In all the noise, sometimes it’s hard to tell who to listen to.
Many pundits fill the airwaves and newspapers with stories of economic woe… Others shout reasons to “buy the dip” or recommend the perfect allotment of growth vs. value in your portfolio.
I don’t pay attention to any of it, though.
I’ve been a trader for over 35 years… and my own experience has taught me what signs to pay attention to and what to ignore.
That’s how my hedge fund made $95 million in 2008 – the same year most of the market was falling to pieces after the subprime mortgage crisis.
And while outright perfection is impossible, my methodology enabled me to go without a single losing year for a straight 20-year stretch.
These days, of course, I run several trading advisories for regular folks… and last year, each of my services ended up well in the green by double and triple digits – whereas the broad indexes fell anywhere from 20–30%.
I don’t share this to brag. I just want to help you understand that I know what I’m talking about… and why you should pay attention to what I’m about to tell you next…
There are 32 “money shocks” that will happen this year. And even if you don’t trade any other days this year, it would be a mistake to miss a single one of these shocks.
Higher Volatility, Faster Wins
There’s one important concept for traders to understand.
Higher volatility gives you better odds of making winning trades faster.
Think about it – if prices never moved, then you’d have zero chance of making money. But when price swings happen more frequently… or more dramatically… then you can find more opportunities to trade on those price movements.
Now, it can also increase risk from positions moving against you. But as long as you have a strong risk management policy, you can make sure the risk-reward tradeoff stays in your favor.
Ultimately, I thrive in moments of high volatility. And that’s why the 32 “money shocks” I mentioned above caught my eye.
Because in each instance, normal market volatility gets cranked up.
In rough numbers, the stock market’s average daily move runs around +/- 0.73%, considering all the years going back to 1928. So any moves greater than that – up or down – show higher volatility.
Last November, on a “money shock” day, we got a perfect example of this – the market rallied 5.5% in a day. And of course, when the market rallies by that much… individual stocks can go even further.
On this occasion, Apple (AAPL) surged over 8%. Maybe that doesn’t sound like much on the surface… but its average daily move is just 0.11%.
That’s why I say, if you’re going to trade anytime this year… make sure not to ignore these money shocks.
So I’m sure you’re wondering by now… What are these “money shocks”?
Over the past year, most of us have been paying more attention to inflation and interest rates.
After all, we’re feeling the pinch every time we have to pull out our wallet.
But outside of how these numbers personally impact us, they play an even more important role for traders.
Namely, they cause surges in market activity… a “money shock.”
So on days when the Fed is holding a key meeting… or the government is releasing important information about the economy, we have boosted chances for trading and higher profits.
Even more critically, these money shocks are getting bigger and more lucrative in our current environment – partly because these kinds of data releases are drawing more attention than they have in over a decade.
(As just one example… Were you paying attention to inflation before last year? I’d bet most people weren’t. But just think how many news headlines mention inflation these days…)
And the macro environment we’re in now means we can’t afford to let these days slip off our radar.
I’ve identified 32 of these kinds of events that we won’t want to miss in 2023… including one of them that’s happening just around the corner.
And I’d like to tell you the best way to trade these money shocks.
That’s why I’m putting together a “money shock calendar” to help you know which days have this heightened potential.
And tomorrow, at 8 p.m. ET, I’ll explain exactly what makes each of these days so important… and the way I play these opportunities.
I’ll also make an offer I never have before.
So please plan to join me tomorrow night… You can go right here to RSVP with a single click.
Editor, Trading With Larry Benedict