{"id":21878,"date":"2024-06-12T07:30:03","date_gmt":"2024-06-12T11:30:03","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=21878"},"modified":"2024-06-12T07:30:03","modified_gmt":"2024-06-12T11:30:03","slug":"the-no-1-secret-to-making-money-in-the-markets","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/the-no-1-secret-to-making-money-in-the-markets\/","title":{"rendered":"The No. 1 Secret to Making Money in the Markets"},"content":{"rendered":"

Managing Editor’s Note: <\/strong>Today, we’re handing it over to colleague Larry Benedict – a market wizard and legendary hedge fund manager.<\/p>\n

Today, he’ll share the real secret to ensuring you make money in the markets while minimizing your losses.<\/p>\n

Here’s Larry…<\/p>\n

\n

What’s the best way to make money in the markets?<\/p>\n

Believe me, it’s a question I get all the time.<\/p>\n

Especially given my profile as one of the traders featured in Jack Schwager’s Hedge Fund Market Wizards<\/em>.<\/p>\n

I’m in that book in the chapter just after billionaire Ray Dalio. And my inclusion came off the back of a long winning streak that saw me rack up 20 winning years in a row.<\/p>\n

What’s more, during my career I made over $1 million on a trade more than 500 times.<\/p>\n

Of course, when most folks ask about making money, they expect me to reel off a whole lot of technical jargon…<\/p>\n

Like about key levels on a chart, crossover points in technical indicators, or things like reversals in momentum.<\/p>\n

And to be fair, these all play a part in my trading.<\/p>\n

But the single most important thing that made me as a trader was something far simpler than that…<\/p>\n

It was my strict commitment to risk management. I just hated to lose money.<\/p>\n

After blowing up multiple accounts and having to start over, I swore that I’d never put myself in that position again.<\/p>\n

Don’t Ride Losers<\/h2>\n

What new traders often miss is that there are countless opportunities in the markets every day. When I ran my hedge fund, I often made hundreds<\/em> of trades in a day.<\/p>\n

And with all those trades, I was happy to bank lots of tiny profits. It was the accumulation of all these small winners that snowballed into something much bigger over time.<\/p>\n

But what I didn’t<\/em> do (and I was an absolute stickler for this) is that I wouldn’t ride any losers. The moment a trade went against me, I exited it right away.<\/p>\n

No sulking or “what ifs.” Nor were there any thoughts of “let’s just give it some more time.” Instead, I just closed out any losing trade and moved onto the next one…<\/p>\n

By doing this over and over, exiting a trade for a small loss became something I did automatically. I never got emotional about it.<\/p>\n

And that helped stop those small losses turning into something much larger and potentially putting me out of the game.<\/p>\n

The other thing I did was quickly cut my position size if a series of trades went against me. It would typically only take a 2% drawdown in my account for me to cut my position in half.<\/p>\n

And if for whatever reason I kept losing, I would either cut that position in half again… or simply switch off my computer and go for a walk.<\/p>\n

Only when I turned those losses back into profits would I look to go back to trading my original position size.<\/p>\n

Remember, you never go broke taking a profit. But not taking a loss is a surefire way to blow up your account.<\/p>\n

I’ve seen this mistake destroy countless trading careers.<\/p>\n

<\/p>\n

\n
\n

Free Trading Resources<\/strong><\/p>\n

Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just click here<\/a> to check it out.<\/p>\n<\/p><\/div>\n<\/div>\n

<\/p>\n

Focus on Risk Management First<\/h2>\n

Too many new traders are only interested in the first part of trading. That is, how much money they can make.<\/p>\n

But the way I see it, they’ve got it backward…<\/p>\n

Instead, the key thing to ask first is the maximum you’re prepared to lose on any trade. And then to stick to it no matter what.<\/p>\n

By strictly capping your losses, you’re protecting your capital to keep you in the game long term.<\/p>\n

Understand this and apply it to your trading. It will surprise you how quickly your profits grow.<\/p>\n

Regards,<\/p>\n

Larry Benedict
Editor, Trading With Larry Benedict<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

What\u2019s the best way to make money in the markets?<\/p>\n","protected":false},"author":55,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[58],"newsletter-type":[],"ticker":[],"class_list":["post-21878","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-larry-benedict"],"acf":[],"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/21878","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/55"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=21878"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/21878\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=21878"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=21878"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=21878"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=21878"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=21878"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=21878"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=21878"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}