Stock market crashes are tough on everyday investors. For all the years waiting for gains to build up… they can evaporate in a matter of weeks, without warning.
Of course, you don’t need to hear that from me. The market crash in late March was the fastest decline from an all-time high ever. The S&P 500 lost nearly half of its value in a little under a month.
It caught people off guard. And, a lot of folks are now worse off for it.
Retirement accounts are suddenly a lot smaller than they were… and investors who got in during the “panic buying” stage in February are now sitting on substantial losses.
Here’s the thing… it doesn’t have to be this way. While many fortunes are
lost in market crises, many more fortunes can be made in the aftermath.
Some of my best trading years were during times of extreme market crisis. And if that sounds absurd to you, keep reading. Because I’m going to prove that you can achieve similar results, starting today.
During the lead-up to Black Monday in 1987, I was able to multiply my money 10 times…
Then, in the 2001 tech wreck, my trades resulted in a seven-figure windfall for me and my clients at my former brokerage firm (I sold and closed that firm at the end of September 2007 – which surely qualifies me for some sort of market-timing award).
Longtime readers know how I did in the last financial crisis of 2008. If you’d followed my recommendations back then, you could’ve doubled your money – or more – on 18 different trades.
How is any of this possible? It has to do with three important trading habits that most everyday investors don’t follow…
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Fight the urge to trade with the crowd.
This is far more difficult than it first seems. When the market marches higher and higher each day, it’s uncomfortable to sit on the sidelines and wait for a more profitable entry point. Seeing the gains that other folks are making each day doesn’t help either.
But there’s a big difference between the investor who bought in mid-February and the one who didn’t. The former is praying the market will come back to where it was before the crash. The other is happily buying stocks at a discount…
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Remember that what goes up, must come down.
As soon as it starts seeming like a rally will go on forever, that’s about the time the party ends. Oftentimes, the last legs of an overextended rally are what draw in the least-informed investors, and creates massive losses for them.
Knowing how to recognize these moments is key to finding opportunity in crisis markets. As above, sometimes that means sitting on the sidelines as the rally continues. Accepting that is key to being a responsible trader.
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The best trades are often the toughest ones to make.
I sat out most of the market’s rally in February. And, I told my subscribers to do the same. Though, when the market crashed, I was ready to step in and start buying.
It was uncomfortable. Things were so uncertain, nobody knew how far the market could fall. I had to accept that I might lose money even on the lower entry points I was making. But I knew that it made more sense to buy at those levels than in late February. Today, as I’m sure you realize, buying at the most uncomfortable time for the market wound up being quite profitable.
There’s a specific thread that ties these habits together: learning to control your emotions.
Humans are emotional, irrational beings. The forces of greed and fear constantly pull us one way or another. Learning to recognize and control these emotions, and counteract them, is at the real core of what it means to be a great crisis trader. And, it’s what leads to the kind of gains I mentioned above.
Of course, there’s a lot more specific guidance I give to my subscribers about how to trade in a crisis scenario. All of the above can be boiled down to specific strategies, chart patterns, and technical indicators that give you an edge over most traders and investors.
For that, I created my Crisis Trading Blueprint. It’s a one-stop report that contains everything you need to know to start making huge profits in today’s crisis market.
If buying and holding hasn’t worked for you in the last few years, you’ll want to see what it’s all about.
I just recorded a brand-new presentation with all the details, and you can check it out right here.
Best regards and good trading,
Jeff Clark