wringing as the averages finally dropped. But there was a great risk-reward play brewing for anyone paying close attention…

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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