The first half of 2019 is behind us… and I’ve been flexing on these markets to the tune of 300…
…$300K in trading profits (and that’s with me taking a two-month hiatus from trading)
Ahhh… the life of a trader. There are times where it feels nothing is working and others where you feel unstoppable.
The key is to stay humble and be mentally prepared… because these markets will test even the best traders.
How do I keep the right mindset?
Well, it’s a combination of small steps I take… they are easy to follow and have made a world of difference.
One of those steps is reviewing my trades. You see, before I got on this hot streak, I was ice cold. However, by analyzing my trades, I was able to make adjustments and get back on the right path.
How do you get on the right path?
Study winning trades… like the ones I’ve laid out for you in this case study… read on to learn more about it.
A few weeks ago, I posted a catalyst swing trade alert about a renewable energy company… and I was looking to make 20%+ on it… well, I took profits off the table.
Now, if you don’t know how the catalyst swing trades work… I’m looking to hold these stocks for a few weeks (unless my profit targets get hit). With these types of trades, I’m looking for catalyst events (just like one of my former MRM students, Kyle Dennis does).
Basically, I’m looking for reasons that the stock should go up… and of course, I pair it with chart patterns.
For example, here’s a look at the chart in Ocean Power Technologies (OPTT).
Initially, I bought shares at $1.98… there after, just a few days later, I sold some shares at $2.21 for a $700 winner… and of course, I alerted clients about the trade.
Now, some of the catalysts I were looking at included:
– A new feasibility study in The Gulf of Mexico
– Presentation at LD Micro Conference
– New product prototypes
Here’s what I was looking specifically with new product prototypes…
Ocean Power is in the process of developing two new products. One is the anchor-less PowerBuoy that they develop with the government and the other is in collaboration with NEC Energy Solutions to connect their buoy with lithium-ion batteries.
They plan to test the first prototypes of these products this summer. We will be looking for any news on the progress and collaboration around these products in the coming weeks.
If you think about it… what happens when a company develops a new prototype?
Well, typically… they file for a patent.
That’s actually what sent OPTT higher today. The company received a U.S. patent for its Power Take-Off System for use with wave energy conversion buoys.
That cause the stock to gap up all the way to $2.50.
Check out the hourly chart in OPTT.
At a quick glance, do you think you would’ve taken profits on this trade (around 20% from your entry) if you bought?
Maybe you wouldn’t have…
However, what I noticed was the stock went right to the horizontal line shown above – it’s what’s known as a resistance level.
Basically, there are sellers at that level… and not a whole lot of demand, and it would take another positive catalyst to send the stock higher.
Well, when I saw this price action… I actually decided to sell my shares and take the 20% winner.
Was it what I wanted?
A win is a win… but having a bigger gain would’ve been nice… but as you can see, the stock closed just above $2 on the day, and the right thing to do at the time was taking profits.
So what’s the key takeaway with this strategy?
Well, all you really need to do is do a bit of research into the company and look for potential catalysts or fundamental changes in the company… pair that with a chart pattern and an area of value… and develop a trade plan.
Now, if you don’t know where to start, click here to take the first step.
Don’t forget, my good friend Jeff Bishop will be going live this Wednesday, June 26 at 8:30 PM… and I’ll be tuning in to watch as he reveals his options trading strategies – what he calls Total Alpha.