🚨 I’ll be live at with Alex at 9:30 a.m. ET🚨
We are breaking down the major AVAV earnings report and what its results mean for the broader drone space. Plus, we look at the tug-of-war between the bears and the bulls to see which side will win this week, alongside key strategies on how to successfully trade a short week [tap to join us for Profit Panel]
Markets frequently catch a sudden bid. Between headlines of geopolitical de-escalation and oil prices cooling off, we often see a broad relief rally take hold. But macro shifts like this create a different kind of psychological trap, especially when a core winner in your portfolio takes a temporary breather.
Take a position like Tronox Holdings (TROX). Recently, I was sitting on a 116% gain, but watched the stock pull back while the S&P 500 (SPX) climbed. When an “everything rally” is happening and your best performer lags, the urge to ring the register and chase the new daily movers becomes incredibly hard to ignore.
The Tug-of-War Between Fear and Greed
This is where the real internal battle happens. The rational voice sees a triple-digit gain and a minor dip and says, “Lock it in. Don’t let a triple-digit winner turn into a double-digit one.” That is a professional instinct, and it is rarely wrong.
But managing that tension means remembering the foundational work that has already been done. If you have already scaled out of the majority of the position and reduced it to a runner, the math changes. Once you have taken core profits, daily fluctuations — even countertrend moves — simply do not carry the same emotional weight.
Letting Winners Run Means Accepting Divergence
We all repeat the cliché “let your winners run,” but we easily forget that they do not move in straight lines. Real patience gets tested when the market narrative shifts and your specific stock temporarily loses the spotlight.
A core winner can be a standout performer for months. Selling the exact moment it stops outperforming or lags the Nasdaq Composite (NDX) for a few hours means missing the macro move. As long as the primary trend remains intact and risk has been structurally reduced, there is immense value in doing nothing.
This is not a suggestion to hold blindly through a full, structural trend reversal. Rather, once the initial risk is completely off the table, the smartest move is often to step back, tune out the noise, and let the trade work.
The broader market may react to shifting headlines on any given day, but for a protected runner position, the playbook remains identical: Trust the underlying trend, ignore short-term divergence, and let the winner do its job.
Geof Smith
Geof Smith Trading
Follow along and join the conversation for real-time analysis, trade ideas, market insights and more!
- Telegram: https://t.me/+lm8_Nq3Su104NmFh
- YouTube: https://www.youtube.com/@FinancialWars
Important Note: No one from the ProsperityPub team or Geof Smith Trading will ever contact you directly on Telegram.
*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
P.S. Wall Street’s Dirtiest Secret Yet…
I recently began sharing a secret report with my tight circle of buddies about hidden orders from Wall Street that send stocks higher within days…
Disclaimer: The trades expressed today are based on signals from the Sleeper Cell Scanner with the benefit of 20/20 hindsight unless otherwise stated. According to a backtest of 64 years of data dating back to 1962, the signals pulled by the scanner would have been 81.9% accurate on over 7,300 trade signals… No strategy is perfect, and wins are not guaranteed. There are bound to be winners and losers along the way. Since the Sleeper Cell Scanner is a tool for traders and not a trading service, profits and performance will vary among users.
