Ep 101: Catching Missed Trading Opportunities and Fast Moves
★ SUMMARY ★
Catching Missed Trading Opportunities and Fast Moves
When you have stocks that have already moved further either to the upside or the downside, and sometimes they move a little too far, too fast, it’s common to feel uncomfortable about getting in those positions at those price levels.
The big thing when it comes to chasing fast moves and missed opportunities is really the fear of missing out. That’s probably the biggest problem that I see with most traders, and this is a huge problem, especially if you’re new.
One of the reasons is that new traders, they really want to make money from this new skill they just learned, which is stock trading, they want to jump into it and say “hey I’m missing out, I should be making more money”, but in reality, you’re still new, you need to learn to walk before you can run.
They try to rush the process, so they try to jump into stocks that are moving a little bit too quick, or already exploded to the upside because they just assume it’s a good idea to get into the position after they’ve missed the move.
What do I personally do in these situations?
Typically for me, the way that I proceed or approach this concept is, if a stock is over extended, if it is beyond its normal range, I do not chase it.
The reason is because I am in a dangerous spot, in this kind of situations the risk is against you because it is very possible that the stock will have an even more massive pullback.
That’s the main problem with these kinds of moves and stocks that are a little bit over extended, because stocks don’t go up forever. They have pullbacks, they come back into other support and resistance levels and the bigger the move to the upside, the bigger the pullback, it’s just a normal cause and effect relationship.
So you want to be very cautious when you’re trading stocks that are moving to the upside and are over extended.
What can you do as a trader to manage the situation?
You have a few options. First, you could wait for a pullback, it will come most of the time. The pullback is going to be relative to the stock price, but basically, most of the time a pullback will happen. So you could wait for that pull back, and then get in at the pullback range.
The other option that you have is to average into your positions slowly. So you could buy a few shares at one price, and then if the stock continues to power higher, you could get in again, and then again, as it moves up a few more points, and then you could take some shares off.
Personally, I’d rather average in as stocks go up, rather than when stocks go down, and that is because a stock that goes down, could go down much lower.
And finally, the other thing you can do is to sell a put option at a price you want to pay. This is a little bit more advanced and difficult if you don’t know much about options trading.
Of course, this has to be done on stocks that sell option contracts. You can’t just do it on any stock; so this is something you need to plan out ahead of time.
Those are the best ways to manage the risk in the market if you missed a trading opportunity or move and the stock is over extended.
Posted at: http://tradersfly.com/2016/09/ep-101-catching-missed-trading-opportunities/
★ SHARE THIS VIDEO ★
★ SUBSCRIBE TO MY YOUTUBE: ★
http://bit.ly/addtradersfly
★ ABOUT TRADERSFLY ★
TradersFly is a place where I enjoy sharing my knowledge and experience about the stock market, trading, and investing.
Stock trading can be a brutal industry especially if you are new. Watch my free educational training videos to avoid making large mistakes and to just continue to get better.
Stock trading and investing is a long journey – it doesn’t happen overnight. If you are interested to share some insight or contribute to the community we’d love to have you subscribe and join us!
FREE 15 DAY TRIAL TO THE CRITICAL CHARTS
— http://bit.ly/charts15
GET THE NEWSLETTER
— http://bit.ly/stocknewsletter
STOCK TRADING COURSES:
— http://tradersfly.com/courses/
STOCK TRADING BOOKS:
— http://tradersfly.com/books/
WEBSITES:
— http://rise2learn.com
— http://criticalcharts.com
— http://investinghelpdesk.com
— http://tradersfly.com
— http://backstageincome.com
— http://sashaevdakov.com
SOCIAL MEDIA:
— http://twitter.com/criticalcharts/
— http://facebook.com/criticalcharts/
MY YOUTUBE CHANNELS:
— TradersFly: http://bit.ly/tradersfly
— BackstageIncome: http://bit.ly/backstageincome
source
I've traded futures, successfully, for 15 years. It doesn't even make sense to "trade" equities. You can't short easily, there are $25K day trade minimums, and you pay almost double the taxes once you learn how to make a living at it.As an investment that pays dividends you might be able to justify stocks, but for "trading" futures are the only way that small account newbies have a real chance at making a middleclass living.
after listening to this one for the 3rd time Sasha, it's coming across more geared towards getting the premium with the put. What about just buying a put option on at the 140 price range in your example and just make the money of the downside of the stock with the put instead of selling one looking for the premium? Or Buy 1 put at 125 the price you like and another one at the 140 range in the example.
and then buy the stock when the price fall below the price that you like? Just throwing my view of it out there, Your thoughts. One problem that I could see a new trader having is not understanding that in order to sell a put they have to own the 100 shares in their account, has to be covered, the cash or the stock. Correct me if I'm wrong at the way I see it.
You are good at what you do Sasha. So blessed to have found you. Turning yourself into a millionaire. Good for you! They say that we need to connect ourselves with people that are doing what you want to do. I have helped me fine tune what I done know and what I do know. Can't wait to see your option videos.
Hello Sasha! If you wanna buy in a pullback or retracement (like the ABCD pattern), do u have any special entry point? for example like the breaking up of a downward trendline of the pullback/retracement? ( As you said, a 50% of pullback is normal, but I suppose We will not usually know how much will the stock pullback/retrace), Thanks 🙂
Thanks again :-). Have a nice weekend!
Well, I belive if you have a software like STT or Equity feed you can defintly catch a runner and get on it. And because your chasing a stock you can just have a way safer stop loss and trail stop it.
Sasha you are such a bear sometimes LOL.
I was watching that move on NAVB and almost jumped on it. But I did get a nice ride on a full point move by MRO.
Solid strategy. Recommended.
Would short an over extended stock knowing that it will pull back?
Good job with the clarification on stock movements. But why is it that anytime I am long a stock it takes a nosedive? It doesn't even matter what stock it's.
how much % do you gain per year?