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Waiting in a hotel lobby last week, my eyes landed on the large TV screen on the wall.
A coterie of talking heads was speculating about the economy and the markets.
No matter where you are, there’s no shortage of commentators expressing their opinion. They’ll happily tell you what to think about tariffs and the trade war, geopolitical risks, or the health of the U.S. and global economies.
Sure, that commentary adds noise and color to the news cycle…
But no matter how well-informed their comments might be, no one knows how things are going to play out. There are way too many balls up in the air.
The trick is to not get pulled in by all the talk.
The market will do what it’s going to do, no matter what everyone thinks.
So as a trader, here’s what you should do instead…
Shake Off the Influence
The problem with listening to opinions is that they can get into your head. That can influence your trading decisions.
For example, if experts say that the market is going to tank this week, you may find it hard to go against their collective wisdom. You could miss out on excellent trades, as contrary positions can be highly profitable.
Just look at the current market…
On the geopolitical front, there’s the Ukraine war, Russia, Iran, Gaza, and increasing tensions elsewhere. On the economic front, there’s the whole tariff war unfolding primarily against China. And so on.
Plus, President Trump’s attacks against Federal Reserve chair Jerome Powell have added more instability.
We have no way of knowing where things will ultimately land… There’s no way to know the long-term impact on the economy.
But the negative narrative puts weight on the market. That’s even more true as quarterly earnings show a growing number of companies missing their revenue and income targets.
With these negative points and the bearish commentary floating in your head, do you really want to buy stocks?
But if you sit on the sidelines, you’re missing out on the potential action…
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Reading the Tea Leaves
As a trader, you’ve got to ignore the talking heads. Instead, read the tea leaves (so to speak) to see what the market is giving you…
This can be tricky to keep in mind. Occasionally, my subscribers write in to ask things like, “If we’re going into a bear market, why are we buying calls (which profit from a rising stock price)?”
But that’s the thing… If the market should be going down but it’s rising instead, you’ve got to respect what the market is doing. Going against that is a surefire way to tear up your account.
We’re going to enter positions based on what the market is doing… not what we think it ought to do. And we’ll stay flexible.
At some point, all the good (or bad) news gets priced into a stock.
When that happens, it doesn’t take much for stocks to quickly revert the other way. That’s where you need to be to profit in these kinds of moments.
Doing so has enabled my subscribers to pick up double- and triple-digit returns this year when others were reeling from losses. Plenty of those gains have often come against the prevailing market wisdom.
The key is to ignore what all those talking heads are trying to tell you. Let the market action dictate your trades instead.
Regards,
Larry Benedict
Editor, Trading With Larry Benedict
P.S. If you haven’t yet, be sure to get caught up on my chaos trading strategy today…
I shared my prediction for what’s ahead… and why this chaotic market isn’t going away anytime soon. Click here now for all the details before the video goes offline.
Months ago, I warned that the post-election euphoria wouldn’t last. I predicted that tariffs would bite hard. Volatility would surge. Markets would buckle.
That’s exactly what has happened. And it’s why I don’t want you to miss out on my trading strategy for these moments. As I mentioned above, my readers have been bringing in a steady string of double- and triple-digit wins.
What matters is what you do next. Just go right here to watch.