≈ A bird in the hand. 🐦 ≈
The fourth tip from the Bear Market Playbook is to Scale Out.
Another way of saying it is to take partial profits. Did you know that the largest up days don’t occur in uptrends? They occur in downtrends. It’s a byproduct of a volatile market that sees big swings in both directions.
With such a wicked market backdrop, gains today could be gone tomorrow. What’s the old hunter saying? A bird in the hand is worth two in the bush. This applies to trading in bear markets. Follow-through is usually lacking, and up days are often followed by down days and vice versa. Thus, ringing the register when you have profits is wise.
But here’s where the compromise comes in. You’re only closing part of your position while letting the other half ride. If the stock keeps moving in the right direction, you’ll capture more gains. And if it doesn’t, well, at least you took profits on part of the trade. Scaling out creates a psychological win-win. Instead of having one chance to pick the top, you have two, or maybe even three if you scale out in thirds.
Chart of the Day: Nasdaq Breaks the 50-day
The Nasdaq breached the 50-day moving average on Wednesday, reflecting continued weakness in growth stocks. What, you thought the money flooding into financials, energy, and basic materials fell from the sky? Nope. It appears it rotated out of growth.
Video of the day: Jedi Options: Understanding the ATR Buffer feature of the Theta Research Tool (Trade Journal)
In today’s Jedi Options, Coach Tyler teaches how to interpret the ATR Buffer feature on Tackle’s Theta Research Tool (Trade Journal).
Today’s Line up
Traders Lounge 11AM EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
Cashflow Club 8:30 PM EST
Held every Thursday before Friday’s option contract expirations, this show helps you perfect your favorite cashflow strategies.
Halftime Report 12:30 PM EST
The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day, and fun in a way that only Matt and Tim can deliver.
Trading Justice 458: Tackle 25 Covered Calls List (2022 Edition)
Each year, Tackle Trading releases its top 25 stocks with strong fundamental and technical criteria, that are also great option trading candidates for strategies like Covered Calls and Naked Puts. There are 4 lists in total:
- Tackle 25
- Dividend Fireworks
- Poor Boy’s Covered Calls
- Dirty Sexy Money
Listen in to our feature presentation to learn about these lists, their creation, the process of how they are built, and how to use them in your trading and investing.
Listen to the episode in the player below:
Financial freedom is a journey
Sign up now and gain unfettered access to all of the quality content and powerful Scouting Reports that our Pro Members enjoy for 15-days absolutely free with no strings attached and let us show you what your trading has been missing.
Tackle Trading LLC (“Tackle Trading”) is providing this website and any related materials, including newsletters, blog posts, videos, social media postings and any other communications (collectively, the “Materials”) on an “as-is” basis. This means that although Tackle Trading strives to make the information accurate, thorough and current, neither Tackle Trading nor the author(s) of the Materials or the moderators guarantee or warrant the Materials or accept liability for any damage, loss or expense arising from the use of the Materials, whether based in tort, contract, or otherwise. Tackle Trading is providing the Materials for educational purposes only. We are not providing legal, accounting, or financial advisory services, and this is not a solicitation or recommendation to buy or sell any stocks, options, or other financial instruments or investments. Examples that address specific assets, stocks, options or other financial instrument transactions are for illustrative purposes only and are not intended to represent specific trades or transactions that we have conducted. In fact, for the purpose of illustration, we may use examples that are different from or contrary to transactions we have conducted or positions we hold. Furthermore, this website and any information or training herein are not intended as a solicitation for any future relationship, business or otherwise, between the users and the moderators. No express or implied warranties are being made with respect to these services and products. By using the Materials, each user agrees to indemnify and hold Tackle Trading harmless from all losses, expenses and costs, including reasonable attorneys’ fees, arising out of or resulting from user’s use of the Materials. In no event shall Tackle Trading or the author(s) or moderators be liable for any direct, special, consequential or incidental damages arising out of or related to the Materials. If this limitation on damages is not enforceable in some states, the total amount of Tackle Trading’s liability to the user or others shall not exceed the amount paid by the user for such Materials.
All investing and trading in the securities market involves a high degree of risk. Any decisions to place trades in the financial markets, including trading in stocks, options or other financial instruments, is a personal decision that should only be made after conducting thorough independent research, including a personal risk and financial assessment, and prior consultation with the user’s investment, legal, tax and accounting advisers, to determine whether such trading or investment is appropriate for that user.