Greed will kill you in this world.
The market doesn’t care that you think a stock is going to the moon.
Diamond hands, never sell.
That is a one-way ticket to losing everything you put into a stock.
It’s gambling to the highest degree because when do you sell?
If the stock goes from $10 to $100, that’s not enough for diamond hands.
Because the media, Redditors, and bankers are coming out and telling you that it’ll go to $300.
If it goes to $150, they’ll look to the next standard deviation higher and say it’ll go to $200.
When your family starts talking about a stock especially, you sell it immediately.
Hey, did you hear that GameStop is going to the moon?
You can still make trades on the way up like we do every day in the Warlock Room.
But if you’re in it for the long haul, and if this is a momentum stock especially…
You need to jump ship and look for the next opportunity.
There will be plenty of more opportunities down the line, don’t you worry about that.
Every earnings season gives us a new opportunity to capitalize on a new, hot stock.
And in between we’ll see random stocks that pop off.
Reasons of course for popping off include insider trading, meme stock fervor, FDA drug approval, a random article online gaining traction, a catastrophic global event…
And of course, seemingly no reason whatsoever.
A stock that craters 90% overnight from $300 to $5 can shoot up 100% next day from $5 to $10.
Using the VWAP and our scanners we can track these movements.
But again, we can’t get greedy and try and sell at the very top.
No one knows when the market will decide to start selling off on a stock.
If the broad market is selling off, a single stock can be up 50%.
Diamond hands is a lie told to the every day trade, as it makes you play stocks like you’re at the casino.
For every person that makes a killing on an option trade for a stock, there’s 40 others that lose everything they put in because they held too long.
You need to keep your values intact, keep your head on straight, and stick to what works.
Take your profits.
Sell into the move up a little at a time. Raise your stops. Cover your position.
Because eventually, volume is going to die down. And when that happens, the stock you thought was going to the moon is now stagnating…
Or worse, selling off.
Leaving you to hold the bag, while the rest of Wall Street has moved on.
Kenny “The Warlock” Glick
August 17 2022