How to Find Low Risk Entries and Protect Capital
Plus some low risk entries I'm seeing right now.
The entry is the foundation of every trade.
The best entries are the ones where we feel the most anxious or uncertain about buying. One reason why trading is so difficult is because our brains natural instinct is to “protect” and avoid uncertainty.
Our minds come up with every possible reason not to act when there’s a shadow of doubt about whether an idea will work… what if it pulls back more, what if this time is different than last time, what if the market just reverses, etc.
That hesitation is pure human instinct. When it feels uncomfortable or uncertain that’s usually where the lowest risk entry is. Most people only buy when it feels good… by then risk is much higher.
Think about it… if a stock comes down from $75, tests major support around $50, and is now sitting at $52, that’s $2–$3 of risk for potentially a much larger move higher. A 30% decline is a big drop and it never feels good buying when this happens. But that’s the alpha, most aren’t buying there. If you wait until it’s back to $58 you’re now risking $8 instead of $2 or $3.
The entry into a trade is the foundation… everything after that is built on top of it. Trims, stop loss, exit strategy, they all stem from that single decision. A poor entry on the other hand puts you at a major disadvantage.
Nail the entry and chances of success go up exponentially.
Once everyone on your feed is talking about a stock, it’s highly likely that the stock is much higher and entering would present a higher degree of risk. You want to be buying before everyone else is buying.
What do I mean by that?
Buying pullbacks doesn’t mean catching falling knives or just guessing when the bottom is, it’s more about understanding where demand has shown up before and recognizing when price is returning to those areas. Think of previous resistance areas that have a chance to flip to support, undercuts and reversals, double bottoms, etc.
These are my ideal entries.
A buyer should be act like a sniper.
You should not try to fire at every stock that moves or force trades just to stay active. You should be waiting patiently for a very specific setup at a very specific level where the odds are stacked in your favor. What many don’t like to hear is that most of the time, that means doing nothing and letting price come to you.
On 12/22, I notified subscribers via the subscriber chat that I was taking a position in AVAV right around $250. In less than two full trading weeks, the stock hit a +50% gain. I used this exact strategy outlined in this article. I’ll explain why I bought, what I was looking at, and more below.
I want to quickly highlight that my 2026 Market Outlook was published this past weekend, I’ll link it here. In this article I discuss how I’m thinking about the market and indices heading into the new year, my top individual stock and trade ideas for 2026, the themes I’m focused on and the specific names within them including thematic baskets you can own or trade, macro and micro analysis, key index levels, crypto, sector and industry breakdowns, international stocks, and more. Tons of themes and names from this list are already off to a roaring start, 2026 has been a great year already. It’s a big piece, but I think it’s well worth the read. I put my all into this outlook to help you prepare for the upcoming year, and I hope you find it useful.
I also want to mention that I made my first long term investment of 2026 on Tuesday, and it’s already up nearly 10%. You can find which name it is along with my thesis here.
In the remainder of this article I’m going to break down the lowest risk entry spots you can find, how to buy them, and how you can consistently identify them. I’ll walk through real examples with charts and explain what happened in each setup so you can replicate the process for yourself in the future, and I’ll also include setups I’m watching right now that may be presenting these same types of opportunities. The goal is to trade better by putting yourself in positions where the downside is clearly defined and the upside is asymmetric.
Let’s get into it.