Two Simple Concepts That’ll Bank You More Profits

[Trading With Larry Benedict]( Two Simple Concepts That’ll Bank You More Profits By Larry Benedict, editor, Trading With Larry Benedict With today’s volatile markets, it’s hard deciding what you should do. If you sit on the sidelines, you could miss out on some good opportunities. But if you jump into the wrong trade, you could easily tear a big hole in your account. However, the key is to focus on each potential trade in isolation… and avoid getting caught up in your emotions. That means we only enter trades with strong technical setups. And just as importantly, we take our profits when we see them. Because what might start out as a profitable trade can quickly turn into a loser. Today, I’m going to show how I used this approach with my options advisory, The Opportunistic Trader, to generate an average return of 83% on Roblox (RBLX) in just a few days. To begin, let’s look at RBLX’s chart… Roblox (RBLX) [Image] Source: eSignal You can see RBLX is in a downtrend. The 50-day moving average (MA – blue line) trended down all year. Plus, the 10-day MA (red line) has been tracking below it (a bearish signal). The Relative Strength Index (RSI) has also shown bearish sentiment… [Trading Millionaire Reveals, “2008 Was My Most Profitable Year”]( Right from late 2021 until recently, the RSI was tracking in the lower half of its range (below the green line). This is a common pattern when a stock or index is trending lower. However, the chart also shows several countertrends against the overall downtrend. And it’s these countermoves that often provide a strong setup for a long trade. Throughout this year, RBLX’s share price bounced each time the RSI formed a ‘V’ (red circles) out of oversold territory (lower grey dashed line). Take another look… Roblox (RBLX) [Image] Source: eSignal So when a similar pattern emerged in May, we readied ourselves for a trade. As the RSI formed a ‘V’ and began rallying higher from oversold territory, we entered a long RBLX trade on May 11 by buying a call option (which typically increases when a stock price rises.) After RBLX rallied strongly the next day, we sold out half of our position (Exit 1) for a near 52% gain. Then, when RBLX rallied even higher on May 13, we sold out the remaining half of our position (Exit 2) for a 114% profit. That made for a blended gain of 83% within just a couple of days. 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. As always, I want to be clear that we generated this return using options. If we had bought the stock instead, our returns would have been far lower. However, this scenario highlights the importance of using a strong trade setup and of taking our profits when we see them – to make money out of these volatile markets. As I wrote in our [Apple (AAPL) trade analysis]( we need to remember that we’re not hunting down huge counter-swing trades. Nor are we trying to work out where a stock is going to be weeks or months from now. Instead, we aim to find stocks that have run too far in one direction and profit whenever they revert to their mean. Regards, Larry Benedict Editor, Trading With Larry Benedict Reader Mailbag How will you apply these two concepts to your future trades? Let us know at feedback@opportunistictrader.com. IN CASE YOU MISSED IT… [Woman Who Predicted 2008 Crash Issues New Warning]( If your brokerage account looks like a sea of red in 2022, pay close attention because, according to former Goldman Sachs executive and PhD Nomi Prins, things are about to get a lot worse for those who don’t prepare. After predicting the 2008 financial crisis, she’s issuing a new warning about an event that could trigger a $4 trillion market shock as early as August. [Click here to see the details and prepare now.]( [image]( --------------------------------------------------------------- Get Instant Access Click to read these free reports and automatically sign up for daily research. [The Gold Investor’s Guide]( [An Insider’s Guide to Making a Fortune from Small Tech Stocks]( [The Ultimate Guide to Taking Back Your Privacy]( [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). © 2022 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](