Why Trading Is a Long Game and How to Prep for It

by | Nov 23, 2021 | Trading Lessons

Hey. Matt here.

You probably often hear that investing is a long game, especially compared to day trading. It’s true — investors hold stocks much longer than those of us making trades each day.

But don’t get it twisted: trading is a long game, too. Just in a different way.

How exactly? Let’s explore…

Watching, Not Holding

A key part of becoming a successful trader is learning to watch stocks for long periods. It’s also knowing which stocks deserve your long-term attention.

A good, current example of this is Digital World Acquisition Corp. (NASDAQ: DWAC). I’ve mentioned this on ‘To The Moon’ watchlists and Small Cap Recap a lot lately. That’s because I believe in its power to pop.

We’ve already seen it … This thing sprang from $9–$175 in two days. It continues to pull back, and I continue to watch it.

And I’ll probably keep watching it. DWAC has already proven it has moonshot potential when the momentum finds it…

I don’t want to miss out on that. Some people will get bored with it trading sideways or even downward. But I’m fine waiting for the right setup to come along.

In the meantime, I’m not missing out on other trades. I don’t have money in DWAC and am free to trade whatever I want.

See how Bryce put this strategy to work last week with SPI Energy Co., Ltd. (NASDAQ: SPI).

When news came along, Bryce saw SPI’s potential. It had a huge run from $1–$47 — IN THE SAME DAY — about 14 months ago.

It crashed back down to earth and has traded sideways since. But being aware of its past helped Bryce know the upside of an SPI trade.

The Power of Patience

These examples are just scratching the surface when it comes to former runners…

Tim Sykes teaches about former runners for a reason. Remembering former runners can make ‘future you’ far more prepared AND much happier with your trades as a result. 

It made Bryce happy with SPI — and I’ll be pretty happy when DWAC breaks out again, too.

There are no sure-things in trading, of course … But keeping these former runners in mind WILL pay off in one way or another.

‘To the Moon’ Tips for Following Former Runners

So how exactly do you remember all the former runners? Here are some tips:

  • Keep a running watchlist of names that run. I like to use the StocksToTrade platform for that, and you can use it too. Or do it through your broker.
  • Set alerts at key breakout points so you can be notified when a juicy setup develops. Remember: these alerts may go off a year down the line so be prepared for some fun surprises and quick trips down memory lane.

If you want to REALLY prepare, you could study these breakouts thoroughly. Then write up a quick report that you can easily find — like in a Word doc, note, or spreadsheet. 

Dissect everything you learn about why the stock ran. Record key data too — volume, catalyst, pattern, and anything else you learn.

And when you have those slower days, revisit your notes to stay refreshed on the tickers and the catalysts that caused them to spike.

Preparation and consistency ALWAYS win out in the end. Start practicing now!

Until next time,

Matt

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