A Wise Trader’s Guide to the Fed￼
Dear Profit Takeover reader,
Anytime a member of the Federal Reserve speaks, it can cause a lot of tension in the market. Today was yet another perfect example. We see a lot of chop up and down beforehand, which is why I never like to trade before the announcement. You just never know how the market will react.
After the news comes out, the market can make some wild swings and it can make for a fun close…
But it may not be a smart time to open new trades.
Just look at what happened to markets this morning after Jerome Powell spoke to Congress. Investors did not like his message one bit and they ran for the exits.
If you’ve been around me long enough, you’ll hear me say “Sometimes the best trade is no trade…” and Fed days can be great examples of this being true. Today proved this point again.
Instead of opening a trade and getting tricked by volatile pops and dips – essentially stuck in a losing trade after the news hits the wires, traders can wait for these volatile moves to take profit in trades they already have open.
For example, yesterday, I recommended some BMBL puts during my live Profit Revolution show, and they popped to 50% profit overnight…
If you hold out until you get a better idea of how the market will move, you can put on a trade with a hedge – just in case your trade goes the wrong way.
Here’s an example of a simple hedge: If you think the market could drop, buy four puts in SPX and then buy one call in SPX just in case the market goes against you. Hopefully, your puts will win and you’ll make more profit selling them on the downside, but if the market decides to rally, you could still likely recover what you lost on your puts by selling your winning calls.
I like trades with a hedge to offset the price risk of options.
These types of wise plays are great for steady wins and building wealth over time.
Tomorrow, I want to share a method similar to this one that has been in the making for over 8 years…
Andrew Giovinazzi, my mentor and Chief Options Strategist at Option Pit, and I have been developing a specific strategy to build wealth consistently over time – whether the market moves up or down – and in an event like the 2020 crash, this method has the potential to make a wild profit to protect your wealth.
Hundreds of floor traders have made millions using Andrew’s options trading methods – and we worked on this particular strategy together.
Do not miss out on our live show tomorrow evening at 8:00 p.m. (ET). There will be special information and perks for live viewers only and I want you to be among the first to hear it.
Sign up right here for your free seat.
I’ll be back again tomorrow morning at 10:30 a.m. (ET) for another live Profit Takeover show right here in the main room… Licia will join me tomorrow and we will see what she’s found during her live candlestick analysis.
Until next time,
March 07 2023
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