Trading is not gambling. Anyone who tells you otherwise has never spent a day at a trading desk.
My favorite strategy for slow markets.
But the best Blackjack players can definitely teach you a thing or two about how they beat the house.
Counting cards isn’t illegal. But if you are caught doing it, the casino will (kindly) ask you to leave…
The reason is simple:
Card counting tells you the best time to raise your bets (or lower them).
It’s not a perfect system, but the odds increase drastically when you do it.
The method is just as simple:
Blackjack strategy is all based on the likelihood of receiving a 10 or face-card as your next card.
So card counters keep track of the ratio of face-cards to non face-cards that are left in the deck.
When the odds stack up (meaning a lot of face-cards are left) they up their bet size.
When the ratio flips (meaning you’re less likely to receive a face-card) they lower their bet size.
It works…extremely well.
So well in fact, that casinos will ban you from their tables if they catch you doing it.
Playing the market works a lot like playing the house in Blackjack.
But nobody will kick you off your trading platform for reading the tape well…
To beat the market, you want to size your bets according to the environment you’re trading in.
In a hot market, you can double down.
But when the tape is slow, you have to be careful.
A slow week is where I used to lose the most money. I couldn’t sit still, so I’d force trades that were never there.
This week was slow…
TRUG is where it started.
I gave it a try over the weekend in small size, and I said right in the watchlist I didn’t have big hopes for it.
Tuesday it ran straight into the zone where I wanted to sell, all inside the first hour. Then it rolled over and closed the same day down 43% from its high.
If you weren’t glued to the screen, the whole move came and went without you.
Then ImmunityBio, Inc. (NASDAQ: IBRX)
My line was a close over $8.50. Thursday it pushed up, got within 4 cents of my number, and faded right back before the bell.
Nothing triggered, so I sat it out.
Moderna, Inc. (NASDAQ: MRNA) I wanted to start selling at $160. Thursday it tagged the level and couldn’t hold it into the close. The price I wanted printed and then it was gone.
Space Exploration Technologies Corp. (NASDAQ: SPCX) I wanted to buy on a dip back to $150. It gapped right past the level at the open. The setup I drew up never even existed.
4 solid names, and not one of them paid.
This is what a market with no follow-through looks like. A move starts, nobody steps in behind it to carry it, and the stock gives the whole thing back.
The market isn’t paying right now, and I’m not going to argue with it.
A smart black jack player is sitting this hand out…
When your levels keep getting hit and failing, or gapping past you before you can get a fill, you’re in one of these tapes. Nothing sticks.
Forcing a trade into a market that won’t follow through is how you give back what you made when it was good.
Better action is coming. When it does, these stocks will stop faking through their levels and start holding them, and you’ll see it right away.
Until then, the after-hours markets are proving to be extra juicy territory these days.
My mentor Tim Sykes is running a FREE webinar breaking down the exciting moves he’s been riding after the bell.
You can watch it right here.
Stay sharp,
Jack Kellogg
*Past performance does not indicate future results
