Ever seen Scarface?

There’s a big lesson in there from Tony Montana.

Now, this is definitely not a dude you should be taking life advice from.

But hear me out.

When Tony leaves the Babylon Club (Vice City, anyone?), Manny tells Tony to be happy with what he's got.

Tony says he wants what's coming to him.. "The world".

And he gets it.

The money. The house. The status.

The problem is: Tony wanted something without considering the cost.

There's a cost to every trade.

And you can't have the reward without the cost.

The cost is always how much you're willing to risk.

I'm not going to spoil the ending, but let's just say it doesn't go swimmingly for poor Tony.

Now, why does that matter for the stock market?

Because everyone gets what they want from the market.

Lots of people come to the market and they always get what they want.

Those who want quick money might find it.

But most don't and end up going through the revolving door of losing traders.

That's the cost.

And if you want longevity in this business, you'll take the steps required.

Make sure that what you want from the market comes with a level of risk that you’re willing to accept.

On the subject of risk I thought I'd cover the breakout retest.

Why?

Because stocks that break out often come back to test the resistance.

The price of any instrument is always curious and it wants to see what's around it.

And if a stock breaks out and doesn't go on a run straight away, it may want to come back and test underneath that resistance level to see what's there.

You can trade this.

By putting a limit order or buying in the stop loss liquidity where other breakout traders are closing their positions, you get to enter a trade with an outsized risk/reward.

Here's what I mean.

On Trade 1 we have the ordinary breakout and stop loss. We can see our risk/reward on the left.

And on Trade 2, the retest, we can see our risk/reward is greatly increased.

By placing our stops closer to the point where we be wrong, we can dial down our risk yet seek a much bigger reward.

The issue here is that not all breakouts come back to retest.

But if you miss a breakout don't immediately dismiss the stock.

You might just get a better opportunity to trade it.

This is explained in more detail in the sample video from my trading course.

You can watch it here.

There are three ways I can help you.

Spread Bet Accelerator: The exact system I use to trade and get you to your first £10k in profits. Use the code GIVEME99 for a subscriber discount.

Buy The Bull Market Premium: Free 30-day trial covering potential trades and insights as a professional trader.

Alpha Trader is where I work closely with traders who want to get to a professional level.

We have our own channel, meet up, and have fun trading and learning [closed].

Speak soon!
Michael