I love to use quotes, analogies, and stories to describe trading mindsets and psychology…
One quote I use a lot is from Mike Tyson:
“Everyone has a plan until they get punched in the mouth.”
It helps explain a very underrated skill in the trading game, which I’ll get to in a second…
In the meantime, something is coming that will definitely pack a major punch.
Nvidia’s CEO, Jensen Huang, is about to trigger a game-changing event.
Nothing will be the same after this…
Fortunately, my colleague and legendary trader, Tim Sykes, has a handle on it and knows exactly what you need to do BEFORE this happens.
Find out in his video below…
Today, I will show you how to dodge one of Iron Mike’s biggest fears…
But in trading.
Table of Contents
Ever Sold Too Soon? Or Held Too Long?
We’ve all been there. You sell a stock… and then it rockets higher.
Or worse, you hold it too long, watch your gains evaporate, and what was a nice, profitable trade turns red.
I’ve made that mistake more times than I can count…turning a winner into a loser because I didn’t stick to my plan.
Taking profits isn’t just about growing your account. It’s about protecting your mindset.
Nothing messes with your head more than being up $1,000 and then watching it go to zero.
Greed Is the Silent Account Killer
Let’s say you’re up big on a trade in the morning…
The stock’s flying, volume’s strong, everything is lining up. You’re thinking, “What if I double this?”
And of course, that’s when the greed monster shows up.
Then the volume fades, price action stalls out, and now your $1,000 gain slips to $900… $700… $400… and suddenly you’re red.
It’s painful, but it’s also preventable, as long as you have a plan.
Always Have a Trading Plan
You should know these three things before you enter:
- Where you plan to take gains;
- What you’ll do if volume fades or price breaks down;
- And when to move on if the trade isn’t working anymore.
Don’t worry, you can aim for bigger gains, but the stock has to earn it.
If it’s trending strong, above VWAP, and volume’s building, great. Continue to ride the upward movement…
But when the momentum shifts, you need to recognize it and adapt.
Adapt or Get Left Behind
Say you set a $1.50 per share goal on a stock you bought at $1, setting a stop-loss at $0.90, and it’s moving well.
Now it’s at $1.20 and then $1.30…
But suddenly, momentum slows and volume dries up…
Do you hold out for $1.50 no matter what?
Nope. That’s how you turn a potential win into a regret…
You’ve got to read the action in real time. Watch the chart, use your eyes, and be flexible.
Here’s where Tyson’s quote makes sense…
Being flexible is key. If you’re not, prepare to get punched in the mouth.
Use Trailing Stops and Scale Out
Trailing stops can work beautifully if you’re in a slower-moving, higher-priced stock.
But with volatile penny stocks, be careful! They can pull back fast and shake you out early.
A better move, especially with larger positions, is to scale out.
Take some profit at $1.20, and then maybe some more at $1.30. This method locks in gains, lowers your position size, and reduces stress.
And with a smaller account, the smart move might be to fully exit the trade and move on.
Always Have Your Eyes on Real-Time Price Action
Don’t just “buy and hope.”
Use technical indicators, and you don’t need too many…
Read my blog post to learn more about them and how to use them.
You should be watching all the action as it unfolds.
And speaking of price action, Mondays are where it’s at!
I recently discovered a rare trading pattern that I call the Monday setup.
These trades only show up on that day and can move fast!
We’re talking about moves that can deliver more in one morning than most people see in a month!
And right now we’re offering the Monday setup for just $7!
That’s an 85% discount off the regular price.
But this special offer is only available for a limited time…
So, check out the Monday setup ASAP in my video tutorial below.
My Final Thoughts…
Profit targets aren’t hard rules, but never hold on to a trade with a “no matter what” attitude..
The bottom line is that you need to think ahead. Have a trading plan and be ready to adapt to the price action.
Because in this game, it’s not just about how much you make…
It’s about how you protect it.
Have a great day, everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade
P.S.
I talked about scaling out of a trade. But do you know how and when to scale in?
Check out my blog post to learn more about price targets, particularly for penny stocks.
I’ve been trading for a long time. Here’s one of my best strategies, and it might surprise you.