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Bull markets can teach many bad habits… like letting your portfolio get out of control.
It’s an easy trap to fall into when stocks are rising. Even second- and third-tier stocks get pulled along for the ride and tempt you to buy.
The problem arises when the market goes through a nasty shakeout.
Suddenly, you’re left holding a bunch of hurting positions. You may not remember why you opened them in the first place, but now you have to work out which to cull.
So despite being painful, a shaky market can be a good reminder about the need to ruthlessly manage your portfolio…
Tightly Managed
As volatility has increased, I’ve been keeping a tight hold on my trading. And that discipline has paid off handsomely for my subscribers.
We’ve kept our portfolios extremely manageable… and profitable.
Just one of our Opportunistic Trader trades at the peak of the volatility last week gave us a 72.3% gain in a single day. Some subscribers did even better:
Larry: Bought 3 sh for 733.36 & sold for 2257.62. A great trade for me – thank you very much.
– Earl W.
I got in a little late but bought closer to the strike. This proved fruitful getting out with a 117% gain.
– Peter K.
Hi Larry. I did very well on the 0DTE QQQ trade. 71.6%. I entered the trade on your alert on Tuesday. I exited the trade just before I received your alert on Wednesday.
– David W.
Since then, we’ve closed out more trades for 25.6%, 10.6%, 9.7%, 22.6%, and 22.1% gains. (And to be clear, we didn’t take any losses over the past week.)
After banking those wins in The Opportunistic Trader, we have just one position open as of this writing.
It doesn’t mean we’re taking our foot off the accelerator, mind you…
Our small portfolio simply illustrates how we’re putting our capital to work. We’re using quick trades to extract as much profit as we can from the volatility. When we see a gain, we snap it up.
Because when volatility is on the rise, that’s when we can get to work…
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Free Trading Resources Have you checked out Larry’s free trading resources on his website? It contains a full trading glossary to help kickstart your trading career – at zero cost to you. Just click here to check it out. |
Working Your Capital
For some, a 10.6% or 9.7% gain might not be enough to get excited…
Of course, a big win is always welcome…
But all these 10%, 20%, or 30% gains add up. They can become the driving force in snowballing your account into something much bigger over time.
We’re also happy to keep using the same stock over and over again.
For example, we’ve traded Tesla (TSLA) up and down this year. In addition to our recent 10.6% profit, we’ve generated wins of 23.0%, 3.5%, and 23.1% so far this year.
That kind of action – with trades often turning around in just a few days – is far more valuable over the long run than sitting and waiting for a big winner.
If you can keep chopping regular returns out of the market, you’re going to end up in a much better spot.
We all have a limited amount of capital at our disposal. We don’t want to keep it tied up in lots of positions going nowhere.
So focus on your risk management. But also stay vigilant in managing your portfolio, especially with volatility on the rise.
Make sure you have a clear reason for holding every position in your portfolio. Dispassionately discard those that no longer suit. And take your gains quickly when you see them.
Regards,
Larry Benedict
Editor, Trading With Larry Benedict