Someone recently told me to be careful about mixing testosterone with trading. What’s up with that advice?
I’ll get into that in a bit and also tell you about the new candy-orange four-wheeled beast parked in my garage…
And, of course, I’ll share a few lessons on how you can find multiple great trade entries in a very common chart setup.
All that and more. Welcome to the latest edition of Bohen’s Take.
Read on, friends…
Table of Contents
What’s the Haps
Gang, I have to tell you all about the slick new ride I have.
It’s a beautiful, sweet candy orange, turns on a dime, and I’m happy to cruise around on it all day…
No, it’s not a Lambo or a Ferrari … It’s not even a Toyota.
It’s my sweet new Kubota riding lawn mower!
I’m so excited to use this thing, I’m frantically re-turfing the entire lawn around our house.
Check out the progress. Not too shabby, right?
Apart from geeking out with my landscaping shenanigans, we recently had a great guest on the SteadyTrade podcast.
Her name is Kim Ann Curtin and she’s known as The Wall Street Coach.
She’s coached top finance executives, including top traders on how to achieve top performance and get the most out of life … My kind of topic!
My co-host Stephen Johnson and I had a great discussion with Kim. We spoke about things like how our egos play into trading, the effects of negative self-talk, and even the downside of having too much testosterone when you trade.
Stephen and I chatted after the show, and we both agree that this podcast is one of the most interesting and fun ones we’ve ever produced.
So, if you haven’t seen it yet, make sure to check it out here.
Now, on the market front, we’re seeing a lot of volatility related to the trade war. And with volatility comes trading opportunities. We’re starting to see that in rare earth metal stocks.
Rare earth metals are a key component for making smartphones and computers. China produces most of them and they recently threatened to stop selling them to American companies. That’s bullish for rare earth companies — keep an eye on that trend!
My Most Exciting Trade Setup
For this edition, we’ve got a great supernova stock that comes with a few lessons…
Not familiar with the supernova pattern? It’s when a stock rockets up in price, often due to a juicy news catalyst, before collapsing in a similarly spectacular fashion.
The stock I’m talking about is Eltek Ltd (NASDAQ: ELTK), a small circuit board manufacturer based in Israel.
Eltek Ltd. (NASDAQ: ELTK) showing a Supernova pattern (Source: StocksToTrade)
ELTK announced a quarter-one profit on May 29, causing the stock price to rocket over 300% to $7 in a single day. Just remember: past performance does not guarantee future results, so remember to watch these patterns carefully.
Lesson #1: Watching for news catalysts can alert you to these stocks that make these sudden, high-velocity moves before they make the move.
It’s not always easy to get onboard these monster movers on day one. Everything moves fast, and it’s hard to chart a stock that’s moving into new territory.
But with the right skills and perspective, you can learn to find great trade setups on the following days. I’d even argue that day two of the move provided a juicier setup…
We saw the stock gap down on the open the next day at around $6. It didn’t stay there too long — it quickly retook the previous day’s high. That provided a pretty clear and simple second-day trade setup.
The ease of breaking the previous key high meant buyers were excited and piling into the stock. We also had a logical range to place a stop loss, below the previous day’s close.
Lesson #2: The second and third days of the move, while often not as spectacular, can be much easier for charting and finding logical trade-management levels.
The stock went on a solid run for the day, hitting a high of $11.56 before beginning the decline we see in supernova stocks. That’s why it’s almost always a good idea to sell into the strength of a sudden major move — it often quickly comes to an end.
That was an almost $3 move above the previous day’s high … All in a single trading session, all from a simple dip-and-rip trade setup. Awesome for building up a small account!
I love these kinds of setups. And you can absolutely learn more about them. Watch me hunt for them each trading day — join me in the StocksToTrade Pro chatroom.
StocksToTrade Feature of the Week: ELTK
A great habit to get into, whether you’re a newbie or veteran trader, is to keep interesting stock charts and setups to review in the future.
I used to do this when I ran a web hosting company. Sometimes I’d see an interesting trade setup in the morning, but I’d have to soon step away from the screens for work commitments. So I’d often screenshot the stock chart and review what happened when I got back to my desk.
This was a great exercise in learning to anticipate a stock price’s next move. It was actually pretty fun too. I was saving charts almost every freakin’ day.
That’s why I love this week’s StocksToTrade feature so much: the ability to quickly and easily export charts.
With just the click of a button, you can save an image file of a stock, then come back and review it later. In the ‘old’ days before StocksToTrade, I’d have to use a clunky screen-capture program, misclick a bunch of times, then find the right folder, name the file … it was a massive headache.
That’s why we made it so easy to save and export charts with StocksToTrade. We’re the platform made FOR traders BY traders. See for yourself just how awesome this trading platform is. Get your 14-day trial for just $7 today!
What Am I Reading Right Now?
As I write this update, I’m eagerly anticipating the delivery of the book written by our recent SteadyTrade podcast guest Kim Ann Curtin.
The book is called “Transforming Wall Street: A Conscious Path for a New Future.”
The book includes interviews with 50 Wall Street pros and discusses things like the ethics of capitalism and Wall Street. Not to mention, it’s got one heck of a bibliography!
Kim was a very interesting guest on the podcast, so I’m sure the book is going to be great.
I’ll look to do a further breakdown of the book, so be sure to follow my regular updates.
The Wrap
That’s it for this update…
I hope I didn’t make you too jealous with my awesome new ride-on mower.
And if you haven’t yet, I highly recommend you listen to our podcast with Kim. It’s one of the best episodes yet! Check it out here.
And I hope you found a meaningful lesson in the ELTK trade setup.
A lot of traders think that if they don’t get in on the initial wave, it’s game over. But the lessons above show that with a little lateral thinking you can find even better trade setups on the following days.
We’re always hunting for those setups in StocksToTrade Pro. Join us in the hunt!
I have thousands of chart screenshots from over the years … Am I crazy? Do you do the same? If so, how many do you have saved? I’d love to know, share your comments below!