Patience Pays in this Market!

It’s a new month! And I’d like to take this time to look back at the previous year…

We’ve definitely been through a lot during the past year. Even with all the ups and downs, it’s no secret that 2020 was a HUGE year for the stock market.

It felt like there was money to be made anywhere you looked, and are things any different this year? So far, it doesn’t seem like it…

Remember, I’m bullish till proven otherwise!

However, it does look like we need to adjust for longer time frames in the market we’re in now.

We’ve been seeing less big melt-up moves and more steady crawls upward. This is fine! It only requires a little extra patience.

There are always opportunities to make money in the market and that still holds true today.

After all, that’s what it’s all about, making money! It might not be as fast and furious as it was a year ago, but if you adjust your time frame a bit you can still make great gains for your portfolio.

So what does adjusting your time frame look like? Well for me, I’m an options trader so it’s as simple as buying extra time until the option’s expiration date. By doing this I’m essentially buying myself the extra time I might need to be right.

An extra two months is a huge amount of time in the options world! And depending on the options you’re playing, it might not even cost too much extra for that added time security.

Bottom line: Having patience in the market will pay you back in spades!

Keep it In the Money,

Alan Knuckman

Alan Knuckman
Editor, In-The-Money

Trading Tip of the Day: How to Win With Long-Term Plays…

Greg Guenthner
You can net yourself some major profits by concentrating on longer-term trades.

For a long-term play, we’re looking for a few key indicators:

  1. A bullish market theme, such as reopen trades, “safe” tech plays or e-commerce.
  2. A stock chart that’s steadily moving bottom left to top right.
  3. An ideal buy point as 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.

You don’t have to perfectly predict the top or bottom of any given trade. In fact, that’s pretty much impossible to do consistently.

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

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

One more 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 idiosyncrasies and pinpointing ideal buy zones for your trades.

Just like any other skill, if you put in the time and pay attention, you’ll start to get more confidence in your abilities. So stay consistent, and focus on what works!

— Greg Guenthner

You May Also Be Interested In:

Filling Stock Market “Potholes” for Profits

I’m back in Chicago this morning for the grand reopening of the options trading floor. I’ll have some more updates on how the reopening goes later this week. Meanwhile, I just returned to the city once again from my lake compound — where we also had plenty of work to do over the weekend. While...

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...

View More By Alan Knuckman