Why Patience Pays When It Comes To Your Trades

Hey Traders,

FOMO (fear of missing out) is a powerful emotion …

Especially when it comes to trading.

It can feel like there’s always someone out there telling you about how they struck it rich off of one lucky trade …

And it can feel like missing even one opportunity could be the difference between living out your life in luxury, or ending up destitute in the streets.

Okay, I’m obviously exaggerating, but my point is: feeling like you’re missing out on a surefire winner is a powerful, motivating emotion …

But not a good reason to take a trade.

Sometimes the smartest trades we make are the trades we don’t take.

And being patient can literally pay off.

Confirmation Bias

During Licia Leslie’s live event on Thursday, she gave out not one but TWO trade ideas.

However, both of these trades came with a caveat …

Wait for confirmation before you take the trade.

Licia knows that patience pays … and she always waits for solid confirmation before executing her trade ideas.

For example, take a look at one of her “best trades of the year” on Pinterest (Ticker: PINS).

She spotted a bullish engulfing candle form at the bottom of a downtrend on PINS’s chart:

However, she wanted confirmation that PINS was indeed ready to reverse course before trying to trade it, so she needed to see some continued strength out of the stock.

After all, not every candlestick is a true signal … there’s more to it than just spotting a shape on the chart.

The next day … PINS didn’t deliver. The shares moved marginally higher, but it wasn’t enough to show Licia that the trend lower had truly changed.

Licia sat on her hands, but kept an eye on PINS’s chart, not ready to give up just yet …

And on the second day, PINS saw another move higher, and Licia was ready to make her move!

She targeted the July 23 71-strike calls for $1.40, meaning she needed PINS to move above $72.40 within the next two days. (PINS closed at $72.23 on the 21st when Licia took this trade.)

Why buy calls so close to the money, and with so little time left?

Because they give you the most bang for your buck. With only two days until expiration, Licia isn’t paying for time premium she doesn’t need.

Her candlesticks and confirmation system means she’s gunning for gains right now … and she’s not overpaying and taking on unnecessary risk.

And near- and at-the-money options tend to gain and lose value faster than farther in- or out-of-the-money contracts, so when they move, they move.

Just two days later, Licia was able to close out her calls for $3.15 … a 225% gain!

Now, you might be thinking “well, if she had bought her trade when she saw the first candle, she would have done even better!”

You’re right.

I’d like to invite you to Google “trying to time the market” and tell me what you learn.

In all seriousness, you can’t time the market, and you’ll rarely ever make a trade that’s perfectly timed between the top and bottom.

And when you make a move just based off a single indicator, without waiting for confirmation, you’re more likely to end up taking a bad trade than collecting extra profits on a good one.

For example, during Thursday’s live event, Licia let viewers in on a trade she was watching in the SPDR S&P 500 ETF (Ticker: SPY).

She noted that on Wednesday, a “hanging man” candlestick had formed, possibly denoting the top of an uptrend.

Chart courtesy StockCharts

The price action on Thursday looked like potential confirmation that SPY was set to drop …

However, Licia was targeting the December 10 466-strike puts … which expired the very next day.

So rather than taking her trade on Thursday, she waited for true confirmation on Friday.

She needed SPY to open lower and trade lower on Friday, when she would then purchase the December 10 466-strike puts.

And as luck would have it …

Her patience paid off in the form of “money saved” as SPY finished 1% higher on the day.

Being patient, and waiting to be confident about her trades, has resulted in Licia’s account growing by 220% in the last 13 months.

Has she missed some good trades?

Sure.

But she’s also missed some bad ones.

And you can see by her overall gain how that’s been working out for her …

I know as well as anyone that being patient is hard.

I very often am too quick to hop on a trade myself … and I pay the price.

Confirmation that you’re making a good trade is huge … especially when you’re targeting cheap, fast options trades like Licia does.

You can watch Licia go through her system right here (including her favorite candles to trade, and how she finds the best cheap, fast-action trades to make).

Or if you want to try these trades yourself … you can sign up to join her new Option Shopper program right here.

I also invite you to check out (and sign up for!) her free Profits In Pumps newsletter. She still sends out trade ideas on a pretty regular basis, and you’ll be able to see exactly what she’s watching and why.

Remember, folks, always have a trade plan going into a trade (including what you’ll do if it goes according to plan, or if it doesn’t), and never rush a trade you are sure about just because you’ve got a wicked case of FOMO.

The trader that lives to trade another day never loses.

The trader who blows up his account chasing the “next big thing” does lose.

Be patient and trade smart!

Your Only Option,

Mark Sebastian


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