clair·voy·ant – a person who claims to have a supernatural ability to perceive events in the future or beyond normal sensory contact.

Man alive, how rich someone would be if they could predict the future. In trading, despite what you’ve heard, there is very little evidence that certain people can predict exact tops and bottoms with much accuracy. With that being said however, there are times when one can use simple technical levels and the information at hand to come closer than average.

This week I hit a few lucky spots in $YELP, which contributed nicely to this month’s gains. Now, the full disclaimer here is not that I picked the exact top and bottom, but rather how I put a little more “luck” in my favor by being patient and waiting for the setup.

Here was my tweet at the beginning of the trade:

Here is the chart at that time. I sold the put spread first because I saw the stock putting in a base around its 76 level:

So the support level held nicely. So now what? Well, now it’s time to wait and be patient for the short entry, completing the iron condor.  Here’s my next tweet a few days later:

So I went in with HALF SIZE. Why? …because I really didn’t know where the top would be exactly, so I wanted to give myself plenty of room for an adjustment if needed. I was pretty confident at the top though when it made a large run in the morning. As you can see, I didn’t nail the exact top – but who cares? With options, you don’t need to be so precise as with buying selling stock.

So there’s the trade so far. As of this writing it’s looking pretty good. Can it go against me? Sure it can….however I have planned my adjustments ahead of time so the stress level is controlled.

In any case, it feels good to be “lucky” every now and then, but for longevity in this business, I would say that learning the basics, controlling emotions and being patient, definitely puts the “luck-factor” more in your favor.