You’ll Miss Out if You’re Always Waiting for the “Next Big Trade”

[The Bleeding Edge]( Colin’s Note: This essay from our colleague – Market Wizard and renowned trader Larry Benedict – caught our eye… Traders like Larry make their best gains on massive swings in the markets – the soaring highs and plummeting lows. And the higher the highs… the lower the lows… the better the profit opportunities. Unfortunately, that means a lot of overeager traders are constantly looking for the next major market move… sitting on the sidelines waiting for the next potentially life-changing swing. But today, Larry warns those traders who are constantly waiting for the next big rally or crash. See, when you’re always waiting in the wings for the next big move, you’re missing out on all the market action in between. --------------------------------------------------------------- You’ll Miss Out if You’re Always Waiting for the “Next Big Trade” By Larry Benedict, Editor, Trading With Larry Benedict [Nomi] Most of us have seen interviews where an eager host peppers a hedge fund manager or analyst with questions. Is the market too expensive and headed for a fall? When will this sector or stock rally? How will the market react to the next big event? The hosts know their viewers eagerly want to know (and trade) the hottest stock or sector that could pull in massive profits. However, by focusing on the next big move, viewers often miss out on a lot of market action… and potentially lots of profits. Just Find the Next Trade While some markets run hot, others do very little at all… Often they’ll trade sideways in a range between price levels. But don’t be fooled – a sideways market can provide lots of trades too. In fact, rather than going for big swings like other traders do, my focus is on the sideways markets. My goal is simply to generate lots of tiny profits. By doing this regularly, these smaller profits can add up to something much bigger. It’s actually how I built myself up as a trader. Instead of forming a view about a sector or the broader market, I simply focused on finding the next trade. In other words, my only “view” was about the potential success of that next trade. If you want to make it as a trader, I can’t emphasize enough how important this distinction is. For example, even if a share price is trending down, I look to trade any short-term bounce that goes against the overall downtrend. And vice versa. By doing so, you can use your capital much more efficiently to generate healthy returns. So, instead of going for one trade and hoping for a 100% return – which will have less chance of paying off – I focus on trying to generate multiple 10% returns. While that might seem like “chump change” compared to a multidigit return, there’s a much higher chance of achieving it. Do that a handful of times in one market over a year, and each 10% return soon jumps up to something much more exciting… Do that across multiple stocks or sectors, and those returns grow even more. It’s this simple approach you need to consider when trading. Substantial Profits Over Time When starting out, so many traders keep looking for the next big thing. I know that’s what I did… and it cost me my trading account several times over. However, once I figured out how to trade by aiming for lots of little profits, I was able to swing things around. Not only did my account grow, but it also launched my career as a professional trader. For those who like to hold “views” on a stock or sector, what they are really talking about is capturing long-term trends. And for traders with lots of time and capital, it might be the right way to go. But by scoping out lots of little trades every week (or every day), you’ll build up substantial profits over time. More importantly, you’ll develop the habits that’ll truly enable you to make it as a trader. Regards, Larry Benedict Editor, Trading With Larry Benedict --------------------------------------------------------------- Like what you’re reading? Send your thoughts to feedback@brownstoneresearch.com. [Brownstone Research]( Brownstone Research 55 NE 5th Avenue, Delray Beach, FL 33483 [www.brownstoneresearch.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. Brownstone Research welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. To contact Customer Service, call toll free Domestic/International: 1-888-512-0726, Mon–Fri, 9am–7pm ET, or email us [here](mailto:memberservices@brownstoneresearch.com). © 2024 Brownstone Research. All rights reserved. Any reproduction, copying, or redistribution of our content, in whole or in part, is prohibited without written permission from Brownstone Research. [Privacy Policy]( | [Terms of Use](