Rome Wasn’t Built In A Day
At least a dozen times per week I am asked the question, “what should my stop loss be?”. Any idea what question I am never asked? I am NEVER asked “when should I take profits?”, so either everyone is an expert on gains, or there is a mismatch in your trading logic.
Everyone is quick to set a stop loss on a trade. This is how you might think you “manage” a trade, but when the trade starts to go green, what happens? You have no clue what you are doing now - right? You’re just holding on for “big gains”, but no actual plan. You might snap a screenshot if you hit a certain dollar amount, or maybe when you get over 100%, but WHEN THE HELL ARE YOU TAKING YOUR PROFITS???
Most likely answer: At 40 - 60%. But only after you took a screenshot when it was at 110% and then you watched it drop right after. So you then removed your stop loss, because you know it will bounce back up in your head. It doesn’t immediately bounce, you see your gains continue to shrink and you panic sell for less than half of the max you could have had. And then the next 10 minute candle bounces and you could have been up 125%, but your mind lost control, you stopped reading the chart, and only looked at your PnL.
“If it’s good enough to screenshot, it’s good enough to sell”
I know this has happened to many of you. Yes, hitting big trades is super fun, and we do that all the time here. But we can only do that if we focus on building things up brick by brick, and not doing stupid shit. And in order to do that we need to focus on a profit taking strategy as much as a stop loss, so that we have runners that can get those 1,000% gains.
You need to stop the FOMO trading mindset. You need an incremental mindset. Take profits at 20-30% on 80% of your position and let runners run. Your plan can be that simple, but you need a plan for the profits. If you stack up 20-30% daily that is going to add up to a lot more, and faster, than just hitting a few home runs but having a ton of losers all the time as well.
As for the market, VIX was the lowest it has been since February 21st on Friday, and the market couldn’t move over 600. That doesn’t match up logically, so we may just grind up higher in to quarterly OPEX in 2 weeks. Feds are on blackout period with their next FOMC meeting coming up next week, and Donny will be throwing wrenches left and right, so as usual stick to the Stack and your charts.
Focus this week on stacking your bricks, building a solid foundation of profit taking habits. Tonight is jam packed with charts and tons of trade ideas as always. If you aren’t subbed, get in before you miss another incredible week with PRIME!
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My Charts
Over Green line = Entry for Calls
Under Red line = Entry for Puts
Dash/Dot Blue line = Price Targets
Orange Dash/Dot line = POC (Point Of Control)
Purple line = Dark Pool
Blue Boxes = Demand Zones
Red Boxes = Supply Zones
Price targets are not the same as option strikes.
Price targets are where I believe the chart can/will go.
The strikes I suggest are what I think provide the best risk/reward to make money.
Let’s BANK!
BROS
BROS 0.00%↑ daily ascending wedge pattern finding difficult breaking out over this $74 level, but we are going to use that as our line in the sand. A pop over that could be just the type of scenario that I was talking about above - you see a quick 20-30% profit on the board, take that bag off the table! That’s a brick. Conversely, losing $73 which was flipped to support last week will send this lower. Here’s my plan.
Calls over $74.00
75c & 76c on watch
Puts under $73.00
72p & 71p on watch to the downside
GTLB
GTLB 0.00%↑ daily consolidating wedge formation with a rejection of the upper trendline on Friday. We will be watching for a retest, and potential break of the upper trendline here, or to see if we continue to move lower. One thing to note - this does have earnings on Tuesday, so my suggestion would be to either play the run up tomorrow or the fallout after earnings. I would not suggest trading earnings unless you are will to let it go to $0 as can happen with any earnings bet. Here’s the setup.
Calls over $50.50
54c & 55c on watch here
PRIME STYLE: 60c
Puts under $48.75
46p & 45p on watch here
NKE
NKE 0.00%↑ daily consolidating wedge, closed with a doji on Friday so we really just need to see which way this wants to go at open tomorrow. A breakout and this can start hunting that upper gap fill, or we reject under the trendline and flush lower.
Calls over $63.75
64c & 65c on watch here
PRIME STYLE: 6/20 67.5c
Puts under $62.00
61p & 60p on watch
RKLB
RKLB 0.00%↑ daily ascending wedge/bear flag. This one could benefit from the SpaceX Elon/Trump fallout, so it’s worth watching not only this week but in the future as well. Bullish hammer to close out the week off the lower trendline. This might be a mover in the week ahead. Here’s my setup.
Calls over $29.00
30c & 31c on watch here
PRIME STYLE: 6/20 35c
Puts under $28.00
27.5p & 27p on watch
LULU
LULU 0.00%↑ had earnings last week and got hammered on pretty good numbers. The chart says this is a retest of the weekly trendline from this bull flag breakout. If this bounces from the trendline it can be a big mover in a week’s time. Flushing under the trendline is going to send this towards $250. Here’s my plan.
Calls over $268.00
275c & 280c on watch here
PRIME STYLE: 290c
Puts under $264.50
255p & 250p on watch
MRVL
MRVL 0.00%↑ weekly bull flag bouncing from this demand zone. Put in a bullish engulfing candle last week. This could be a major ripper if this breaks out and holds over the trendline. Here’s my thoughts for the week.