Check out $MSTR $MARA and $RIOT. How are you trading them? – December 4, 2023
This is Dan Fitzpatrick with FITZ IN FIVE. Let’s look at MSTR MSTR ( NASDAQ: MSTR ) here.
You will just see some of the trades that we made in the past. A good move on here, a really good trade here, where the initial buy was here. I know some of you will go, “Well, I bought it at 280.00.” Okay, great, I bought it for $108.00 higher. Here’s the deal though, we buy it here, set a very defined risk down here. We raised stops all the way up and were never hit.
All the way up we are also looking like maybe we will take a little off the table. Oh I know, rather than taking some off the table, let’s just put in some pretty tight stops, so that we give this rocket ship room to run without just taking profits on the one hand, to where we are missing out on the rest of the move. But at the same time, without incurring too much risk of giving money back.
It is one thing to be able to raise your stop to a break-even, to where you say, “Okay, now I have, literally, zero risk in the trade. Now it doesn’t matter because if the stock comes back to my entry point, I’m going to be stopped out and I won’t lose money.” Well, the idea of trading is not, to not lose money. That is certainly a goal, it’s one of the goals, but we want to be making money.
The idea of setting stops that are too loose will make you risk more money than you will make. And so, there is really a balance there, as far as, what’s the balance between where the stock is right now and where your stop would be, which is the, oh crap, I’m wrong, I’ve got to get out, level.
It’s not hard to do but you’ve got to do it; where you need to always balance the relationship of missing out on more profits, versus being hit by losses. Where does that ultimately leave you? We traded this very strategically and wound up doing really well. We didn’t make as much as if you had bought right at the low and sold at the high. But you only get to do that in theory, you don’t get to do that in real-time.
Now, let’s get up to the present day. We are back here, my good buddy Scott McGregor at Crypto Market Mentor, follows this stuff really closely, MicroStrategy ( NASDAQ: MSTR ) is his deal. He loves Michael Saylor, CEO of MicroStrategy ( NASDAQ: MSTR ), which is kind of turning this company into a Bitcoin strategy, or crypto strategy, really.
So Scott sees this move, he’s in, I think he’s in a couple more. Finally, the stock gets up here. My idea was to buy because I hadn’t really been following it, my idea was to get it when this stock was grinding sideways. That one worked out pretty well for us, I’ll show you where we are right now.
This is our Active Trades List with some of the recent trades we’ve got. We’ve got MARA ( NASDAQ: MARA ) up 23 percent. MSTR MSTR ( NASDAQ: MSTR ), again, from our 405.85, you can see that here from our 504.85 and we’ve got the current stop at 552.30, that’s fine, we’re up 11.5 percent.
So what happened today? The stock drops down, at one point, to 550.00, so we are out. Well, we got a really, really nice gain on this stock and we didn’t hold it for more. Now, another way you could trade this is, and it’s what we’ve done in the past, you set a partial stop, which is actually what I suggested. You set a partial stop just below today’s intraday low. I had set that somewhere right here. This is what I was using as the intraday low, and ultimately the stock comes down and stops us out.
So what have we done? We’ve done a good risk/management strategy, where we protect our gains. But then at the same time, we’re giving ourselves room for more moves higher. Because you look at the way this is trading on a weekly chart, this thing is just running right around the upper Bollinger Band. The only time that’s ugly is if I’m not in it. Then I’m happy for others but not as happy as I would be if I were one of them, but this is what strong stocks do.
If we look at some of the others, MARA ( NASDAQ: MARA ), which I remember at the time saying, “Guys, it’s kind of a late entry here. I acknowledge it, it’s not our typical type of trade. We are in on the 28th, which I believe was, on this one, it was an, I got a, chase an entry, I got a, get in entry. But the idea was, with all of these crypto stocks moving higher, in this case, it’s better late than never. Better late than not at all.
When you are in a momentum trade you have got to, sometimes, just get in there. And then your risk is not managed by getting the perfect entry, where all it takes is a small adverse move on the way back. And you will say, “Okay, I’m wrong and I will get out,” before you risk more money.
Instead, your risk/management tool is, I’m going to take a small position in this because my stop has to be, maybe, a little bit looser to account for the volatility. And so why would you take a smaller position in a stock like this? Well, because it is running so fast that if you are correct that small position is going to get to a bigger position in a hurry. And that is what has happened here with MARA ( NASDAQ: MARA ).
We are still in this stock, we’re up 23 percent in just 6 days. I don’t know about you, but to me, that’s real money. And then similarly in Riot ( NASDAQ: RIOT ), we got a partial stop here at 14.85. And so where was that? Well, it was below the morning intraday low, and then finally it did get hit, right down here.
By the way, this is classic 59-Minute Trader type of trading, where you are looking hard at the first half an hour of trading, or so, and then following this through. You could have made a trade here, I am not going to get into detail, this is a video, not a course. But you could have made this trade here, hopping in here and jumping up. You get a percent or two just on a real quick trade. But then the big trade was when this thing came down below the open.
Now you know that this stock is going to be under pressure. You saw this, you did, with MSTR ( NASDAQ: MSTR ). And then the same thing with MARA ( NASDAQ: MARA ). So you see these things happening and you can trade accordingly if you understand the strategy. But here on Riot ( NASDAQ: RIOT ), we went ahead and looked at this at a 12.45 entry, still moving. So it’s a 20.5 percent gain, but we have taken some partial profits on this.
This is the way you want to be trading, for two reasons. First of all, because it is how you make money. Second of all, this is how you make up for the inevitable losses that you are going to take in trading. That’s part of the deal, it’s called trading, it’s not called winning, or entitlement.
So you want to be managing your risk all the way up. And if you can do that you’re going to wind up seeing a very few of your trades, like 20 percent of your trades will result in 80 percent of your profits, and that’s a true statement. You can only expect the bulk of your gains to come from very few trades. It’s kind of like, when you’ve got one going when you’ve got a good one going, ride that thing until it bucks you off. Don’t get off early.
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