Newsletter Nov 5

Ever watch a stock rocket higher and feel that overwhelming urge to jump in?Your heart races. Your palms get sweaty. And that voice in your head screams, “Don’t miss out!”I’ve been there more times than I can count and let me tell you – it’s one of the most expensive lessons I had to learn on my journey to becoming consistently profitable.Just the other day, I was analyzing Palantir as it was showing incredible strength. The momentum was undeniable.Call buyers were piling in.Everything looked “perfect.”But here’s what most traders miss…When you see that kind of explosive move, your instinct is to chase – to jump in at any price because you’re afraid of missing out - that’s exactly when the smart money starts taking profits.Now, let me explain why waiting for the “sweet spot” is so powerful:The “sweet spot” is what I call the price area that’s more likely to provide support after a strong upward move.This area often aligns with previous resistance levels, which is where the stock struggled to go higher before.Now that the stock has broken above it, this area can serve as a floor – making it safer for us to enter.Imagine if, instead of chasing, you waited patiently for this “sweet spot.”You’d likely be getting in at a price where risk is lower, and the chance of a profitable move higher is much better.So next time you see a stock breaking out and feel the urge to chase, take a step back and follow this three-step approach instead:    1.    Wait for the Pullback: Set an alert for when the stock returns to a previous resistance level, ideally with lower volume, indicating a “cool-down” phase.    2.    Look for Support Signals: Watch for signs that buyers are stepping in (like a price bounce) when the stock touches this level.    3.    Consider Your Entry: Once support is confirmed, enter the trade with a stop-loss just below the previous resistance to manage risk effectively.Think about it…How many times have you jumped into a trade at the absolute worst moment, only to watch it reverse immediately?It’s almost like the market knows exactly when you’re about to make an emotional decision.The truth is, there’s always another trade.Always another opportunity. The key is having the discipline to wait for your perfect setup, rather than chasing FOMO.Because the best trades often come from watching a stock make its move, letting it settle, and then entering when others are getting impatient or giving up.It’s counterintuitive. It feels wrong. But that’s exactly why it works.The market rewards patience and punishes impulsiveness. Every single time.Your Partner in Trading Freedom,Team Theta Warrior