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Last week, I baffled LottoX members when I closed out all my positions on Friday.

They’d seen me do it before.

But I never really explained why…until now.

You see, one of my core trading principles is staying nimble. Attack when my signals give me the green light, and retreat when they are unclear. 

So why did I punt my positions?

  1. I wasn’t thinking objectively
  2. I wanted to protect profits
  3. Market internals turned bearish

From my experience I’ve found that people search for reasons to stay in a trade…yet they give little time to ask “Is there a reason not to be in this?”

Today I want to talk to you about this very important topic. 

 

Emotional inventory


It’s incredibly hard to know when your emotions have taken hold of your trading.

Most of us get caught up in the moment, not realizing how little objectivity we have.

If you ever find yourself in these situations, chances are you’re too emotionally involved.

  • You hit your stop loss but want to give it a little extra room
  • The setup is on the daily chart, but you’re trying to analyze movements on the 5-minute chart
  • After closing a trade, you immediately start looking for another
  • In slow markets, you find yourself scanning chart after chart

Trading is an exercise in probabilities. You manage your risk and win-rate to come out ahead.

For me, that means using a well-defined methodology like my TPS Setups.

Now some folks may trade based on the news.

Even they work with stops and targets.

Plus, they know when they’re searching for trades for the heck of it.

Whenever I find myself itching to get into a trade or with too many positions on, I immediately pull back.

No other mistake cost me more money than losing emotional control.

So, even if it means missing some profits or accepting losses, I do it nearly every time.

Otherwise, I run the risk of taking on too much risk or putting myself in trades that aren’t clean setups.

 

Protecting profits


For myself, once I get up enough, I often cut back on my trades if not end them all.

And it’s a rather simple reason.

Making over a certain amount of money means that I’m too exposed.

What I mean is I have too much at risk from open profits.

With the way I trade, my profits come from explosive moves in stocks.

And explosive moves can often lead to dramatic pullbacks.

So, rather than losing my hard-earned money, I take my profits and call it a day on that trade.

That’s different than exiting several trades at a profit and then entering new ones.

Forcing myself to exit the trades, I lock in my profits. 

Quite often, the risk associated with a drawdown vs an extended run isn’t in my favor at that point.

That’s also why I will scale out of trades on a regular basis.

 

Watching the broader market


Intuitively, I know that the Friday of Options Expiration Week isn’t a great trading day.

But, when a friend showed me statistics, he confirmed my suspicions.

Over 20 years, the SPY closed higher than the open only 43% of the time compared to a normal day of 53%.

While that’s not a huge deal, it’s enough for me to reconsider my positions.

I’m a big proponent of trading with the tape, not against it.

And while I can use selloffs to buy stocks on the cheap, I rarely do.

My trading focuses on going with the trend, not against it.

I’ve never found success trying to pick off bottoms or tops.

So, rather than trying to do that, when I see the market rolling over, I pull back on the throttle.

I like to use my market internal health indicators to judge the bullishness or bearishness.

These help me analyze the sentiment and decide whether I want to stay in the market or cut down on my positions.

Plus, they work great to help me time intraday trades.

 

Limiting my trading


Now, one thing I often do is limit myself to a certain number of trades per week.

Sometimes I only get into the market twice.

So, when I do, I make darn sure they’re some of the best setups I can find.

That’s the premise behind my Double Down service.

It’s not just about the education or getting amazing trade ideas.

It’s about learning the patience necessary to grow an account over time.

Click here to learn more about Double Down.

Author: Nathan Bear

Although Nathan Bear has made options trades that resulted in over 1,000% profit, he’s “only made a few” he says wryly! Nathan is one of the best options traders there is. Period. His unique approach incorporating his adaptive 3-step “TPS” trading strategy, has so far brought Nate well over $2 million in realized trading profits.

Nate is a down to earth trader who now imparts his simple trading methods and relaxed approach to his trading subscribers to help give them the keys to trading success.

Markets like the one we are in, offer tremendous opportunities to make  A LOT of money in a short time frame.

You just need to know where to look.

I don’t see myself having a problem finding my next Double Down trade ideas

…there is just so much action right now.

That’s why I want to talk to you about some setups that I’m finding success with.

 

Awwww Yeah….

 

I learned ideas over the years as I built my $38,000 account into over $2,000,000 (although I blew up plenty of accounts before that).

And no matter the market, these are some of my go-to’s.

They’re great to keep in your back pocket when markets are slow or you’re pressed for time.

While they might be simple, those are some of the best ones.

Heck, my infamous TPS Setups only contain three elements!

And the first one is easy to spot, even with the naked eye.

 

The short-squeeze

 

You might have heard me talk about short-squeezes before.

These are explosive moves that cause a cascade of buying pressure.

Here’s how it works.

When a trader shorts a stock, they borrow it on margin from the broker. They make money when the stock goes down.

But if the stock goes higher, they lose money.

When their losses get too great, the broker cuts them off and forces them out of the trade. To close out, they have to buy the stock back.

That pushes prices higher, forcing more to cover, creating a cascading effect.

Now, there are plenty of ways to find the current short-float for companies out there on the internet.

I look for ones near their all-time highs that have a high short-float.

Ideally, I want something over 20%. Even higher is better.

Here’s a good example with Carvana (CVNA).

 

 

I marked the all-time highs at $242.15.

Currently, it’s running a 31% short float.

That means that one out of every three shares available for trading are sold short.

Now, if you were trading this stock and betting it would go down, where might you put your stops?

The all-time highs seem like a good bet.

So, what do you think happens if the stock pushes up and through that level?

A short-squeeze of course!

Now, it may not happen that second or minute. But if you see hourly and daily closes above that price, chances are someone’s going to scream uncle.

All you need to do is watch how these work and then come up with a reasonable entry, stop, and target.

The rest is up to the short-squeeze.

 

Gap and go

 

Sometimes when a stock opens up much higher or lower it keeps going.

Traders refer to these as gap and gos.

I use these in LottoX as part of my 10x trades.

The premise behind them is rather simple.

When a stock gaps higher or lower by a large enough amount, you get panic buying from a few different sources: short-covering, market maker hedging, and FOMO.

What constitutes a large enough move is what takes some practice.

A good example was NIO.

The other day, we saw a gap and go AND a short-squeeze happen at the same time.

 

 

The arrow points to a spot where price jumped higher by nearly 10%.

That forced both market makers to buy the stock to cover call options they sold as well as short-sellers to cover their losses.

How do I know this happened?

Because you see consistent buying all day nearly all three days.

You can see it clearly on the first day as the stock climbed from the open right into the close.

Now, this doesn’t have to happen with stocks gapping higher or ones near their all-time highs.

You can see this occur with gaps down and just large gaps in general.

 

The flag pattern

 

As part of my TPS setup, one of my favorite plays is a chart consolidation pattern known as a ‘flag’ pattern.

People call it this because it looks like a flag.

In fact, there’s one in the NIO chart right above.

 

 

What you’re looking for is a strong move higher in one or as few candles as possible.

You can see this where the blue arrow is next to a large bullish candle.

Then, you want to see price trade in a narrow range going sideways.

When you connecting the tops and bottoms of the candlesticks with trendlines like I’ve done with the blue lines, they should either run parallel or converge on one another.

This tells me that buyers are accumulating shares and it should move higher.

Take a look through different charts and see if you can’t find some.

 

Two trades a week is all you need

 

I’ve watched traders do incredibly well with just a couple of trades a week.

And with so many of us busy during the day, that may be all we have time for.

That’s why I want to give you my best trade ideas for the week with Double Down.

Along with a host of educational content, you get two of my top trade ideas each week to choose from.

These trades cover many of the same techniques I used to turn my $38,000 account into over $2,000,000 and let me continue to trade for a living.

Click here to learn more about Double Down.

Author: Nathan Bear

Although Nathan Bear has made options trades that resulted in over 1,000% profit, he’s “only made a few” he says wryly! Nathan is one of the best options traders there is. Period. His unique approach incorporating his adaptive 3-step “TPS” trading strategy, has so far brought Nate well over $2 million in realized trading profits.

Nate is a down to earth trader who now imparts his simple trading methods and relaxed approach to his trading subscribers to help give them the keys to trading success.

 

I’m about to go against every desire in my body to tell you this…

Trading less can make you a better trader!

But what exactly does it mean to trade less and how can it help you?

That’s what we’re here to discuss today.

Crazy as it sounds, this concept applies to most people I’ve met.

And a big reason I launched my Double Down service.

You see, not everyone can spend all day in front of the charts.

 

Even when I’m not in front of the screens, I’m still in front of the charts!

 

Even I find it difficult sometimes with the responsibilities of four kids, a puppy…you name it.

So you might be surprised to learn that sometimes cutting back on the number of trades I take improves my success.

Part of it is psychology and part of it is math.

What you need to decide is which or both of these apply to you.

 

 

The focused trader

 

While it’s something we value in our culture, human beings aren’t meant to be multi-taskers.

Our brains are wired to filter out noise, allowing us to focus on the task at hand.

When we divide our attention across multiple trades, we increase the chances that of screwing something up.

It can be as mindless as fat-fingering a trade.

More likely, we miss our entries or stops or forget to put them in entirely.

Even one instance where you forget to put in your stop loss can lead to catastrophic losses.

I’m speaking from experience!

Picking prime setups

 

Try this challenge in your head.

Imagine you were limited to three trades per week (something pattern day-trading causes).

How would you pick which trades you go with?

While we should go for the best setups, many of us actually go for the first setups.

When you trade fewer setups, this weird thing happens, especially with newer traders and those with small accounts.

We think there will never be a trade around the corner. If we miss the one in front of us, that’s all there is to life.

It’s one of the reasons my Double Down service can help people.

By giving them two of my best trade ideas per week, subscribers can focus on the trade.

They don’t need to worry about whether another setup will pop up because my job is to get them two per week.

For newer traders, I would go with simpler setups.

While I’m an advocate scaling into and out of trades, basic setups with one entry, stop, and target work just fine.

In fact, they can help you hone in your skills and optimize your setups.

It’s much easier to tweak one entry or exit than it is to with multiple.

 

How much is too much

 

What defines too many trades per week?

The answer is different depending on your situation.

If you’re like me with a family, plus you have a full-time job, then anything more than once a day is probably going to be an issue.

For some folks, once a week is all they need.

I know traders that make a living with one trade a week.

Someday I hope to change my trading around so that I can spend less time in front of the computers!

There are a few guidelines I recommend when deciding how many trades you should max out at per week

  • Don’t have any more than 50% of your trading account in play at one time, even for small accounts.
  • No trade should make up more than 5%-10% of your portfolio. 10% is only for small accounts where 5% isn’t really doable.
  • You need to be able to log your trades in a journal and jot down all relevant information.
  • If you’re limited by pattern-day-trading rules, then three trades per week should always be your max.
  • When you need to execute or manage your trades, you should be able to do so comfortably without feeling rushed.

 

Try starting with three great setups per week

 

I’m going to give you a challenge.

Try limiting yourself to three trades per week on a smaller account or even a paper/simulated one.

See how far you can get just doing that. I bet you’ll be surprised.

And listen, there’s always something to work on. 

That’s why I created my Double Down.

With two of my best trade ideas per week, you’re almost there for the challenge!

I will teach you some of the same skills I used to turn $38,000 into over $2,000,000 in two years.

Click here to learn more about Double Down.

Author: Nathan Bear

Although Nathan Bear has made options trades that resulted in over 1,000% profit, he’s “only made a few” he says wryly! Nathan is one of the best options traders there is. Period. His unique approach incorporating his adaptive 3-step “TPS” trading strategy, has so far brought Nate well over $2 million in realized trading profits.

Nate is a down to earth trader who now imparts his simple trading methods and relaxed approach to his trading subscribers to help give them the keys to trading success.