One of the hardest – if not the absolutely most difficult – trading discipline rule to abide by is:
Stick to your trading plan.
You will be challenged with this often.
The stock hasn’t gone your way …
You’re beginning to lose money on your trade …
Suddenly, you are at that price you said you were going to exit and take your losses.
But you are watching the stock chart; maybe there is something there …
Maybe one more day.
It could bounce.
What’s another nickel?
There’s still a week left.
The stock is going to close that gap and then bounce back.
Would I buy these here for a cheap shot?
It’s only $.20 now …
And, of course, you are being tortured the whole time.
When the stock gap opens lower (or higher), there’s not much you can do there.
If you can limit the number of times you find yourself in this predicament, the better trader you will become and the bigger your account will grow.
Maybe it’s not a New Year's Resolution exactly, but something we all need to master.
The Last Trades Ideas of 2021
In my previous letter, I talked about the SPDR S&P 500 (Ticker: SPY) opening and trading lower.
But that’s ok; no trade made, no money lost.
Check out the SPY chart now:
We could open and trade lower today.
I will be looking at the Jan. 07 puts:
If SPY opens and trades lower, will pay around $1.20 for the Jan. 07 475/470 put spread.
Follow the Speaker
After hearing about Nancy Pelosi and her husband buying calls in Roblox (Ticker: RBLX) – they are fantastic traders, you know – I took a peak at the chart:
RBLX is sitting right at a support level.
Also, Wednesday’s candle looks like a hammer and yesterday’s candle looks bullish engulfing.
I believe RBLX could trade higher from here, possibly back to $109 or even $116.
I hope you have a very Happy New Year!
Thanks for Reading … See You Next Year!