Larry’s Note: I’ll keep this quick… The recommendations in one of my services have beat the S&P 500 by 4.6X every year for almost five years on an annualized basis.

Even better… Profits are paid out almost daily. No buying and holding.

Today at 2 p.m. ET, I’m going to reveal how it works at my 12 Months to Retirement event.

It would mean a lot if you’d attend. You can automatically RSVP right here.

---

The market is defying logic right now…

Stocks are trading at sky-high valuations that will never be justified by real earnings. Plus, the jobs market is slowing, indicating a struggling economy – right as inflation is ratcheting higher.

It’s a sure sign that stagflation is steadily enveloping the economy.

Yet against that backdrop – and in the midst of a government shutdown that could take weeks to play out – folks keep bidding the market higher.

What’s more, those same people are showing no signs of selling, despite having serious profits. They want to ride their winners forever.

Yet I fear many could see those profits evaporate into thin air…

A Market Bubble Is Growing

I’ve seen this type of euphoria in markets many times before. It never ends well.

However, what makes the present circumstances different from other bubbles I’ve seen is the extreme level of complacency. No one wants to take a profit… even if they’re sitting on double- or triple-digit gains.

The old maxim of markets “climbing a wall of worry” is just another notion from the past.

Whether they’re avoiding taxes on capital gains or simply prey to “fear of missing out,” investors simply won’t sell.

But learning to bank profits is critical to your success.

Most folks are familiar with stop losses. They provide a clear-cut exit at a predefined level. They can help avoid manageable losses from turning into something much bigger.

But when a trade turns into a big winner, those same people often have no plan for when to exit. And that can be a huge mistake…

Tune in to Trading With Larry Live 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 us on YouTube at 8:30 a.m. ET, Monday through Thursday, to catch the latest.

Learn to Take Profits

As a trader, you must learn to take your profits – even if it means you might leave money on the table.

Missing out on even bigger gains can be immensely frustrating. But it’s nothing compared to watching a handsome profit turn into a loser. That can really mess with your head.

Do you hang on in the hope that the market comes back your way? Or do you simply close out your previously profitable position for a loss?

This distracts you from other potential trades. It can also tie up your capital in a trade going nowhere.

I’ve never been afraid to take profits. I see each profitable trade as another run on the board – a steady way to build my profit and loss (P&L) tally.

But I’ve seen countless folks incinerate their money by getting greedy.

So in practical terms, how do you decide when to sell?

You could choose to exit on a fixed percentage gain (25% or 50%, for example). Or you can simply use a time-based exit to keep your capital moving to the next best opportunity.

After banking profits, you can always reenter a trade if the right setup occurs. But no one has the luxury of watching a profit turn into a loss.

While it’s easy to focus on when to enter a trade, remember that a trade isn’t done until you sell. You must have a clearly defined exit – both for losses and gains.

If you don’t follow this simple yet crucial advice, you’re going to be kicking yourself when this market inevitably rolls over.

Happy Trading,

Larry Benedict
Editor, Trading With Larry Benedict

Reader Mailbag

Have something to share with Larry? Write in with your thoughts to feedback@opportunistictrader.com.

Hi Larry, thank you for pointing out and describing your perspective when nobody will sell in this market. I listened and I heard you loud and clear. In my trading account, I bought $75K worth of stocks in early July. I sold all stocks last Friday and put a nice big $15K P on the page. It felt great to bank a realized profit instead of just watching my account yo yo.

So now you have to say, “Nobody will sell in this market – except my wise subscribers!!”

I am sincerely grateful to you and to Eric.

Peace,

Kim O.

Hi Larry, not a question but a comment. I watched the YouTube video “Words of Rizdom” and wanted to thank you for mentioning this, as it offered some great insights into the psychology of trading that you learned the hard way trading on the floor. An honest and insightful interview. A long-time retail trader who is still learning, thanks!

– Paul K.

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.