2025 has been more dramatic than any year I can remember.
Stocks sold off sharply from mid-February to March. Then, after a brief respite, they tanked heavily in April when “Liberation Day” tariffs were announced.
From there, the market made a sharp U-turn… and proceeded to make a succession of all-time highs. I haven’t seen such a massive, post-plunge rebound in my lifetime.
That’s made it a frustrating year. After a number of winning trades during the downturn, we missed much of the recovery. And I’m sure I’m not alone in seeing missed setups in the rearview mirror.
But the simple truth is that even the best traders miss out on opportunities. And they don’t make money all the time.
Yet that truth can be one of the hardest for traders to accept…
Not every trade goes right. Sometimes, positions don’t go your way.
That’s true even for someone like me, who managed nearly a billion dollars at my hedge fund.
To be clear, I went 20 years without a losing year – a massive winning streak that led to me being featured in Jack Schwager’s Hedge Fund Market Wizards. That’s a nearly unheard-of feat. During that time, I made over a million dollars on trades more than 500 times.
Yet despite that success, I go through losing periods like everyone else.
The tough part of those periods was when a new investor had just joined the fund. They’d ring up and demand to know what was going on.
But it comes down to timing.
Those with me long-term knew there would be some down weeks (or even months) in any given year. But ultimately, we finished the year ahead. They knew to stay patient.
The key was to stick to my strategy and keep grinding it out.
When you miss a move or suffer a series of losses, you can start second-guessing yourself. But another simple fact about the markets is that no strategy works all the time.
What matters is the overall trend. With enough trades over time, I know my strategy comes out ahead. So we need to just keep putting that strategy to work and let the percentages take care of themselves.
In the meantime, be a stickler for trading the correct position size as part of your risk management strategy. If you’re sweating every trade, you’re likely trading too big a position. Don’t risk letting one or two bad trades take a massive bite out of your account.
You can use stop losses too. Treat these as non-negotiable hard lines. There’s no wiggle room or giving the trade “a little more time.”
If you follow good risk management, then you will eventually see the light at the end of the tunnel.
Every trader goes through lean periods… It’s simply part of trading. No one can make money all the time. The trick to surviving and prospering long-term is to accept that… and ensure that no loss is big enough to blow up your trading account.
That way, you’ll be ready to bank some serious gains when your trading results swing back the other way.
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.
