Hola Rookie Traders!
Last week we went hunting for a new type of trade and we were successful in finding a trade. That part of the hunt can be daunting for some and super simple for others. It has been my experience that there is a direct correlation between the amount of experience one has at looking at charts and the ease with which to find a trade. Finding a successful trade can be something else altogether. That requires patience, persistence, and knowledge to recognize the pitfalls from the juicy setups. I think the biggest issue for new traders is the persistence part. There is a saying in real estate that goes something like this, a real estate investor needs to look at 100 houses before putting offers on 10, before finding a closeable deal on 1. This goes for traders as well, you may have to look at hundreds of charts before finding a few good candidates to run the numbers on before entering that one good trade. Some folks may think this is a big task but the more experience you gain and the more work you do the easiest this task becomes. Its a matter of making some quality watchlists and doing some well thought out scans that will bring you to the trades you are searching for. Also, a stellar resource for trades is the scouting reports that are put out for the pro members each week. These awesome reports can do some of the legwork for you.
This past week we found another gem of a trade and we tried out another type of trade that can work well in low volatility environments and with smaller accounts. We got the trade idea from last weeks stock report and it did what we wanted it to do. We did a bull call spread on MRK in the expectation that is would play out its bullish retracement pattern. It did just that and now we have to look at the trade and make a decision on what to do next? We are in a small profit position and we could take the profit or we could play it out in a number of different ways.
Check out the video below and see which way to play it makes the most sense to the specific type of trader you are!
Happy Trading!!
Happy Trading!
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