The No. 1 Secret to Making Money in the Markets

What’s the best way to make money in the markets? [Jeff Clark's Market Minute]( Managing Editor’s Note: Today, we’re handing it over to colleague Larry Benedict – a market wizard and legendary hedge fund manager. Today, he’ll share the real secret to ensuring you make money in the markets while minimizing your losses. Here’s Larry… --------------------------------------------------------------- The No. 1 Secret to Making Money in the Markets By Larry Benedict, editor, Trading With Larry Benedict What’s the best way to make money in the markets? Believe me, it’s a question I get all the time. Especially given my profile as one of the traders featured in Jack Schwager’s Hedge Fund Market Wizards. I’m in that book in the chapter just after billionaire Ray Dalio. And my inclusion came off the back of a long winning streak that saw me rack up 20 winning years in a row. What’s more, during my career I made over $1 million on a trade more than 500 times. Of course, when most folks ask about making money, they expect me to reel off a whole lot of technical jargon… Like about key levels on a chart, crossover points in technical indicators, or things like reversals in momentum. And to be fair, these all play a part in my trading. But the single most important thing that made me as a trader was something far simpler than that… It was my strict commitment to risk management. I just hated to lose money. After blowing up multiple accounts and having to start over, I swore that I’d never put myself in that position again. Recommended Link [America’s ‘Silent Invasion’ Is YOUR Town in the Crosshairs?]( [image]( Time is short to prepare. [Click the map to find out what happens next.]( -- Don’t Ride Losers What new traders often miss is that there are countless opportunities in the markets every day. When I ran my hedge fund, I often made hundreds of trades in a day. And with all those trades, I was happy to bank lots of tiny profits. It was the accumulation of all these small winners that snowballed into something much bigger over time. But what I didn’t do (and I was an absolute stickler for this) is that I wouldn’t ride any losers. The moment a trade went against me, I exited it right away. No sulking or “what ifs.” Nor were there any thoughts of “let’s just give it some more time.” Instead, I just closed out any losing trade and moved onto the next one… By doing this over and over, exiting a trade for a small loss became something I did automatically. I never got emotional about it. And that helped stop those small losses turning into something much larger and potentially putting me out of the game. The other thing I did was quickly cut my position size if a series of trades went against me. It would typically only take a 2% drawdown in my account for me to cut my position in half. And if for whatever reason I kept losing, I would either cut that position in half again… or simply switch off my computer and go for a walk. Only when I turned those losses back into profits would I look to go back to trading my original position size. Remember, you never go broke taking a profit. But not taking a loss is a surefire way to blow up your account. I’ve seen this mistake destroy countless trading careers. Free Trading Resources Have you checked out Jeff's free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. Focus on Risk Management First Too many new traders are only interested in the first part of trading. That is, how much money they can make. But the way I see it, they’ve got it backward… Instead, the key thing to ask first is the maximum you’re prepared to lose on any trade. And then to stick to it no matter what. By strictly capping your losses, you’re protecting your capital to keep you in the game long term. Understand this and apply it to your trading. It will surprise you how quickly your profits grow. Regards, Larry Benedict Editor, Trading With Larry Benedict [Jeff Clark's Market Minute]( Jeff Clark Trader 55 NE 5th Avenue, Delray Beach, FL 33483 [www.jeffclarktrader.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](. Jeff Clark Trader 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: 1-800-752-0820, Mon–Fri, 9am–7pm ET, or email us [here](mailto:contactus@jeffclarktrader.com). © 2024 Omnia Research, LLC. All rights reserved. Any reproduction, copying, or redistribution of our content, in whole or in part, is prohibited without written permission from Omnia Research, LLC. [Privacy Policy]( | [Terms of Use](