{"id":7585,"date":"2017-12-19T07:30:29","date_gmt":"2017-12-19T12:30:29","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=7585"},"modified":"2017-12-19T07:30:29","modified_gmt":"2017-12-19T12:30:29","slug":"how-i-know-we-have-a-winning-trade","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/how-i-know-we-have-a-winning-trade\/","title":{"rendered":"How I Know We Have a Winning Trade"},"content":{"rendered":"

Here\u2019s one thing I\u2019ve learned after 35 years of trading stocks and options, and recommending trades to clients and subscribers\u2026<\/p>\n

The most unpopular trades are the most likely to be profitable.<\/p>\n

Don\u2019t ask me to explain it. I can\u2019t.<\/p>\n

If you\u2019ve followed me for any length of time, then you know I\u2019m a contrarian at heart. I look for lower-risk trades, which by nature tend to be out of favor. And we profit as the trend reverses.<\/p>\n

Just about 80% of the trades I\u2019ve recommended this year have been profitable. And the annualized returns are off the charts.<\/p>\n

But human emotions never change. Everyone wants to be in the hot stocks and the hot sectors. Risk isn\u2019t a concern for most folks. Their focus is on the reward.<\/p>\n

So, back in October, when I started recommending trades in the retail sector \u2013 even though we had tremendous success trading retail stocks up to that point \u2013 my subscribers were ticked off.<\/p>\n

For example, in early October I recommended selling uncovered put options on Macy\u2019s (M). We weren\u2019t betting on a big rally in Macy\u2019s shares. We were just betting the stock wouldn\u2019t fall much further.<\/p>\n

To me, it seemed like an easy bet. At the time, Macy\u2019s was trading for seven times earnings and it paid a 7% dividend. Besides, we had sold uncovered put options on Macy\u2019s three times previously this year. Those trades generated returns of 15.3% in 12 days, 12.9% in 45 days, and 28.3% in 27 days.<\/p>\n

Those are enormous returns on a stock that is out of favor and has been falling in price all year. So, I figured my subscribers would willingly jump at the chance to sell another series of uncovered put options on Macy\u2019s when I recommended the trade in early October.<\/p>\n

You wouldn\u2019t believe the vitriolic email I received after that recommendation.<\/p>\n

That\u2019s when I knew for sure we had a winning trade.<\/p>\n

You see\u2026 when even the folks who know I\u2019m a contrarian trader HATE a trade I\u2019m recommending, then I know it\u2019s going to be a winner. So, after recommending the Macy\u2019s trade \u2013 which generated better than a 13% gain in 36 days \u2013 I got more aggressive in the retail sector.<\/p>\n

I told subscribers to buy speculative call options on Bed Bath & Beyond (BBBY).<\/p>\n

That trade produced a 117% gain in just two weeks. But you wouldn\u2019t believe the heat I took on that recommendation.<\/p>\n

Folks thought I was nuts. Some people canceled their subscriptions because of it. And the feedback I got\u2026 well\u2026 let\u2019s just say it was less than flattering.<\/p>\n

Fast forward to today\u2026<\/p>\n

The only sector that I think offers a low-risk\/high-reward setup is gold stocks. I\u2019m a big fan of gold stocks right here and I\u2019ve made a few recommendations to my subscribers on how to profit off of the situation.<\/p>\n

And they\u2019re groaning. Seriously\u2026 even my subscribers \u2013 who know I\u2019m a contrarian trader \u2013 are repulsed by the idea of buying gold stocks. Nobody wants to buy this sector.<\/p>\n

That\u2019s why I know it\u2019s a winning trade.<\/p>\n

Best regards and good trading,<\/p>\n

<\/div>\n

Jeff Clark<\/p>\n

Reader Mailbag<\/strong><\/h2>\n

In today\u2019s Mailbag, we hear<\/em> Delta Report readers’ concerns…<\/em><\/p>\n

Most of the year we have had a powerful market advance, yet you have recommended few long option trades compared to the short trades in your speculative recommendations. You have missed many good long setups.<\/p>\n

Is your trading style primarily a beneficiary of falling stock prices? Do you anticipate that you will do better in a falling market?<\/p>\n

\u2013 Joe G.<\/strong><\/p>\n<\/blockquote>\n

Jeff:<\/strong> Hi Joe. Thanks for writing in.<\/p>\n

It\u2019s no secret that I tend to lean bearish in my personal bias towards the market. But, that doesn\u2019t mean I always trade that way.<\/p>\n

In fact, of the 39 speculative trades I\u2019ve recommended in the Delta Direct<\/em> blog in 2017, only seven of them were bearish positions. Similarly, only seven of the 39 more conservative trades I\u2019ve recommended as official Delta Report<\/em> trades we\u2019re bearish. So, that\u2019s 14 bearish recommendations this year versus 64 bullish recommendations.<\/p>\n

That said\u2026 my style is conservative. I look for low-risk opportunities \u2013 which means buying stocks when they\u2019re oversold and\/or shorting stocks when they\u2019re overbought. I don\u2019t chase extended conditions. So, you won\u2019t see me recommending stocks that have run up too far too fast, or aggressively shorting stocks after a large decline.<\/p>\n

Despite that conservative stance, I think we\u2019ve done pretty darn well this year \u2013 with a win rate of almost 80% and an annualized gain well above 100%. There probably aren\u2019t a whole lot of options trading services with that sort of record.<\/p>\n

And yes, because of the conservative stance, I do anticipate we\u2019ll do even better in a falling market.<\/p>\n

I sure lost on your trade of the market going down<\/a> last Friday and this Monday and Tuesday. I thought you were really smart before my first trade.<\/p>\n

\u2013 Donald K.<\/strong><\/p>\n<\/blockquote>\n

Jeff:<\/strong> Hi Donald. The stock market did not do what I thought it would after the jobs report and right before the FOMC announcement last week. I was on the wrong side of that trade \u2013 which happens every once in a while.<\/p>\n

Over time, though, I try to get more trades right than wrong. Let\u2019s take a look at gold stocks a few weeks from now and see how that plays out.<\/p>\n

I understand that there is no sure thing in trading. You win some, you lose, and with a good strategy that focuses on risk mitigation and money management the good trader will come out ahead in the long run. That being said, the few trades that I have participated in and paid attention to since signing up for the Delta Report<\/em> are all getting obliterated.<\/p>\n

After paying my hard-earned money for your advice I am surprised, although I probably shouldn’t be, to be wondering why I paid for advice that has me losing money a lot faster that I would be without the advice, and with the subscription fee still in my pocket!<\/p>\n

\u2013 Frederick T.<\/strong><\/p>\n<\/blockquote>\n

And one reader tells us about his success trading cryptos this year\u2026<\/em><\/p>\n

I have a bitcoin and other cryptocurrency coins story. I began investing at $500 per day or $2,500 per week since 10\/25\/17. As such, 12\/25\/17 is my 2-month anniversary in buying cryptos. To date my $14k investment is worth just under $30k.<\/p>\n

I’ve been investing long enough to know that one day the excitement may be gone. Maybe not. All I know is that so many people have invested money in cryptos and made a killing. I’ve lost good money trading stocks and options also. So why not try an alternative?<\/p>\n

I’m pleased with the winning trades I’ve made following your investment advice, however I’ve also had a few losers. At 55 years old if I can make a decent score in the market, cryptos, and real estate over the next five years, I can coast into retirement feeling pretty good. It’s worth the risk. No risk, no big score.<\/p>\n

\u2013 Merc D.<\/strong><\/p>\n<\/blockquote>\n

As always, feel free to send in your trading stories, questions, and suggestions\u00a0right here<\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

This is this most powerful trading indicator\u2026<\/p>\n","protected":false},"author":25,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[7],"newsletter-type":[],"ticker":[],"class_list":["post-7585","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-jeff-clark"],"acf":[],"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/7585","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/25"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=7585"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/7585\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=7585"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=7585"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=7585"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=7585"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=7585"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=7585"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=7585"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}