Today's trade is in a name that has the potential to really rip. Of course, the nature of this type of trade is that it has a lower probability of success.

But if we get it right, our potential gains will likely be exponentially higher than any heat we're likely to take in this trade if we're early or wrong.

So let's get right to it.

I’m reading Annie Duke’s latest book “Quit: The Power of Knowing When to Walk Away.” Though I’m only about halfway through it I can already confidently recommend this book to traders.

The book isn’t addressed to traders, though it frequently references our profession in its anecdotes and many of the stories are very relatable.

And it certainly has me thinking about better ways to decide to quit a trade, quit a strategy, or quit a product.

I frequently go down rabbit holes, experimenting with models to extract consistent, repeatable, acceptably risk-adjusted returns via index options. I’ve written about my near-constant obsession with this project numerous times. It continues.

As a trader, it's always good to be working on some kind of “side hustle.” In our cases, this is more likely to look like building a new strategy, fine-tuning a scanning method, or constructing a money management scheme that can propel us into becoming more profitable traders.

This morning, my Head Technical Analyst Steve Strazza joined me on The Flow Show to put our heads together on a new trade:

Strazza loves the Energy sector here, and of all the charts he likes, I liked this one in Valero Energy $VLO the best:

Best of all, options premiums are near the lowest levels of the year for $VLO:

The speculative fever is returning in a big way.

Today's trade is in one of those names that has already benefited from the recent surge in stocks and crypto prices and is likely to continue thriving if this brewing mania is here to stay for a while longer.

Here's something we don't do very often -- we're going to patiently leg into a position.

Bottoms are a process, and we're taking a position that is betting on a turn on a much-maligned overseas market.

We think the turn can be messy and sloppy sideways for a little longer, which will allow us to get better prices if we go into it with a plan.

What if I’m wrong?

I get ideas. Sometimes crazy ones.

I see something in the charts, or read something in the news, or listen to something on spaces and it triggers me into taking action.

Sometimes I’ll take aggressive actions because this idea I have – wherever it came from – is something I feel strongly about. I feel that the odds are heavily stacked in my favor. Or perhaps the payoff, if I’m right, can be so overwhelmingly profitable that it’s impossible to ignore.

We all have these feels about certain trades we’re in from time to time, right?

We get excited. We get optimistic. We start counting our winnings before they’ve even hit our account. It becomes impossible not to daydream.

There’s nothing wrong with any of this.

But what if I’m wrong?

Like the Energizer Bunny, the bull market just keeps going...

Who am I to fight the trend?

Today's trade is a stock that has been consistently traveling the path of least resistance higher and we're betting on that trend continuing.

With bullish setups continuing to climb this week, I like the cushion this gives me to continue putting on some bearish bets to help smooth out any possible portfolio volatility that may be on the horizon.

Today's bearish "hedge" is a short bet in a technology name that is most definitely not keeping up with its peers.

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Many swing traders and investors are currently sitting on a First Class problem. But it’s a problem, nonetheless.

These traders are sitting in positions with huge open profits.

I can use NVDA as an example. But there are many, many big winning trends still acting well.

Those of us who like to style ourselves as Trend Followers will soon be faced with a difficult decision – how and when to determine when a trend has ended.

It’s easy in hindsight to look at a chart and spot the moment a trend was invalidated and an optimal exit price is clear. But in real-time, it’s not so easy. In fact, it’s impossible. Because contrary to popular belief, no trader can reliably and consistently predict the future.

But the stakes are high in these moments. For a trend follower, the occasional big wins are what we rely on to make our nut.

The life of a trend-following trader can best be described as long periods of near-constant frustration punctuated by short moments of fleeting bliss.

Today's trade is in a steel sector name that recently poked its head above a resistance level that had been capping the upside for over two years now.

As the stock consolidates its recent breakout, options premiums are quite low, offering us the opportunity to position in some longer-dated calls for a simple bet on higher prices.

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