Target extra cash this week on Roger’s No. 1 stock — LIVE at 1 p.m. ET
When it comes to trading, patience is often the hardest discipline to master. We all want action — the thrill of placing a trade and watching it move in our favor.
But in choppy markets, acting too soon can be a costly mistake.
The key is waiting for clear breakouts and confirmations, even if it feels like you’re sitting on your hands longer than you’d like.
Let’s take a moment to dissect why breakouts matter. Picture a stock stuck below its 50-day moving average. That average acts as a ceiling, a line of resistance that needs to be broken before the stock can move meaningfully higher.
Jumping in before that breakout — when the stock is still testing resistance — is like buying a house with a leaky roof.
You’re setting yourself up for trouble if the trend doesn’t follow through.
I’ve seen this time and again with stocks like Tesla (TSLA). Traders rush in as soon as they see signs of strength, but they’re jumping the gun. A stock might look like it’s rounding into shape, but unless it breaks above a key resistance level — whether it’s the 50-day or a well-tested trendline — it’s still operating in a downtrend.
A breakout gives you confirmation that the market’s momentum has shifted, and that’s what you need to trade with confidence.
Now, let’s address the flip side…
Why not trade the downside if the market feels stuck? It’s a valid question, and it depends on whether the stock has shown signs of entering a bearish phase. If we’re waiting for a breakout to the upside, the same rule applies to the downside — you don’t short until the stock breaks below key support levels.
A perfect example is the Financials sector (XLF).
When it was trading between the 50-day and 100-day moving averages, that’s no-man’s land. It’s not enough to see a gap up or down — you need follow-through before making a move.
Without it, you’re just guessing. And in this market, guessing isn’t trading.
So, what’s the takeaway?
Be patient. It’s better to miss a trade than to jump into one prematurely. When a stock like Dollar General (DG) or Spotify (SPOT) breaks out, it will show you.
That’s when you act, not when it’s still knocking on the door of resistance.
Remember, patience isn’t inactivity — it’s preparation. Waiting for a breakout ensures that you’re trading with the trend, not against it. And when you trade with the trend, you’re stacking the odds in your favor.
Roger Scott
Roger Scott Trading
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*This is for informational and educational purposes only. There is an inherent risk in trading, so trade at your own risk.
P.S. LIVE AT 1 PM ET: Roger’s Weekly Cash Flow Hitlist and More!
Is CHOPPY the new normal?
I’m sure you’ve noticed the market has been anything but smooth lately. But what if I told you there’s a way to profit from this choppy environment?
Join Roger Scott for CHOPPY MANIA at 1 p.m. ET today, Jan. 22, when he’ll reveal his “Fragmented” Weekly Cash Flow Hitlist — a strategy that targets high-potential income even in these unpredictable markets.
- How to navigate volatile markets without losing your edge.
- Roger’s Weekly Cash Flow Hitlist with stocks that are poised for profits, even when the market’s all over the place.
- Live insights on how you can target extra cash flow this week using his proven strategy.
Roger will be LIVE today at 1 o’clock…
