Larry’s Note: The Federal Reserve and President Trump could help you double your money – just days from now.

The upcoming Fed meeting is already moving the markets. But that’s just the beginning.

The Fed and President Trump are about to create a big market opportunity – and you could bring home incredible gains if you act before the next meeting.

I’ll share the details at my Fed Decision Advance Warning briefing TONIGHT at 8 p.m. ET – including the name of the stock to trade.

Please plan to join me then. All you have to do is RSVP right here with one click.

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One of the factors that led to success in my trading career is the way I’ve managed my profit and loss (P&L) account.

And a key part of that is scaling my trades…

When I’m steadily growing my account, I can build up the number of contracts I trade. On the other hand, I reduce them if I’m going through a bit of a rough patch.

Put simply, I aim to use my profits to judge my position sizes.

But you can also put your open trades to work, as long as you keep an eye on your risk management.

So let’s dive in to see how it works…

Managing Your Trading Book

As you develop as a trader, the number of positions you trade may grow. You could end up with a dozen or more open positions at any one time.

But it’s unlikely that all these positions in your “trading book” will be heading in the same direction.

While some will be in the green, others will be down money or flat. And how you manage these trades is critical to your success.

I always closely monitor the profit or loss on each trade. But I also keep watch on the P&L of the whole account. I know exactly how far ahead (or behind) I am overall.

This gives me some leeway. If I’m sitting on good profits, I can give my losing trades more time to play out. Often these went my way, allowing me to snag some outsized profits.

To be clear, I wouldn’t override a hard stop level on an individual trade.

But if a trade was hanging in the balance and I still believed an anticipated move would come, the big picture view of my account gave me the luxury of giving these trades some room.

But I had to remain convinced of the merits of the trade. If not, then I needed to cut the position and move on to the next trade…

Tune in to Trading With Larry Live Each week, Market Wizard Larry Benedict goes live to share his thoughts on what’s impacting the markets. Whether you’re a novice or expert trader, you won’t want to miss Larry’s insights and analysis. Even better, it’s free to watch. Simply visit us on YouTube at 8:30 a.m. ET, Monday through Thursday, to catch the latest.

To Keep or Cull?

Trading with “house money” like this can add flexibility to your trading. However, it doesn’t mean you can get lax with your risk management.

A hard stop is a stop. You can’t let a small loss on an individual trade blow up to something much bigger.

And if a trade is stuck in a sideways range, you need to decide if your money can be put to better use elsewhere. There are always new promising trades coming down the pipe.

But more than anything else, you must closely monitor your profitable positions. They’re effectively financing your losing trades. So if those profits evaporate into thin air without your losing trades turning around, you’re facing a double hit to your trading account.

That said, using “active” P&L from open positions can enable you to keep positions open that you otherwise would have culled.

And over my career, that tactic has allowed me to bank profits that I would have otherwise missed.

So as long as you maintain good risk management, this can be a worthwhile technique for managing your trading account.

Happy Trading,

Larry Benedict
Editor, Trading With Larry Benedict

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