I work hard to help Evolvers make the most of my trade alerts…
Sometimes I’ll send out an alert before I even enter the trade. I do so to allow everyone more time to research and set their own entries if the trade suits them.
But recently, as my trading has been less-than-stellar (to say the least), I’m increasingly concerned about students chasing my alerts…
Listen, every Evolver needs to hear this…
You should NEVER blindly chase my plays or solely rely on any alert service.
That’s not how you become a self-sufficient trader … it’s a recipe for disaster!
So, how can you use my trade alerts productively, without chasing?!
Keep reading and I’ll show you…
The Problems with Chasing Trade Alerts
Had you blindly followed my last few trade alerts, you would’ve taken several losses in a row (like I did)…
But there’s an easy way for Evolvers to avoid this…
The key is to marry my alerts with your own strategy. Only follow my plays when you’ve done your own due diligence and agree with my thesis.
Then, if the play goes against you, you’ll know exactly what went wrong instead of wondering what I was thinking…
Having students chase my alerts is a real concern of mine, especially when I’m not trading my best.
Due to technical challenges beyond anyone’s control, alerts may not get to subscribers as fast as we’d all like. That leads to the possibility of either entering a trade too late or flat-out chasing.
Additionally, sending alerts gives some students the notion that they can be lazy and simply copy my trades.
But copying another trader’s strategy will never give you the opportunity to create an actual edge for yourself.
To truly crush the markets, you must find what works for you. What works for me is almost entirely irrelevant to your individual goals.
On the other hand, I’m not gonna stop sending alerts. They can be a great teaching tool when used correctly.
My goal is to help students understand my thought process when entering trades, while potentially making real profits.
How to Use Alerts Without Chasing
Here are a few steps to take when checking my alerts to make sure you’re not blindly chasing…
Know Your Risk/Reward for Every Trade
Optimize your risk/reward for every single trade.
If you want to enter a trade I’ve alerted after the stock makes a significant move, don’t enter it blindly.
Wait for a bounce (or dip) and avoid giving in to FOMO.
Avoid entering trades I’ve alerted 30 minutes or more after I’ve sent the email … the ideal entry has already passed you by.
Many traders get stopped out of trades with losses because they didn’t get in at a good risk/reward level.
Wait for the stock to settle back, then look for an entry at a key price level.
If you get one of my alerts and feel like the setup works for you, try to get in as close to my entry price as possible.
Always do your homework. Make sure every trade you put on fits your specific strategy, account size, and risk tolerance.
My entries aren’t perfect (especially recently), but I try to get in at key areas.
If you’re paying more than 10% of my entry, your risk/reward may not be great…
What to Do if You Miss the Entry
If you miss an initial move entirely, wait for pullbacks for other potential entries.
Often, you’ll spot other opportunities if you’re patient and keep a close watch.
One way to potentially avoid bad entries is sending limit orders.
If you use market orders, you’re just asking for trouble. This is especially true in the options market, where contract prices can move multiple % in seconds.
Limit orders are far more conservative and well-suited to options traders because they can give you more control over where you enter the position.
Also, it’s a good idea to take smaller positions after missing significant moves. In those cases, I only put in a third of my normal position size.
Important Points to Remember About Alerts
- The key to any good trade is maintaining good risk/reward.
- Never chase alerts and always do your due diligence. Look at key support levels for entries.
- If one of my alerts suits your criteria but you’d pay more than 10% of my entry to get in, or it’s more than 30 minutes after my initial alert … exercise patience. Wait for a pullback or move on.
- Use limit orders to help you manage your risk and get the entry price you want.
- If you miss the initial move, decrease your position size or pass on the play entirely.
My goal for this service is to help train students to never need alerts to profit from trading options.
That said, I want Evolvers to make the most of my trade alerts. So I work extra hard to give you information you can use.
In the end, it’s up to you to learn all you can from alerts and webinars and manage your risk.
But, whatever you do … don’t chase!