Dear Student,
The S&P 500 is down about 6.2% this year, and the Nasdaq has plunged over 10%—with tech stocks, like the Mag 7, taking the biggest hit. The Dow isn’t faring much better, either – slipping roughly 4.1% year-to-date. And the stock market has wiped out all the gains it made since the November election.
Naturally, investors and traders are panicking—and you may be, too. I get it… wall-to-wall news coverage, tariff ping-pong, recession fears, and shrinking retirement accounts can do that. But this is when it’s the easiest to make a knee-jerk reaction that could cost you big in the long run.
And that’s what I want to talk about today: STICKING TO YOUR RULES.
We’ve talked about the importance of rules-based trading before. You can find the whole breakdown here—but basically, as a rules-based trader, you plan your trade and stick to your plan, no matter what the headlines are saying, or the markets are doing.
You’re not trading on emotion (the fastest way to lose all your money). You’re not just guessing and hoping for your trades to work out… You’ve got a clear set of rules that nothing can shake—even when the unthinkable happens.
Now you may be thinking, “But Tom, that’s easier said than done—have you SEEN these markets?!”
So let me show two recent, real-life trades that put this practice to the test…
The Progressive Corporation (PGR): 128.57% Gain on March 5
Back on January 14, I sent my students a new recommendation on PGR based on its seasonal bullish pattern that had happened in 9 of the last 10 years. It offered a $650 payout on just a $350 risk—a nearly 2:1 reward to risk ration.
At the time, the Dow, S&P, and Nasdaq were all up, and the overall sentiment was positive at opening bell.
But that optimism didn’t last long. And come February, volatility had picked up drastically as President Trump’s new trade war escalated.
Now we could have packed this trade up at the first sign of trouble… But we blocked out the noise, stayed calm, and didn’t allow the media to dictate how we would respond.
We stuck to our rules. And this is the exact strategy we used.
So on March 5, when the indexes were all down for the year, despite rebounding, we closed this trade out for a 128.57% total gain – $900 in profits per contract.
Tapestry, Inc. (TPR): 192.89% Gains on February 6
On January 2, I sent my students a recommendation on TPR. This was a 35-day pattern that showed an 11.5% move to the upside at least 90% of the time over the last 10 years.
The plan was to get in at opening bell and get out with profits on February 6 (the pattern’s end date) – win, lose, or draw. Market uncertainty was up… Consumer confidence was down…Fears of a recession were growing…
But instead of reacting to the headlines, we stuck to our rules.
And by the closing bell on February 6, my students got the opportunity to walk away from the chaos with an extra $1,736 in profits (a 192.89% total gain).
These are just two of many my students have been successful, thanks to staying disciplined. In fact, my students have already had the chance to make over $20,000 in profits since January 2 by sticking to their rules – and using this powerful trading strategy.
And this approach is just as effective when a trade is moving AGAINST you, too. We’ll talk about that – and a special “code” you should be using to trade – next week.
Until then, have a great weekend!
Tom Gentile
America’s Pattern Trader
