Good morning, traders…

Ben here.

Unsurprisingly, this week has been dominated by the Federal Open Market Committee (FOMC) meeting.

On Monday, I sent a text alert to my Spyder Members, warning about the dangers of trading too aggressively before the FOMC:

This comes back to the idea of trading like a farmer. I know what I’m looking for in an options trading setup — and if I don’t see it, that setup becomes a no-trade.

But now that the meeting has concluded and the Fed has decided to hold interest rates steady, we’re seeing an initial bullish reaction, and starting to get a trend…

The Invesco QQQ Trust (NASDAQ: QQQ) surged more than 3% following the Fed’s announcement on Wednesday, while sector-leader Nvidia Corporation (NASDAQ: NVDA) gained a staggering 12.85%.

That said, the price action can be very unpredictable in the days after Fed decisions. I can’t tell you how many times I’ve seen the market surge (or dump) after Powell speaks, only for stocks to make a counterintuitive reversal the following day, destroying everyone’s unrealized gains. 

To help make sure this doesn’t happen, let me give you three key tips for trading the post-FOMC madness…

Size Down Your Positions

More than anything, I recommend sizing down and trading smaller positions this week.

This market can flip at any moment, and we don’t want to be left holding a large bag at the wrong time.

Smaller positions give you more wiggle room to make mistakes (especially if you’re trading a small account).

The most important thing is that you go on to trade another day. Never risk more than you’re willing to lose.

I can’t tell you how many traders I’ve seen blow their entire careers on a few poorly-sized trades.

And it’s always sizing too big that kills traders, not the other way around.

If you’re unhappy after a winning trade because you didn’t bet more money, that’s greed rearing its ugly head.

You should be excited about your strategy working, and not disappointed that you didn’t make more money.

Be very deliberate with your position sizing and you’ll be a better trader for it.

Then, you should also be very deliberate with something else…

Book Profits Quickly

Suppose you’re lucky and disciplined enough to find yourself in a five-star setup, where your contracts are surging. 

In that case, it’s time to immediately identify another price target — the level where you’ll book profits. 

If a trade’s going well, greed is your worst enemy. You’ve gotta fight the urge to hold out for unrealistic price targets. 

To use a baseball analogy: Be satisfied hitting a single … don’t risk missing the ball by going for a grand slam.

This is especially true during a week like this one when major Fed catalysts can rock the market in minutes.

I want you to be “greedy with your gains” this week. If you’re up 50% on an options trade, don’t hold out for 75-100%. 

Lock your profits up and move on to the next play. Scale out of your trades gradually to secure your gains. 

This is easier said than done. There’s a constant war in traders’ heads between holding runners and booking profits quickly.

But this week, with the Fed dominating the narrative, it’s more important than ever to grab your unrealized gains while you still have them.

Stick to Your Plan

This isn’t the first time I’ll mention the importance of forming a plan for every trade you enter.

It’s not rocket science — every successful trader I know has their game plan prepared before they enter a trade. 

However, simply writing a trading plan isn’t enough — you must stick to it.

Let’s say you’re going on a road trip and the GPS has planned a route for you. If you take some side road that wasn’t in your itinerary, you’ll probably take more time than anticipated. Or worse, you could get lost.

Well, the same goes for trading. 

To build your plan, determine the following before entering any trades:

• Key price levels (support and resistance)…
• Any upcoming catalysts that could affect the share price…
• Position size (the number of contracts I want to trade)…
• Profit target and risk level…
• Potential entry and exit prices…

Then, once you’re in the trade, you need to stick to your plan as much as possible. This isn’t to say you shouldn’t be willing to adapt to extremely volatile conditions — you should.

If you’re on your road trip and find one of the freeways you planned to travel is closed for construction, you’ll need to adjust your navigation. Again, trading works similarly. 

But barring the unexpected, there’s a reason you laid out the roadmap you did. So don’t veer away from your meticulously-designed trading plan unless the price action forces you to.

Now, before we go, let’s look at:

💰The Biggest Smart-Money Bets of the Day💰

• $3.1 million bearish bet on PDD 08/23/2024 $129 puts @ $5.00 avg. (seen on 7/31)

• $2.6 million bullish bet on PYPL 09/20/2024 $60 calls @ $7.65 avg. (seen on 7/31)

• $1.8 million bullish bet on GLD 10/18/2024 $230 calls @ $5.00 avg. (seen on 7/31)

Happy trading,

Ben Sturgill

P.S. My brand-new specialized system for trading earnings season — Operation: Master Calendar — is off to a rip-roaring start.

Take a look at the results from my first 4 trade ideas:

EQR 8/16/24 $70 calls @ ~ 2.30

17% move from ~$2.30 on 7/29 to $2.70 on 7/29*

FFIV 8/16/24 $185 calls @ ~3.60

456% move from ~$3.60 on 7/29 to $20 on 7/31*

HOLX 8/16/24 $85 calls @ ~0.75

69% move from ~$0.75 on 7/29 to $1.27 on 7/29*

WELL 8/16/24 $115 calls @ ~1.00

100% move from ~$1.00 on 7/29 to $6 on 7/30*

If you want access to this system — which can predict earnings moves like these before they happen — Click here now to join Operation: Master Calendar!

*Past performance does not indicate future results