Hey traders,
Last week, I talked to you about spotting high-probability moves and used PLTR as an example.
At the time, I told you PLTR had gotten a little too far from its green 20-day trendline, and I expected it to come down to get near that trendline — or possibly even touch it.
Well, today I want to follow up on that for two reasons:
- To show you exactly what happened with PLTR over the past week.
- To highlight why I trade the way I do — and why I always talk about stacking the odds in your favor.
Here’s a current chart of PLTR:
- The yellow arrow marks the day I wrote that post last week.
- The red arrow points to the lowest price PLTR reached during this time.
What do you notice?
Even though PLTR dipped near the green 20-day trendline, it never actually touched it.
Not last week, not today — even after the big selloff after the Fed’s rate decision.
That’s the key takeaway: Trending stocks tend to keep trending.
Now, don’t get me wrong. If you dig enough, you’ll find examples where this doesn’t happen.
But trading isn’t about perfection. It’s about playing the odds — and we did that beautifully with this trade here.
Lessons From PLTR’s Move
There are a couple of key lessons here:
- Trading trending stocks is where you want to start.
An object in motion tends to stay in motion. An object at rest tends to stay at rest. Remember those lessons from high school physics? It’s kind of the same thing with stocks. By trading trending stocks, we have insight into the most likely thing to happen next. - Careful if the trend gets too strong.
I pointed out last week that PLTR had gotten a little too far above its trendline and I expected it to come down a bit, possibly even touch its short-term trendline. And while it did dip closer to the line, it never touched it. That’s a sign of a strong trend. - Trading in a high-probability way stacks the odds in your favor.
Let’s say I’d bought puts with a 66 or 67 strike price, expecting PLTR to touch that trendline. What would have happened? That trade would’ve been a big, fat loser.
But by selling puts or a credit spread below the trendline, I dramatically increased the odds of winning the trade. PLTR didn’t need to drop to 66 or 67 for the trade to succeed. All it had to do was stay above the trendline — whether it moved up, sideways or even a little bit down — and that’s exactly what happened.
The Power of Stacking the Odds
Here’s the beauty of trading this way:
- Things don’t have to go exactly as expected.
- We expected PLTR to dip — and it did move down a bit, but then it moved sideways and even a little higher.
- And yet, our trade still came out a winner because we played it smart, focusing on playing the odds and not on perfection.
Even today, after the market’s Fed-related selloff, PLTR is still above its 20-day trendline. That’s why this approach works.
It’s not about predicting the future — it’s about giving yourself the best shot at success.
The Bottom Line
High-probability trading isn’t about being right all the time. It’s about putting the odds in your favor so you don’t have to be.
This PLTR move is a perfect example. The trend, the setup, and the strategy all worked together to deliver a winning trade — even though the stock didn’t move exactly as expected.
So as you plan your next trade, remember this: Don’t gamble on the market doing exactly what you want. Stack the odds in your favor and let the probabilities do the heavy lifting.
Trade well,
Jack Carter
P.S. My One Ticker Challenge is the perfect way to execute on this strategy. Not only are you stacking the odds in your favor. You’re cutting out all the market noise and focusing on a single stock each week. Check it out here.
