Stop Chasing!

Over the past several weeks, I’ve noticed something that’s bothering me quite a bit…

Many of you are chasing my alerts without properly preparing for the trade.

This is such a problem that I decided to send out my most recent trade as a non-official “idea.”

Clearly, we need to brush up on the perils of chasing and why every Evolver should avoid it.

Keep reading and I’ll show you what I mean…

Are You Chasing?

First of all, what is chasing?

To me, if a stock has three or four green days in a row without consolidation and you enter a long trade, that’s chasing. 

When I send out my alerts, I often remind subscribers to not chase. I ALWAYS want to share my trades with students, but alerting plays can be a delicate balancing act…

As a trader, chasing a volatile stock is extremely risky, especially after it’s already moved significantly in a particular direction. 

Getting a bad entry can ruin any chance of making a profit. Worse, it can lead to a loss.

Remember: Being early (or late) on a trade is the same as being wrong.

Think about chasing from the perspective of an options trader. One example would be buying a call option into a big spike — or a put option into a big drop — that hasn’t shown any real consolidation. 

If you aren’t careful, you could find yourself chasing the play because other traders are talking about the setup. 

In other words, it won’t be your hard work and preparation leading to the trade — it’ll be FOMO.

Chasing hyped-up plays is a recipe for DISASTER that you should avoid at all costs.

By entering a trade without taking into consideration the possibility of a price reversal, it exposes you to unnecessary risk. And that can end with a big loss.

So what can you do to avoid this negative exposure?

The Problems with Chasing Trade Alerts

The problem with chasing is twofold.

First, you never know if the trader (or position) you’re chasing is actually right or not.

Second, you can’t guarantee that said trade will fit your personality, strategy, and risk tolerance.

Think about this…

Had you blindly followed my trade alerts in May, 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 trade 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, if you want to set yourself up for long-term, individual success … don’t chase!

Now, before we go, I want to tell you about a VERY EXCITING event happening TOMORROW…

IMPORTANT ANNOUNCEMENT: A Special Live Broadcast with Rob Booker and Jeff Zananiri!

Wednesday’s Fed policy meeting will create a MASSIVE opportunity for traders.  

That’s why on Tuesday, September 19 at 11:45 am Eastern, Rob Booker and Wall Street legend Jeff Zananiri are inviting a limited audience to watch them discuss how they’ll be capitalizing on this pivotal moment for the stock market.

You see, most retail traders approach major catalysts all wrong…

But Rob and Jeff will be showing you how the pros use deliberate timing to take advantage of the kinds of irrational price moves surrounding this historic meeting.

DO NOT miss this time-critical, invitation-only live event…

Space is limited. Click here to reserve your spot BEFORE it’s too late!