Here’s something I wish I’d figured out ages ago…
For 40 years, I’d built my whole game around finding stocks that would skyrocket in no time — fast money, directional plays, predicting the move and jumping in early.
But let me tell you, that’s hard, man. And I finally stopped pretending it wasn’t.
These days, I don’t predict — I react. I spot a trend that’s already moving and structure a trade around it.
No trend, no trade — that’s my rule. And the beauty’s in the simplicity.
Want to run a credit spread? Simple, as long as the stocks are trending. The trend does most of the work.
Take Alphabet (GOOG; GOOGL). That trend reminds me of a simple truth: An object in motion tends to stay in motion. I’m not trying to guess if it’s going higher — I just need it to keep doing what it’s already doing.
As long as I’m deep out-the-money (OTM) on the first reference, I let it do its trend.
And if it has a little pullback… So be it!
Deep OTM keeps me in control.
Why I’m Done Playing Fortune Teller
Here’s the thing about being predictive: You’re constantly guessing.
Where’s the bottom? When does the breakout happen? Is this the dip to buy?
Being reactive is different — when I see a trend, I’m drawn to it. If I were still trading stocks directionally, I’d buy the stock the moment I spot this trend.
But I’m running option income strategies now, so I structure trades around that established momentum. With a trending stock, selling a deep OTM cash-secured put is a breeze — same thing with credit spreads.
Reactive trading isn’t flashy.
It won’t make you the hero who called the bottom.
But it’s consistent. It’s probabilistic. And that’s exactly why it works.
How I Filter for the Right Setup
When I’m hunting for new plays, I’ve got a simple checklist.
First, I eliminate stocks under $25 — liquidity matters.
Second, I make sure the stock hit a new high within the context of an already existing trend — preferably three to six months. I want momentum that’s been building, not a one-day wonder.
If a stock hits a big gap up and hits a new high on that gap, I kick that out. There is no established trend backing it up.
GOOG hitting a new high? That’s one that has a great trend to back it up.
But not everything that’s rising is sustainable.
Lam Research (LRCX) — that trend’s a little too steep. It can’t go much higher than $214 without taking a breather. It just can’t. That’s not the kind of trend I want to lean on.
I’m looking for steady, established, multi-month momentum. The kind of trend that doesn’t require heroics or perfect timing.
The kind that lets me set up a trade, collect premium and let the market do what it’s already doing.
Reactive trading isn’t glamorous, but it’s stable, disciplined and grounded in probability.
I’ll take that over guessing any day of the week.
Trade well,
Jack Carter
Jack Carter Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
PS. A New ‘Income Glitch’ Opportunity is Flashing As We Speak…
This market anomaly occurs on some of the biggest stocks in the market.
And the newest “income glitch” opportunity that just triggered…
