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“It is better to be prepared for an opportunity and not have one than to have an opportunity and not be prepared.” Whitney M. Young, Jr.

This is probably not the first time that someone  told you that the key to success comes through proper preparation. This is also not the first article I’ve ever written covering this particular subject and it probably won’t be the last. The reason I feel this is such an important topic is because one of the challenges we face that is unique to trading is we have no idea when our opportunity’s may arise. For example, we all know that professional athletes prepare for their craft. However, their game, match or fight is most likely going to take place on a certain day within a certain time and they’re aware of that in advance. For us traders we don’t have that luxury. We don’t know when a prime opportunity is going to show up. Because of this at any given moment we must be prepared and ready to execute because that particular opportunity we are seeing may be a game changer or quite possibly we may not see another opportunity like that for several days. Therefore we must always be on guard and ready

Also, it’s not just important to be ready to recognize opportunity but it’s also important to prepare your self through your training to handle the psychological load that is placed on the typical trader. What I mean by this is that  in our line of work we can often find ourselves spending several minutes to several hours searching for setups during which time our heart rates are low and our overall demeanor is calm. Then all of a sudden a potential trading opportunity arises and your heart rate perks up and sometimes so does your anxiety. I think you know that feeling as soon as a potential trade appears you get excited and rightfully so. I mean this could be dank you are looking at right?  This is where our natural fight or flight response can kick in and for many traders if the anxiety level is higher than the excitement they may end up making rash and poor decisions.

In this lesson I want to take a look at a trade made in PBYI after market close on Tuesday and how being prepared was the difference maker in this trade. For starters I hardly ever trade post market so this is something I don’t do very often and on this particular day I happened to be doing our Champ Camp course and I’m really not paying attention to what’s happening in after-hours trading. While preparing the topics I was going to cover in my Champ Camp course I happened to notice on my broker account newsfeed that PBYI was up over $100 a share. Of course a move like that is going to make me want to look and when I did I couldn’t believe it. This stock had moved from $60 a share all the way to 190. The second thing I noticed was that the RSI was about 98. The 3rd thing I noticed was this is my favorite set up…ever

PBYI chart


Now I’ve done tons of videos about how I use that RSI to determine overbought and oversold conditions. It’s not the holygrail but it does give me a very good idea of when to execute a position. Based on those two factors alone the increase in the stock price and the extremely high RSI I didn’t hesitate for a second I just shorted that stock .

PBYI tweets

and 15 minutes later this is what I got a 1600 payday in 15 minutes.


Now you might think randomly shorting a stock that’s up this much is a crazy idea and you have reason to think that way. However, I see it differently. The reason for that I feel confident in moves like this is because of the countless hours of experience in preparation that I have in trading these stocks. These are my specialty  plays. In this particular case I didn’t have the time to research the full story on why the stock was up so much. I didn’t have time to read through the reports and do the valuations on a calculator. Because I have traded so many of these and because I have refined the strategy over the years and because I am prepared at any given moment to trade one of these I was poised relaxed and confident. Now that doesn’t mean the trade was a sure thing, it could have easily put the screws to me and yes that has happened several times before. However, most of the time it does work out and I know the odds and Im willing to accept them. The point is if I wasn’t ready, if I wasn’t prepared to seize opportunity like this on a moments notice I would have never drank the wine from this trade.

So in closing remember we never know when that opportunity may arise we don’t control that aspect of the stock market all we can do as traders is be ready and put ourselves in the best position to succeed. Now don’t get me wrong if you’re new trader or struggling one it will take you time to hone and develop your strategies to where you have 100% conviction in them but unless you prepare and study those trades you’ll never feel that way. You will never have the confidence required to be a winner. Keep in mind that it will be difficult to maintain a stringent level of preparation because as a trader you’ll spend more time studying and preparing for trades then you’ll actually be “in” trades. This can make you feel like you’re practicing or preparing for nothing and of course if you don’t seize the opportunity when it arises then that’s exactly what you did


You might enjoy these other posts

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Why traders fail


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