Mindset For A $3.7 Million Trade

2020-08-19

When you have a horse that’s running well, hang on for the ride.

John Carter, founder of Simpler Trading, found himself in that situation last week.

The setup began on Wednesday, Aug. 12, when TSLA had a 5:1 stock split.

John was nowhere near a computer, and could only watch as the ticker ripped higher.

By the time John was able to execute a move the way he trades, it was Thursday morning. The daily chart squeeze was hooking higher.

John was in with 15% of his account, looking for new all-time highs. His normal position sizing is 5% or less, but again, TSLA was setting up like the last two $1 million runs John caught earlier this year.

Thursday was iffy whether the move would pan out. Friday the stock rocketed early, then appeared to go south before buying increased late in the day. The stock settled higher at close.

Holding over the weekend on any trade in this wild market can be nerve racking. Emotions and doubt, even for John, can take a toll.

Mindset came into play here. John’s decades of experience and multi-million dollar trade successes guided him to stay in the trade.

All the signals he uses every day pointed him to one conclusion: “If I’m not willing to hold this, then I’m not a trader.”

The only thing to do was enjoy the weekend.

Any downgrade to open the week would wipe out the move.

Monday morning saw John’s computer trading platform down. No eyes on the trade.

Then again, John believes the best way to make money trading is to get in a good position and then do absolutely nothing. Sit on your hands. Ride the horse, he says.

Monday’s action in the stock unfolded with perfection. Lots of volume and no stress.

No reason to sell now. Hold into Tuesday.

Or, was there?

The trade was sitting at $2 million in profit if he were to take the money and go home.

No, he’d ride the horse. This ticker had the legs to keep running. So… hold.

Sleep was tough Monday night.

Traders questioned why he didn’t take the profits. His son asked, “What if it tanks in the morning?”

Tuesday with TSLA started off bright and promising.

Hold… even through Friday?

Wait… the stock is skyrocketing. Computer trading software is still down.

What if it reverses and there’s no way out?

The risk, at this point, wasn’t worth it. John knew his positioning, and the profits were already realized beyond expectations.

No need to hold further and risk it all.

Trade closed.

Booked into the account another $3.7 million.

How did John celebrate?

Made a free video explaining the ins and outs of the trade for the Simpler Trading community.

Shared with his family. They were excited, to say the least.

Next step for John after the biggest trade of his career?

This ride was a lot of fun, he said Wednesday, and it’s time for the next trade.

“It’s all about recognizing the opportunities that are there and not hesitating and taking advantage of them,” John said.

He already spotted another possible squeeze setting up in… yep, TSLA.

If you want the day-by-day details of John’s next trades, join him in Options Gold.

We Saw: major indexes pulling back for the day — 

  • Recap of Fed meeting affecting markets
  • Apple setting $2 trillion market cap milestone
  • Continued concerns, doubts about Covid-19 recovery

We’re Watching: for continued strength and rally —

  • John’s next big setup to the upside
  • What the Fibonacci levels will reveal, compared to February
  • Setups in: NVDA, TSLA, AAPL, AMZN, MSFT, SPX