Chris’ note: Tonight’s a big night. At 8 p.m. ET, trading legend Larry Benedict is lifting the lid on a new trading strategy. It has nothing to do with stocks, bonds, or even options. Instead, it aims to profit from a window of opportunity opening in the currency market. And you won’t want to miss it…
As I’ve been showing you, rising interest rates do more than just crush stocks. They also kick up major moves between currencies. This has the potential to earn you thousands of dollars every month – if you know how to trade it.
That’s why I encourage you to join Larry later this evening. He’s been knocking it out of the park lately with his stock options trading. And he sees currency trading as a new frontier for profits.
RSVP for Larry’s free event with one click here. Then read on for how he got his start as a trader… and why he’s so excited about currencies right now.
Q&A With Larry Benedict, Editor, Trading With Larry Benedict
Chris Lowe: You have one of the best records I’ve seen. From 1990 to 2010, you didn’t have a single losing year as a trader. And in 2008, as the stock market and the economy were falling apart, you made $95 million at your hedge fund, Banyan Capital.
That track record earned you a place in Jack Schwager’s 2012 book on the world’s best hedge fund managers, Hedge Fund Market Wizards. He featured you alongside Ray Dalio – who manages the world’s largest hedge fund.
What struck me while reading the book is how obsessive you are about managing your risk. Where did that come from?
Larry Benedict: I learned that lesson the hard way. I did two things consistently at the start of my career – lose money and get fired. It’s only through sheer effort that I became a successful trader.
Chris: Knowing your track record, that’s hard to imagine. Tell me about those early years.
Larry: In 1984, I got a job as a clerk in the pit at the Chicago Board Options Exchange. It’s the largest options exchange in the U.S. Clerks answered phones, jotted down orders, and ran them out to the pit for the traders to execute.
This was when we had the open outcry system. You’ve probably seen it in the movies. It involves a lot of shouting and hand signals by clerks on the trading floor. That system has been phased out. Today, exchanges are almost fully digital.
Larry (right) on the exchange floor
My boss was this brash trader. He had one of his clerks train me. And this clerk told me, “Look, our boss is going to fire you every day. Don’t listen to him. Come back tomorrow, and everything will be fine.”
Chris: And did your boss fire you?
Larry: Yes – on my first day. And every day after that for about eight months. I didn’t know the ins and outs of working on a trading floor. And on day one, my boss threw me right into the fire.
He was giving me hand signals for the trades I should be making from the pit. I had all the signals on a sheet. But learning them was like learning sign language.
When a seller is looking to offload stock, he should face his palms toward the buyer. A buyer searching for a seller has his palms facing toward his body. A fist against the palm is a stop order. A hand across the throat means an order has been canceled. And so on. I’d look up at the scrolling tickertape, and it looked like gibberish to me.
Inevitably, I messed up an order. My boss went ballistic. He told me I was an idiot… and fired me.
But I came back the next day. And as miserable as it was getting fired every day and returning with my tail between my legs, I kept coming back. I loved the energy. It was like playing a competitive sport. And I’m extremely competitive. So, getting knocked down wasn’t an issue for me.
Chris: What was the turning point for you as a trader?
Larry: In 1989, I got a job with a trading firm called Spear, Leeds & Kellogg. That’s where I learned about the importance of sticking to a trading discipline.
After Goldman Sachs bought the company in 2000, I set up my own trading firm, Banyan Capital Management. And over time, I became as consistent at winning as a trader as I was at losing in my early years.
Chris: What was the secret to that transformation?
Larry: I learned you can’t let one trade define you. And to make sure that’s the case, you have to trade a lot. You will always have losses as a trader alongside your wins. But there will also always be new opportunities… as long as you keep trading. I’ve often made 100 trades or more in a day.
Put simply, I learned to accept losses. And I learned to keep them small.
Chris: That’s what I find so fascinating about your trading style. You’re obsessive about keeping your downside risk low. And you talk a lot about “earning your risk.” What does that mean?
Larry: It means you shouldn’t take on much risk until you’ve had a string of smaller winners. That way, you build a pile of capital you can speculate with. And you don’t have to trade with your savings.
The biggest mistake rookie traders make is to swing for the fences. That’s fine until you take a loss so big it wipes you out. Instead, you target gains of 5%… 10%… and 25%… and grab these wins when you can.
Same goes if you’re just not trading well, for whatever reason. You want to cut your risk as much as possible.
You never go broke taking a profit. That’s why I tell my subscribers they should always look to put a “P” on the page. Once they’ve built a strong foundation of capital, they’ve earned the ability to take on more risk.
Chris: You’ve shown how that kind of discipline pays off at your One Ticker Trader advisory.
Last year, you recommended 11 trades. And all of them were winners. This gave your readers the chance to make a 240% return on their cash at risk.
And last week alone, you notched an 84% win rate on 13 recommended options trades at your S&P Trader advisory. Of those 13 trades, 11 were winners.
If a subscriber with an account of about $25,000 traded one options contract for each trade… they’d have walked away with a net profit of $1,792.
That’s a 7% gain… in one week.
And you’re not stopping there. Tonight, you’re going live with details of your first currency trading strategy.
Larry: That’s right. Most people stick to trading stocks. But right now, some of the biggest opportunities for traders are in the currency market.
Your readers have probably seen the big moves in the dollar and other currencies. For example, last year the dollar soared 17% versus the euro… before plunging 12%.
There’s even talk that the dollar will lose its status as the world’s primary reserve currency… something that could have major implications for the country.
All of this is evidence of extreme volatility in the currency – or forex (for foreign exchange) – market right now. And as I talk about all the time, the higher the volatility, the higher the profits, if you’re a trader like me.
Chris: What makes forex different from other markets?
Larry: It’s the largest market in the world. In 2022, the forex market averaged $7.5 trillion of trades a day. That’s 37x the $200 billion average daily trading volume of the New York Stock Exchange.
Forex also trades 24 hours a day, from 5 p.m. ET on Sunday evening through Friday at 5 p.m. ET.
That means there are many more opportunities to trade forex than stocks.
The other great thing about forex is that it doesn’t correlate to the stock market. It doesn’t matter if stocks are in a bull or a bear market, there are always profitable setups as currencies rise and fall in value against each other.
I’ve traded more than $500 billion worth of currencies since the 1980s. It’s one way I helped my hedge fund customers profit during my 20-year winning streak.
But there hasn’t been much excitement about forex for about the past decade. That’s because one of the big drivers of currency volatility is the difference in interest rates around the world.
And since the 2008 crisis, central banks around the world dropped their rates to zero. That put currencies in a kind of deep freeze. But over the past year, rates are moving again… and so are currencies.
A currency trading “window” is opening as interest rate hikes bring big moves to this market.
That’s why, tonight, I’m streaming a special presentation all about it. I’ll explain more about how forex works… why it’s worth adding to your trading skillset… and the most interesting currency trading setups I see now.
It’ll go live tonight at 8 p.m. ET. And I hope you’ll join me. Just go here to save your spot with one click.