I want to talk about one of the most popular questions in our Kilo Club community. Everyone wants to know the same thing. What should they do with all the AI stocks that got away from them, the ones they still don't own an initial position in? This is really weighing on people, so I want to give you a roadmap.
This is not financial advice. But if you are going to chase, I want you to chase strategically. There is a smart way to step into a name that has run without you, and there is a sloppy way that gets people in trouble. I am going to walk you through the smart way.
It all starts with your chart. Before I add a single dollar to anything, I need to know where the market is leaning, and I get that from a few moving averages I keep on every chart I look at.
The first one is the most important. It is my 200 simple moving average, and it is my North Star. I keep it set to the daily on every single chart, no matter what timeframe I am looking at. When a stock is trading above the 200, that level acts as support. When it is trading below it, that same level acts as resistance. The reason it works is simple. Every serious trader on the planet knows where the 200 SMA is, so it becomes self fulfilling. That is exactly why I teach you to keep it on your screen at all times. There is a free video on optionsgoddess.com that shows you how to set it up if you do not have it yet.
Here is a setup tip that trips a lot of people up. If you are looking at a four hour chart and you drop a 200 moving average on it, by default it is reading the four hour bars, not the daily. You do not want that. Go into the settings and change the timeframe to one day. Now you are looking at the daily 200 SMA even while you study a four hour chart. That keeps your North Star in the same place no matter what timeframe you are working on.
I run two more moving averages alongside it, and these are the ones that do the work when I am trying to get back into a name that got away. I use a 50 EMA and a 100 EMA. The reason I use exponential moving averages here instead of simple ones is that EMAs move a little quicker. If you are trying to get into a stock you have been missing out on, the Exponential moving averages will get you in a little sooner. So I lean on the 50 EMA and the 100 EMA for my earlier entries on the lower timeframes, and I save the 200 SMA for my major, cherry on top entry.
So now you have the tools. The North Star, plus two faster averages for timing. The real question is how you actually put money to work at each of these levels without blowing yourself up.
Let me show you exactly how I would scale into a name like Marvell if I didnā€™t already own it.
The Roadmap, Dollar By Dollar
Let me put real numbers on it. Say I have decided I want to commit $21,000 to Marvell. The whole point is that I do not want to put it all in right here, up at current prices, because I have no idea where the stock goes next and I have nothing left if it pulls back.
So I build a ladder around my moving averages.
If the stock pulls back to the 50 EMA, I might add $3,000. That is my first, smallest poke.
If we get a deeper pullback to the 100 EMA, I double it to $6,000. The deeper the discount, the more I am willing to commit.
And if we get all the way back to the 200 SMA, which is also old resistance turning into new support, I quadruple my initial entry to $12,000. Maybe it is only $9,000 or $10,000, depending on how the trade is sizing up. This is just a roadmap. I want you to see the logic, not memorize the exact dollar amounts. Notice the shape of it though. Up high it was $3,000. Down at the 200 it is three or four times that. The lower the price and the stronger the support, the heavier I lean in.
Why I Will Wait A Year For It
This takes patience, and I need to be honest with you about that. Doing it right is strategic, and it pays so much better in the long run. I would rather miss a trade entirely than have to dig myself out of losers that I chased at bad levels.
So I am not loading up at the 50 EMA, but I am entering a small double-down at the 100 EMA. I am leaning heaviest near or at the 200 simple moving average. I am patient. I will wait a year for that level if I have to.
Now here is something important about the 200. It is not a fixed price. A year from now this could still be me entering, but that 200 SMA might have climbed. It could be up at $140 instead of $112. The level moves and adjusts with the market over time. That does not change anything about my plan. Wherever the 200 SMA is when the pullback comes, that is still my North Star, and that is still where I lean the hardest.
This is the same idea I walked through when I added to my Google position right at the 200 SMA in MM19. It is also why I am always reminding you in Course 202 not to step in front of a fast moving train. Chasing a racehorse straight up is how you get run over. Waiting for it to come back to a level is how you get a good entry.
If You Are Not Ready For Options Yet
Some of you are going to say, Laura, I am not ready to do options. That is okay. This exact same roadmap works with plain stock. You buy $3,000 worth at the 50 EMA, $6,000 at the 100 EMA, and $12,000 at the 200 SMA. Same ladder, same patience, same logic, just shares instead of contracts. NOT FINANCIAL ADVICE, simply a money management plan.
And then there is the version I personally love. Maybe I buy some stock at the 50 EMA. I buy some more stock at the 100 EMA. And then, if we get all the way down to the 200 simple moving average where my support is strongest, that is where I leverage using synthetic longs or modified synthetic longs.
That is the piece I really want you to prepare for. If you do not yet understand synthetic longs and modified synthetic longs, please take the time now to learn them. I teach them in detail in Course 301, and I used Marvell as my example there for a reason. A synthetic long lets you use margin to take a leveraged long position at a major bottom, and the modified version gives you a put spread to lean on so you can manage your risk if you are not certain you have found the absolute low. When this opportunity finally presents itself, I want you to already know how to structure it properly, so you can manage your risk instead of scrambling. If you want to see what these look like in the real world, I broke them down in MM27 and MM28.
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The whole game here is patience plus a plan. The stock got away from you once. Do not let that frustration push you into a bad entry. Build the ladder, mark your levels, and let the market come to you.
Not financial advice, but I truly hope this lays out the framework for how you can start scaling into the names you have been watching from the sidelines.
Thank you so much for being here, and have a wonderful day.