We’re not even a quarter of the way through 2026, and it’s already been a tough year for investors…
The artificial intelligence (AI) trade – the driving force of the more than three-year rally – has started to unravel. High-flyers like Palantir (PLTR) and Oracle (ORCL) have come crashing back to earth.
On top of that, markets are dealing with a broad range of geopolitical concerns. From events in Venezuela to the ongoing war in Ukraine and President Trump’s talk of “taking” Greenland… there’s been a lot to process – even before the current hostilities in the Middle East. The U.S. has no clear exit ramp from that messy situation.
Many investors simply throw their hands up in the air. The moves are unpredictable enough that they’d rather sit out until order returns.
But my advice is to adjust your strategy to suit the times instead…
We’ve been in a runaway bull market for the past several years. Any brief dip was followed by yet another rally. That made “buying the dip” a no-brainer strategy.
Yet bull markets can be incredibly forgiving… right until they’re not. That’s why so many investors are struggling this year. Anyone who got used to buying the dip is still holding tight in anticipation of a strong recovery. But holding on in hope is not a winning strategy when the stock market gets choppy.
Likewise, investors often spread themselves too thin during bull markets. They enter any trade that seems mildly promising, filling their portfolio with an array of bets. And again, when everything is going up, that may not seem crazy.
As soon as markets get more erratic, though, keeping on top of all those positions becomes problematic. There’s just too much information to manage them all effectively. In chaotic markets, stocks can reverse quickly. Before you have time to act, a once-promising trade can suddenly turn into a loser.
That’s why specializing is key. Start by concentrating on a single stock to learn its patterns and idiosyncrasies. You’ll be able to start banking your gains by the time others are just trying to get in on the action…
When markets become more chaotic, you also need to reduce your trade size. It can only take a small piece of negative news for a stock to gap lower.
And if you’re trading a bigger size than you should, the trade becomes emotionally draining – you’ve got too much riding on the outcome. Losses can feel devastating.
Additionally, manage your expectations. What might work consistently in a trending market no longer applies when markets are swinging all over the place. So if you’re holding out for a big win, you may watch your gain turn into a loss. On the flip side, if you’re just trying to take small gains here and there, you can be much more nimble.
You also want to make sure you’re able to trade both directions… Just as sharp rallies can lead to sell-offs, sharp sell-offs can lead to bounces. If your strategy only allows you to profit if stocks go up, then you’re missing out on half the opportunities.
Worse, in a prolonged down move, a long-only strategy can turn into a string of losses that can put you out of the game.
That’s why, for over 40 years, I’ve used an options strategy that enables me to profit no matter which direction the market takes.
And this strategy is primed for the current volatility we’re seeing…
With this strategy, I focus on trading just one ticker. Throughout the week, we’ll enter a trade – typically before 11 a.m. ET. And by market close, we already know how the trade played out. That lets us bank any wins right away… and we don’t have to wonder what news headlines will break overnight and throw our trade off course.
I’ve used this same ticker and strategy successfully for decades. And given all the turmoil unfolding in the market right now, I want to share with you how I put this strategy into action.
That’s why I hope you’ll attend my AI Chaos to Cash event this Thursday at 2 p.m. ET. It’s free, so just click here to automatically add your name to the guest list.
And if you sign up as a VIP, you’ll also receive my AI forecast for the year ahead, along with two specific recommendations – one potential buying opportunity… and one to avoid.
So please join me on Thursday for all the details on how to trade the growing chaos in the markets in 2026.
Happy Trading,
Larry Benedict
Editor, Trading With Larry Benedict
Reading Trading With Larry Benedict will allow you to take a look into the mind of one of the market’s greatest traders. You’ll be able to recognize and take advantage of trends in the market in no time.
