Larry’ Note: It’s last call if you haven’t yet checked out one of my favorite trading strategies…
When Trump announced his tariffs, the market plummeted… When he paused, the market leapt for joy. Up, down, sideways… Everything is all over the place with Trump in office. Most traders panic…
But anyone who follows my trade alerts had a chance to profit.
So if you want to learn how to potentially collect near-daily wins like $597, $1,340, even $2,010+ using just ONE ticker, now’s your chance. Watch here now before the replay goes offline.
Over the past few months, markets have been crazy.
First came the fall. The Liberation Day tariffs announcement in April exacerbated the dramatic drop.
But in one of the most remarkable recoveries I’ve seen, stocks surged back to take out all-time highs. That move took all of two months!
Compare the double-digit recovery in the S&P 500 against its historical average of around 8% or so a year. The Nasdaq has done even better. It’s up almost 35% from its April low.
When markets gyrate wildly, it’s easy to get swamped by all the action. Strategies that you’ve used successfully for years can suddenly seem to glitch.
And your reaction in these moments can mean the difference between wiping out… or living to trade another day.
Nothing in the market goes up or down in a straight line. So today, I want to show how to get things back on track…
Start Fresh
Even the most experienced market veterans go through rough patches. I’ve been through plenty in my over 40-year career.
Even so, my hedge fund was ranked in the top 1% of hedge funds by Barron’s multiple times.
And after enjoying one of my most lucrative starts to the year, I’ve recently experienced some bumpiness.
But rather than let the frustration get the better of me, the best course is to take a step back.
That goes against human emotions… When things go against us, we want to double our efforts… to work even harder, trade more, and get ourselves back on track.
But it’s often better to wipe the slate clean.
In my career, I would often close out all my positions and start fresh. Trying to ride out trades that aren’t working is frustrating.
But it can also become a distraction, leading you to miss out on more promising trades. That can cause the negative cycle to spiral even further out of control…
So, if I went through a rough period, the first thing I’d do is reduce my trade size. Often, that meant halving the size of my position. And if that didn’t work, then halve that position size again.
The moment I was down by 2.5% in any month, I would cut all my positions and start over the following day.
You can always build things up when the cycle turns and you start to regularly bank profits again.
That leads me to my next piece of advice…
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Each week, Market Wizard Larry Benedict goes live to share his thoughts on what’s impacting the markets. Whether you’re a novice or expert trader, you won’t want to miss Larry’s insights and analysis. Even better, it’s free to watch. Simply visit tradingwithlarry.com at 8:30 a.m. ET, Monday through Thursday, to catch the latest. Follow us on YouTube to catch any episodes you missed. |
Fine-Tuning Your Strategy
When trading gets challenging, you can also fine-tune your strategy.
You can tighten your trade entry criteria. Or you might adjust (tighten) your stop losses. Likewise, rather than letting your trades run, you can bank your profits earlier. That gets you into the habit of making money.
Plus, if you like to trade several different markets or stocks, you might cut that back to just one – the market where you’ve performed the best.
Perhaps the biggest thing to remember is this: You don’t have to trade. If things don’t make any sense, then you can sit on the sidelines. That prevents you from running through the funds in your account with uncertain trades.
Here’s the reality…
You’ll inevitably go through some tough times as a trader. The cycle will repeat throughout your trading career. But you can’t let a rough patch put you out of the game.
Instead, identify when things aren’t working as soon as you can. Then take a step back.
That’s the way to preserve your capital… avoid frustration… and ultimately get back on the path to consistent profits.
Happy Trading,
Larry Benedict
Editor, Trading With Larry Benedict
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