For a Trader, It’s Often the Small Profits That Count

[Trading With Larry Benedict]( For a Trader, It’s Often the Small Profits That Count By Larry Benedict, editor, Trading With Larry Benedict When folks read about trading stories, what they really want to hear about are eye-popping gains… About entering a trade and exiting it a short time later, picking up double- or triple-digit returns along the way. Those kinds of profits do come around. For example, in The Opportunistic Trader, we’ve bagged returns including 58.2%, 73.8%, and 113.3% in just the last month. But the truth is, these types of gains can be rare… That’s because you can only make the profits the market lets you. Sometimes those anticipated big moves simply flare out. That’s why instead of focusing on chasing big returns, I scour the market for regular, small gains. Doing so has been a cornerstone of my trading career. Now, I know for some that might sound counterintuitive. Especially for someone like me who has successfully run a big hedge fund. But by regularly banking all those small profits, they snowballed into something much bigger. That’s why Barron’s ranked my fund in the top 1% in 2008, 2009, and 2010. And as I’ll explain, the premise behind these small trades is simple… Recommended Link [Must-See: Elon’s New Invention is Absolutely Insane]( [image]( When you [click here and see what Elon Musk’s new invention does…]( And how it works… You will NOT believe it. You’ll tell yourself this is just science fiction. But Elon just tested this in a real human… And the result was mind-blowing. [Click here to see it.]( -- Profiting From Ordinary Moves See, for every move that produces an outsized gain, there are countless more that are just… ordinary. These are the sort of moves that when most folks look at a price chart, they’d barely notice them at all. But even these small moves can still provide plenty of profit opportunity… Just like a trade we did recently (through The Opportunistic Trader) on crypto exchange Coinbase Global (COIN). All up, it generated an 18% return in just a single day. Having rallied around 300% from its October 2023 low, COIN topped out on March 25. That’s “A” on the chart below. Despite an earnings beat, it then retreated right through to May… Coinbase Global (COIN) Source: eSignal [(Click here to expand image)]( Throughout this period, however, it tested and held a key support level (horizontal orange line)… These levels are something I watch closely. That’s because when a price tests and holds that level (as it did here), that can set up a potential bounce. And a potential trade… COIN later retraced from a lower high at “B” in June and was closing in on that $200 level. And there was a good chance that buyers would come in and support it around that level. That’s what put COIN on my radar. But I was also watching something else… Bitcoin. Given that it’s a crypto exchange, COIN tracks the Bitcoin price closely. For example, when Bitcoin is rallying, that will pull more buyers into the market. And that drives COIN’s revenues (and stock price) higher. Bitcoin’s sell-off in June became overstretched. So a rebound in Bitcoin would likely offer a boost to COIN’s stock price. Then we saw momentum reverse higher (black arrow), as shown by the Relative Strength Index (RSI) in the bottom half of the chart. So we bought a call option on June 24 to capture any potential bounce. A call option increases in value when the underlying stock (in this case COIN) rallies. And as the chart shows, we got our timing exactly right… With COIN rebounding higher, we decided to bank our profits. And we exited our position just one day later for an 18% gain. Compare that to the S&P 500, which has averaged around a 12.1% annual return since 1926. We generated more than that with our COIN trade in 24 hours. 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. Know and Understand Your Risks As always, we need to be clear that options amplify both gains and losses… And because options have an expiry date, time decay is constantly eating away at the option’s value. Meaning that if the trade doesn’t go your way, the option can expire worthless. Though you can always close the trade out before expiration. But that’s the risk you take. Also, remember that when you buy an option, the most you risk is the premium you pay for that option. As this trade shows, though, options can leverage an even mild one-day reversal to generate a very handy return. If you only concentrate on looking for big moves, then you’re missing out on a big part of the action. The key to banking regular profits is to search out for price reversals (whatever size), like in our COIN trade. And look to bank those profits quickly. Happy trading, Larry Benedict Editor, Trading With Larry Benedict [The Opportunistic Trader]( The Opportunistic Trader 55 NE 5th Avenue, Delray Beach, FL 33483 [www.opportunistictrader.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](. The Opportunistic 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: 1-888-208-6550, Mon–Fri, 9am–5pm ET, or email us [here](mailto:feedback@opportunistictrader.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](