We had an incredible trading day in the Daily Income Trader room on Wednesday.
You might not think so when you see one of the trades I’m about to share…
But today I’m giving you a lesson on risk management and win rate.
And if you’re a new trader who thinks a 100% win rate is possible — I’m going to blow your mind!
We don’t strive for perfection in trading. We manage our wins and losses so that we come out as winners over time.
Let me demonstrate these two trade ideas and show you how to become a better trader…
If you’re struggling with your trading, maybe AI can help … See the patent-pending AI-powered trading system that Tim Sykes is revealing here!
Two Trade Examples That Can Help You With Your Win Rate
When I say we had a great trading day on Wednesday, I mean it was a great example of risk management and finding the best trades…
Cardio Diagnostics Holdings, Inc. (NASDAQ: CDIO) was my number one morning trade idea.
I gave a trade plan with an entry of $1.66, a target of $2, and a stop loss of $1.50.
The stock hit my entry signal but didn’t hit my goal. Then it quickly slammed down and hit the stop.
So you potentially lost 16 cents per share if you took that trade.
CDIO chart: 1-day, 1-minute candle — courtesy of StocksToTrade.com
If you’re not experienced in taking losses or think that every trade should be a winner, you might be mad about that loss…
You might even bash my trade idea because it didn’t work.
But losses are part of trading. And that 16 cents per share loss is tiny compared to the potential upside in a winning penny stock trade.
So fast forward to that afternoon…
We regrouped in chat and on my live noon webinar.
I was kind of fishing for a Daily Double Down idea, and then a bunch of members asked about Tenon Medical, Inc. (NASDAQ: TNON).
So I mapped out the Oracle levels and looked at the volume.
I dissected what the stock had been doing the last few days…
I noted it was a chat pump survivor, it had float rotation, and a gap to fill on the chart. Then I mapped out an absolutely beautiful trading plan.
At 12:07 p.m. Eastern, I gave traders an entry signal of $3.12, a goal of $3.89 which was the next major Oracle resistance level, and a stop loss of $2.85 which would be a fail below a major support level.
This trade idea ended up working and blowing past my goal.
It soared to a high of $4.70 which means it offered $1.58 per share of upside from my signal entry. Compare that to the small loss of 16 cents per share in CDIO.
Even if you traded my plan exactly, TNON offered 77 cents of upside compared to the 16 cents per share of downside in CDIO.
TNON chart: 1-day, 1-minute candle — courtesy of StocksToTrade.com
That trading in a nutshell…
You won’t win 100% of the time. Some trades will be losers and some trade ideas won’t even hit the entry signal. That’s okay, it just saves you from a potential losing trade.
The lesson is that risk management and keeping your winning trades bigger than your losers are key to growing your account over time.
I can help you with my trade ideas every morning and afternoon…
I send a detailed trade plan to your inbox every morning, the list of stocks on Oracle and the long and short signals.
Plus, I go live at noon every day to give you my top afternoon trade idea.
Join me in Daily Market Profits today to get my alerts, and I’ll see you at noon!
If you want my trade ideas, plus the tools I use every day that help me make my trade plans — attend a free webinar to see how they can help you become a self-sufficient trader.
Have a great day everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade