Larry’s Note: In just a couple of hours, you can learn more about my “chaos trades”… They’ve helped me hand my readers gains like 12.73%, 28.99%, 14.75%, 18.54%, 37.42%, 27.52%, 3.01%, 22.95%, and 22.58% over the past month.
The thing is… you don’t need enormous wins to make a significant difference in your account balance. And the recent volatility is letting us do rapid-fire trades – some in as little as a day or two.
That’s why I don’t want you to feel trapped by the market’s choppiness. I want you to feel empowered to strike in these moments.
So today at 11 a.m. ET, I’m going live with what I’m seeing in the markets going forward… and my strategy for turning the chaos into profits. Just click here to automatically receive an invite to tune in.
See you at 11 a.m. ET!
A lot of investors are feeling glum after the brutal moves in the markets.
It is a far cry from where things were just a couple of months ago. The major indexes started 2025 on a positive note. They hit all-time highs in February.
But then things took a very sharp turn…
From those peaks, the Nasdaq and S&P 500 lost 25.6% and 21.3%, respectively, as of their April 7 lows. Fear around tariffs and the economy started to bite, putting them in bear market territory.
Even the meteoric rebound following the White House’s tariff pause soon faded out and reversed.
This type of market can bring a lot of frustration and disappointment, especially after such a promising start to the year. But rather than trying to ride it out or sit on the sidelines, we’ve been putting that volatility to work…
In April alone, we’ve already generated profits of 3.0%, 58.8%, 18.5%, and 29.4% in my introductory trading advisory, One Ticker Trader, trading the Invesco QQQ Trust Series 1 (QQQ)…
The trick is to look for reversals… and take your profits when you see them.
So let’s check these trades out…
Converting Reversals Into Profits
The massive selling after the February peak put QQQ into oversold territory. The Relative Strength Index (RSI) stayed below the lower gray dashed line in the bottom half of the chart below (green circle).
A quick bounce often follows a sharp down move like that, as bargain hunters enter the market…
So we set ourselves up to catch a quick bounce by buying a call option (Trade No. 1). A call option typically increases when the value of the underlying asset rallies.
But as the chart shows, we were a little early with the trade. QQQ opened lower the following day. It did rally, but we had given up around half of those gains by the market close.
Invesco QQQ Trust Series 1 (QQQ)
Source: e-Signal
QQQ opened higher the next day, but that rally soon fizzled out.
You need to be proactive in volatile markets. That means taking profits and quickly exiting trades that are not going as planned. So we closed the trade for a small gain of 3.0%.
We opened a put option the same day (Trade No. 2) to catch QQQ’s developing reversal. A put option increases in value when the underlying stock falls.
And this time, we got our timing exactly right. QQQ’s down move accelerated throughout the day, allowing us to bag a 58.8% gain in just 2.5 hours.
But things didn’t end there…
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Overdone Moves
President Trump’s pause on tariffs the following day set off one of the biggest single-day moves in years. QQQ’s 12.2% gain was its best percentage performance since the runaway dot-com bubble in the early 2000s.
But once again, that move was looking overdone…
With the RSI reversing from near resistance (green circle), we opened another put option trade (Trade No. 3), expecting that euphoria to subside.
As you can see in the chart below, we got our timing spot on…
Invesco QQQ Trust Series 1 (QQQ)
Source: e-Signal
QQQ opened lower the next day and continued to slide. And with our trade in good profit, we closed it for an 18.5% gain in just one day.
From there, QQQ tried to rally again, coming close to retesting its April 9 short-term high. But ultimately, that move failed.
QQQ opened on its highs on April 14 but soon rolled over and reversed. That move coincided with the RSI again testing but failing to break through resistance.
That provided the setup for another reversal to the downside. So we opened a new put option position (Trade No. 4) to capture that emerging down move.
As the chart shows, QQQ continued its slide as buying momentum steadily drifted lower over the following week. And with our position in good profit, we closed it out on Monday for a 29.4% gain.
As these four trades show, we like to use options to catch reversals in a highly volatile market. And they can enable you to pocket sizeable profits in quick time.
If you’d like to find out more about the strategy behind these trades, I’d encourage you to click here.
Happy Trading,
Larry Benedict
Editor, Trading With Larry Benedict