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I Screwed Up And Held My Tongue

Hey trader, I admit it. I screwed up. I made a mistake. This past week, I had a couple of trading sessions where I took trades or adjusted trades that shouldn’t have been touched. Others would have been big winners if I’d just stuck to the rules and process I’ve followed for years. Now, you might be a little perturbed if you were following the trades with me. You might even think, “How can someone who’s been trading for 26 years, using this system for 15 of them, make such a simple, absurd mistake?” Well, I have an example that should resonate with you: have you ever bitten your tongue while eating? Biting your tongue is a perfect example of how experience doesn’t make you immune to painful mistakes. Some of us have been chewing every day, thousands of times, for decades. Even after millions of repetitions, we still somehow

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How a 48 Cent Call Removed My Risk on This Trade

Hey trader, You finally get a winner on the board. Then you watch it round trip back to flat by the next open. Plenty of traders give back open profit while they wait for a bigger move. The market pays nothing for that kind of patience. A cheap long call can be restructured so the trade cannot lose money again. My USO September 9, call cost 48 cents and sat up $102 by the close on Tuesday. I had not sold a thing against it yet. Today I’ll show you the sequence that turns an open gain into a floor you keep. That way, the worst you can do is break even. Here’s how it works. The Option Comes First Tuesday morning in the futures room I took a long call on USO for September 9 expiration. The cost was 48 cents. I bought more time than I thought the

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How A $38 Risk Paid $230

Hey trader, Friday morning cost me $110 on a gold short that reversed and took my full stop. The crude trade that same session risked $38 and returned $230. Comparing the two: the loser risked nearly three times what the winner did. That gap has nothing to do with being right more often. It comes from what you demand of a setup before you put money behind it. Cutting risk is the easy half of the job… Sizing the reward that sits behind it is where the account actually grows, and that’s the tenet the 10% club is built on. And it’s particularly relevant when you’re starting out with a smaller account of, say $5,000. With volume running near half of last year’s on Friday, these examples, both good setups, illustrate this point perfectly. So, let’s go through both. Two Trades, One Morning, Very Different Math Friday sat between a

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How to Manage Risk Around Data Drops

Hey trader, Exit decisions made under pressure turn into guessing. Traders stare at the screen, hope for one more push, then watch the profit drain out. But you don’t always have to take it lying down. We’ve all seen data releases move the markets. Holding through one can turn your healthy profit upside down in a heartbeat. Calendar events give you time to plan, prepare, and execute. You can MANAGE risk instead of letting it manage you. Tuesday morning I was long a gold channel trade with the 10:00 Eastern JOLTS release nine minutes out. I gave the position one condition to meet. It failed the test. I limited out at 4408 and kept $120, then watched gold drift right back down to my exit price. Knowing how to handle these events is critical to successful trading. Today, I’m going t walk you through how I did just that. You’ll

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The Number Put Sellers Never Check

Hey trader, Selling puts for income looks easy until assignment shows up. The fattest premium on the chain usually carries the thinnest cushion. Plenty of traders scan for yield and stop there. They never measure how far price has to fall before the trade costs real money. That gap turns an income plan into a stack of underwater positions. I ran the number out loud on Wednesday before selling a contract. The premium paid 4.14%. Price had to fall 8.8% before I lost a dollar. Below I’ll cover the filter I use, the setup it told me to skip, and when to take profit early. That way you can price the risk before you accept it. Willingness To Own Comes Before The Premium A short put is an agreement to buy stock at a set price. Someone pays you to keep that agreement open. I sold a SpaceX put on

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The Divergence Everyone Misreads

Hey trader, The Dow bounced Tuesday morning…price climbed back to fair price off an oversold reading…the stochastic crossed up. Traders saw a reversal and went looking for a long. That read was wrong. The indicator printed a higher high while price printed a lower high. That pattern is a hidden divergence. It warned that the downtrend still had control of the tape. The Dow fell through 53,492 in one shot. Buying that bounce put you 40 points underwater. So the question is what traders get wrong about this signal. They read every divergence as a call to fade the trend. A hidden divergence does the opposite. It tells you to stay with the trend, and it hands you a target and a stop before the move starts. Below, I’ll cover why the standard read fails, how to mark the signal correctly, and why it works. Why The Standard Read Fails

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Why Context Beats the Signal

Hey trader, If I gave you these ingredients: shortening, flour, cream, salt, could you tell me what I was making? Would you feel confident guessing? Or would you say, “I don’t know exactly what you’re making, but I’d use those to make my favorite dish”? As someone who loves to cook and bake, I look at ingredients like these more generally: fat, starch, liquid, salt. Each one has a purpose, but purpose isn’t destiny. Those four ingredients could be the start of a pie crust, sweet or savory. They could become English scones, one of my favorites… Or they could be the base of a thick, creamy gravy. If we walked into a kitchen, saw flour, cream, and salt on the table, and guessed scones, without noticing the roasted turkey already resting on the counter, we’d be disappointed when the sweet treat never shows up. The letdown lands even while

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How A Dead Tape Paid $112

Hey trader, The tape had all the energy of a morgue this morning. The Russell was going absolutely nowhere, chopping in the same tight range it sat in all night. It’s so easy to get sucked in out of sheer boredom. Yet, that’s usually when you miss some of the best trades. I went short Russell micro futures this morning, snapping up $112 with my risk capped at $100. This wasn’t a trade I had to force. It actually came from the combination of a technical setup AND the ideal macroeconomic environment. When you get BOTH of those working in your favor, even soft markets can become profitable. Today, I want to take you behind the curtain of the 10% Club and lay out the entire trade for you. We’ll look at the macro factors building against equities and the short setup that offered a high-quality trade. That way, you

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How to Cut Your Risk Without Cutting Your Target

Hey trader, Risk management separates retail from pro traders. Yet, traders often overlook the most useful tools, not because they don’t know about them, but because they don’t understand why and how to use them. Trailing stops have to be one of the best examples. You’ve probably heard it’s inefficient to use one. I disagree. Heck, I use them every day. People who say you shouldn’t use them say they reduce your profits. That’s the wrong way to look at it. A trailing stop earns its keep by shrinking risk, not by locking in profit. Used properly, it improves your overall performance. I want to take you through the way I deploy them so you can see how and why I use them. Why A Trailing Stop Shrinks Risk Instead Of Profit A trailing stop moves your stop loss along behind price while the target stays put. Nothing else about

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Protecting Yardage: What Kickoff Returns Teach Us About Stop Management

Hey trader, Football season kicks off in just under two weeks. I normally avoid sports analogies, though this one feels like the right moment. It gives us a chance to celebrate the season and talk about risk management at the same time. Picture two teams lined up for a kickoff. The kicking team lines up in a row, unthreatened, focused only on driving the ball as far downfield as possible. The receiving team spreads out wide. They try to cover as much field as they can without knowing exactly where the ball will land. Once the ball crosses midfield, the receiving team is often defending more than 2,500 square yards. And that’s where the lesson lies. Only two players stand between the 20 yard line and the goal line. For the receiving side to gain yardage and have a shot at scoring, they have to reverse the ball’s direction across

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