Today I’m going to give you two simple ideas to memorize.
If necessary, write them on sticky notes and put them on your monitor. Repeat aloud every day until it’s ingrained in your brain.
Discover How 7 Money Monday Trades Delivered Gains of Over 100%
Table of Contents
The Big Picture
I know you’ve probably heard this first one before, but until you put it into practice, just write it down and keep repeating it.
Winners Hold Winners, Losers Hold Losers
So many people hold weak stocks and faders. They struggle at trading because they refuse to cut losers.
The funny thing is, the same people who are patient as hell when they’re long a stock that’s going lower and lower, can’t sell fast enough when they’re up five cents a share.
I see people every day who are up five cents a share, they sell, and they celebrate. Then the stock goes higher and they say “I did it again…”
Every day I get people asking me at 3:45 p.m. ET about a stock that was a morning mover but has been fading all day…
“Should I hold this?”
If it’s been fading all day, it’s trending down. All you’re doing is begging to increase your losses.
You Know What To Do
If you’re looking to other people for advice on what to do with a losing trade, you may want to read this entire newsletter again.
It makes no difference if it’s me, Tim Sykes, Matt Monaco, or the Pope, okay? If you’re asking the Pope what to do with a losing trade, you already fail.
“Mr. Pope, what should I do with this stock?”
You know what to do. I don’t care if you started three days ago. If you’ve got a loser and it’s fading into the close, you probably should’ve cut it four hours ago.
Want to know what nobody askes me, or Tim Sykes, or Jack Kellogg, or Matt Monaco?
“What do I do with a winner?”
Nobody, and I mean nobody, comes to any of us and says…
“Hey, I’m up 20%. What should I do?”
That leads to the second idea you should write down and memorize:
The Trend Tends To Continue
If you have a stock that’s been downtrending all afternoon, what do the odds say? The odds say it will just keep going down.
I first understood this after reading “Technical Analysis Using Multiple Timeframes” by Brian Shannon. Here’s the first sentence from the chapter titled Trends:
“A trend, once established, is more likely to continue than it is to reverse.”
That holds true for both downtrends and uptrends.
My Take
Now, some will read that and say, “Tim said if I’m up 20% I should hold…”
That is not what I said. I’ll get into this more tomorrow but I’ll give you a hint now.
Once you’re in the trade, all the variables should already be determined. You should’ve made those decisions before the trade. It’s part of your trade plan.
Watchlist
Wetour Robitics Limited (NASDAQ: WETO) announced a 1-for-100 reverse split on July 29, turning it into a highly volatile micro-float. That led to a short squeeze from $4 to over $53 in mid-August:
WETO, 1-month, daily candles, short squeeze
As it continued downtrending last week, WETO found temporary support near $15, which turned into resistance:
WETO, 5-day, 30-min candles, support becomes resistance, basing becomes support
You can see on the chart above that WETO started basing around $7 on Friday (August 28).
Yesterday (August 31) WETO traded right near the pivot at $7.08 in premarket, then hit the Oracle signal at $7.48 within 5-minutes of the open.
WETO, 8/31/26, Oracle hit, high potential winner
As I write WETO is trading sideways. Watch for a potential continuation day today or day-three surge tomorrow.
On My Radar
- Pheromone-maxxing? When I was young we called ‘em hippies
- We’ve seen this before: war back on, oil is up, and indexes went down
- “Trend Following” by Michael Covel is a must read for every trader
- Get Tim Sykes’ after-hours Night Tape watchlist (it’s free)