Message Received (Tesla Trade)

Okay, I get the message. Thank you for all the emails after the previous post. I hear the message, you don’t want me to hold back on the Tesla trades. So, just for you, here’s Tuesday’s little beauty.

This wasn’t the cleanest of setups, but then Tesla is so volatile it is often a bit all over the place. It did stay below the MA at the open though, which was a good sign.

Then the momentum kicked in right at the time I was looking for an entry, and in about ten minutes there was more than two grand in profit to take.

The exit came from the change in momentum. I’ve had quite a few emails asking about reading momentum, and for sure it can be challenging to learn. Maybe if there’s enough interest I’ll do a separate post about it. Anyway, the point was that this was a momentum trade, so when there was no more momentum, there was no more trade, and it was time to get out. TSLA is not a stock that rewards indecision, when it’s time to get out it’s time to get out.

Tesla is an expensive stock, no doubt about that. Well above my normal price range. It’s so regularly profitable though that I’m happy to make an exception. Here’s your regular reminder that one of the great things about trading stocks is that we can size our position with a fine degree of granularity. There’s no rule that says we have to trade a thousand shares, we can trade a hundred, or even ten. Heck, we could trade just one if we really wanted to. With four times margin, position sizing makes stocks like this available to virtually all account sizes. This trade taken with a ten-times smaller position, would still have netted more than two hundred bucks profit in about ten minutes.