{"id":21972,"date":"2024-07-11T07:30:14","date_gmt":"2024-07-11T11:30:14","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=21972"},"modified":"2024-07-11T07:30:14","modified_gmt":"2024-07-11T11:30:14","slug":"why-you-shouldnt-look-for-the-next-nvidia","status":"publish","type":"post","link":"https:\/\/stage.jeffclarktrader.com\/market-minute\/why-you-shouldnt-look-for-the-next-nvidia\/","title":{"rendered":"Why You Shouldn\u2019t Look for the Next Nvidia"},"content":{"rendered":"

Managing Editor’s Note: <\/strong>Today, we’re handing it over to colleague Larry Benedict – a market wizard and legendary hedge fund manager.<\/p>\n

Today, Larry shares how only searching for the biggest wins may not benefit you as a trader, and a better strategy to book profits…<\/p>\n

Here’s Larry…<\/p>\n

\n

Ever bought into a stock right before it tanks?<\/p>\n

Or perhaps you’ve sold out of a stock just before it goes on a massive rally. Like Nvidia, for example, which has almost tripled since the start of the year.<\/p>\n

Chances are if you’ve been around the markets long enough, you’ve experienced both scenarios.<\/p>\n

It sure can mess with your head. And leave you totally frustrated.<\/p>\n

Especially if you play out the trade over and over again in your mind.<\/p>\n

And while you’re kicking yourself about the previous trade, you’re likely missing out on plenty of other trades.<\/p>\n

Learning to put a line under a trade (whatever the result) and quickly move on is key to making it as a trader.<\/p>\n

And it’s something I learned the hard way.<\/p>\n

So today, I want to share how a shift in my approach to trading led to life-changing gains.<\/p>\n

And ultimately saw me go onto great success, with Barron’s<\/em> rating my hedge fund in the top 1% multiple times.<\/p>\n

It also saw me featured in Jack Schwager’s Hedge Fund Market Wizards<\/em>. I’m in the chapter right after billionaire Ray Dalio…<\/p>\n

It’s Not About Big Wins<\/h2>\n

See, a common mistake new traders often fall into is thinking that trading is about bagging big gains.<\/p>\n

And that’s the approach I took when I started out trading in the pits of the Chicago Board Options Exchange almost 40 years ago.<\/p>\n

I’d jump from one trade to the next, making outsized bets that had little (if any) chance of succeeding.<\/p>\n

No prizes for guessing how things panned out…<\/p>\n

I tore right through my trading account multiple times over. And then I had to face the arduous task of starting again… and again.<\/p>\n

What I didn’t appreciate at the time was that those big wins don’t come around often. For every Nvidia, there are countless other stocks that do practically nothing at all.<\/p>\n

The problem is that if you keep looking for the next Nvidia, you’ll miss other less exciting but still profitable trades.<\/p>\n

The way I turned things around was to stop looking for big wins. Instead, I did the opposite…<\/p>\n

I started treating trading as a business where I needed to bank regular gains.<\/p>\n

Take Regular Profits… Whatever the Size<\/h2>\n

By taking regular profits, no matter how small, I got into the habit of trading profitably.<\/p>\n

Whether it was just a $200 or $300 profit to start with, they soon accumulated into something much bigger.<\/p>\n

Before I knew it, I’d banked my first $1,000 winner… and I knew that I was on my way.<\/p>\n

Along with regularly banking profits, I refused to ride any losers. The moment a trade went against me, I exited as fast as I could.<\/p>\n

Whether my trade was profitable or a loser, I put a line under it and moved onto the next trade.<\/p>\n

That way, I wasn’t holding onto any profitable traders longer than I should in the hope of unrealistic gains.<\/p>\n

Nor did I hold onto losses in the hope that things might turn around.<\/p>\n

Instead, I got in the business of regularly making money while immediately capping any losses.<\/p>\n

Do this too, and it might surprise you how quickly things turn around.<\/p>\n

<\/p>\n

\n
\n

Free Trading Resources<\/strong><\/p>\n

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 \u2013 at zero cost to you. Just click here<\/a> to check it out.<\/p>\n<\/p><\/div>\n<\/div>\n

<\/p>\n

Stick to the Basics<\/h2>\n

Hunting for outsized wins might suit some traders…<\/p>\n

The problem is that they don’t know how long it is until the next Nvidia comes along.<\/p>\n

Unless you’ve got a massive account behind you, then it’s too risky to trade that way.<\/p>\n

Instead, I went into the market each day with the mentality that I was going to bank whatever gains I could. And my account slowly but steadily began to build.<\/p>\n

The more profits I banked, the more I could allocate to my next trade. That helped snowball my account to something much larger.<\/p>\n

If you treat trading as a business – and not a casino – you too will likely see your account steadily grow.<\/p>\n

Remember that there are unlimited<\/em> opportunities in the markets to make a profit. What’s more, those opportunities are out there every day<\/em>.<\/p>\n

Happy trading,<\/p>\n

Larry Benedict
Editor, Trading With Larry Benedict<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Learning to put a line under a trade (whatever the result) and quickly move on is key to making it as a trader.<\/p>\n","protected":false},"author":55,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[58],"newsletter-type":[],"ticker":[],"class_list":["post-21972","post","type-post","status-publish","format-standard","hentry","category-uncategorized","publication-market-minute","person-larry-benedict"],"acf":[],"ai_tts_audio_outdated":false,"ai_tts_legacy_post":false,"_links":{"self":[{"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/21972","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/55"}],"replies":[{"embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=21972"}],"version-history":[{"count":0,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/21972\/revisions"}],"wp:attachment":[{"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=21972"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=21972"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=21972"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=21972"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=21972"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=21972"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/stage.jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=21972"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}