There’s one rule I follow for the best entries on the strongest trade setups.
You might know how to find good trade setups, but with a bad entry, your position can quickly fall apart.
The other day I found an entry for a 200% trade. Here’s how…
I know what it’s like.
You find a stock that fits your thesis, you buy contracts, and you’re forced to take a loss right before the stock does what you want.
It’s frustrating. But it’s completely avoidable.
An Example on IWM
Earlier this week I alerted a trade on the iShares Russell 2000 ETF (NYSE: IWM).
It was a classic reversion bounce trade after the index fell from an earlier consolidation.
Here’s the alert I sent traders in the afternoon on Monday, August 31:
“BUY IWM 9/2/26 293 CALLS TARGET BY WED is 299. Any positive war news or bond yield relief could see some big buying in IWM, I like the optionality…”
Here’s my alert overlaid on the intraday price action from this week:
On Tuesday, September 1, the index fell lower.
I entered too early, but I had an ace in my back pocket. Here’s what I sent to traders that morning:
“Good morning selling across indices this morning, sitting tight no adding quite yet, but I like that IWM is stronger than QQQ. Welcome to September!”
That afternoon I was ready to average down:
“Since we’re in such a news driven market today, I want to add IWM but I want an extra day to not have all that risk expiring tomorrow so BUY 9/3/26 292 CALLS…”
My earlier contracts expired on September 2, I added an extra day to my new position in case another drop came.
On September 2 the IWM started trending upward, that’s the beginning of the bounce I was looking for.
Here’ s what I sent to traders in the afternoon:
“Nice move here in IWM… Not sure how some of you are only up 60% on the IWM second leg should be more like 200% here. As always, take some profits!!!!! But my feeling is that IWM could be a multi-day thing.”
On September 3 the IWM rallied even higher and I told traders to exit entirely that morning:
“Exiting IWM, AWESOME TRADE”
My Key for Trade Entries
It starts with your mindset.
Never marry a trade setup.
We can always dump or revise a trade plan based on the market’s newest data. That’s what I did on my IWM trade.
But in order to do that, we have to keep some dry powder.
Only trade with money you can afford to lose. And beyond that, keep some extra money on the side (dry powder) to help edit your entries on strong trade setups.
According to my reversion trade strategy, the bounce was coming on IWM. But I bought contracts too early.
My dry powder helped me turn this trade into a huge winner.
Keep some ammunition on hand in case you need to do the same.
Stay Street Smart,
Jeff Zananiri
*Past performance does not indicate future results, Not typical.
