One mistake traders make is they don’t trade enough when they should, and they trade too much when they shouldn’t.
What does that mean?
Well, famous trader Jesse Livermore has a quote that goes like this…
“There is a time to go long, a time to go short, and a time to go fishing.”
That means when the market gives you the opportunities, you’ve gotta be there to capitalize. And when there are no good setups or opportunities, it might be time to go fishing.
But there’s another side to this quote…
When you trade or don’t trade isn’t just about the market … There’s another thing you must consider.
So when should you trade more and when should you trade less? It might be the opposite of what you think…
What To Consider Before Trading Aggressively
In my morning SteadyTrade Team webinar yesterday, a lot of traders were excited about Jasper Therapeutics, Inc. (NASDAQ: JSPR) after it broke the premarket high and $1 mark before the market opened.
But the stock was a chat pump. So what’s my rule?
Wait for 9:45 a.m. or later.
Once I said that I knew exactly what the next question was that I was going to get…
When is it okay to relax the 9:45 a.m. rule?
It comes down to each individual trader. The stock checked the boxes…
- It’s a beaten-down biotech stock. (These have been hot, think KALA, PALI, HOTH.)
- It has a low float for a true penny stock.
- It passed the $1 mark which is a critical point for penny stocks.
- The company dropped an 8 a.m. press release.
That’s why I made it my number one pick and premarket email alert.
But before you break a trading rule, trade in premarket, or get too aggressive, ask yourself how YOU have been trading lately.
Not enough traders consider their own emotions and performance. They’re too focused on the ticker, the volume, the pattern, the money…
Then when they hit a rough patch and are struggling, they do the opposite of what they should be doing.
We’ve all been there. Heck, I was there myself in the beginning…
I’d have losing trade after losing trade … So I’d start trading more setups … Taking bigger-sized positions.
And before I knew it, I’d have six positions in premarket — one in penny stocks, one in large caps, ETFs, options, you name it…
But that’s exactly what you have to avoid when you’re not trading well.
What you should be doing if you had a terrible trading week is focus on one stock and one setup every day.
Try not to do too much except build consistency with small gains. (As my mentor Tim Sykes says, small gains add up!)
And when you’re lighting it up and on a hot streak, that’s when you can be more aggressive, break rules when you think it’s appropriate, and increase your size if you’re ready.
If you need help focusing on the best potential trade every day, sign up for my Daily Market Profit Alerts.
I deliver the hottest potential stock to your inbox in premarket, including my trading plan of where to enter, risk, and take profits.
Subscribers got alerted to JSPR in premarket yesterday with a buy signal at $1.10 — the stock went to $3.80!
Stay focused out there. And don’t miss my next alert.
Have a great day everyone! See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade
P.S. Yesterday, I also alerted traders to 180 Life Sciences Corp. (NASDAQ: ATNF) with a signal entry at $4.51 — the stock hit $5.98! Sign up for DMP alerts to get the next one now!