Managing Editor’s Note: It may be hard to believe that quant Jason Bodner could create a system capable of spotting the next Nvidia or Palantir.
But Jeff Brown saw the proof. That’s why the two of them are sitting down tonight at 8 p.m. ET.
They’re going to show how this system could have led you to Palantir before it shot up 1,921%… Super Micro Computer before it soared as high as 1,940%… And even Nvidia before it soared as high as 12,507%…
Best of all, Jason has agreed to share the name of his top buy. So has Jeff. And they believe if you put some money in these names before early March, you could see some of the biggest gains yet.
If you haven’t RSVP’d yet… just follow this link to add your name to the guest list with one click.
Retail traders have so much information at hand.
Financial reports, company earnings, geopolitical headlines, economic data… We have it instantly at our fingertips.
What was once only available to big institutions is now widely disseminated to regular folks.
All that information is useful to retail traders. But it can also become a trap…
You may react impulsively to the latest headline… but get sucked into a false move. Or you might be tempted to chase every possible move, churning through your limited capital.
And here’s the tricky thing: It’s not the market’s first reaction that typically counts…
We’ve all seen companies comfortably beat earnings expectations. But then the stock tanks on the news. It seems irrational on the face of it.
Yet traders may have factored in that the stock would do well, so they already bought in anticipation. For them, the positive news simply confirms that they were right, so they lock in profits.
Or we might see an inflation print that is higher than the previous month’s data. Stocks should drop in anticipation of interest rates potentially moving higher, right?
Yet the inflation print may still be lower than the market expected, so stocks rally in hopes that a rate increase is less likely.
In these kinds of cases, folks who trade too soon after a big release could find themselves on the wrong side of the trade.
In fact, the price reaction to big news can be more important than the news itself.
That’s why professional traders watch closely to learn how the market is positioning itself before, during, and after an event. Trading against major money flows is a surefire way to lose out…
Warnings aside, you don’t have to give big economic releases or other major events a total miss. But you do need to trade them smarter.
Think about who (and what) you are competing against… These days, high-powered algorithms react within milliseconds, initiating and/or closing out multiple positions. That near-instant action feeds on itself as algos react to each other.
By the time you’ve read and processed the data, you’re already behind.
The other factor you need to consider is that volume often dries up around announcements. No one, especially big institutions, wants to be caught on their back foot. Many big-money players pull their bids and offers before a scheduled release. That lack of liquidity can distort prices, exacerbating bad trades.
There can also be a mass-selling event – for example, when a stock breaches a significant stop loss level. Option market makers have to quickly adjust their books. These types of reactions can send short-term shocks through the market.
So the next time an important piece of information is released, don’t impulsively jump on the news. Try sitting on the sidelines until the initial reaction subsides.
Wait to see how the price reacts to key levels… and keep a close eye on volume levels.
If you can identify a strong setup at that point – such as a clear swing in momentum – then you’ve greatly improved the odds of your trade paying off.
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.
