Follow Keith Fitz-Gerald Start the conversation
Comment on This Story
Or to contact Money Morning Customer Service, click here.
Conventional wisdom holds that Wall Street is rigged to favor the big traders, and that you'll never win.
The implication, of course, is why even try?
I've never believed that, and you shouldn't either.
In reality, there are plenty of savvy investors who have beaten and who continue to beat Wall Street at its own game consistently, including Sir John Templeton, the legendary Jim Rogers, Stanley Druckenmiller, and Warren Buffett, just to name a few.
I want you to be one of 'em, and I'm here to tell you that you can beat the Street.
I'm not kidding.
You can do this – starting with understanding something I call the lowball order.
Do This Now to Capitalize on Market Fluctuations
I think you're going to be thrilled by how easy lowball orders are to use, especially when you realize that you don't have to sit in front of your screen all day to bank the big bucks with the best of 'em.
For lack of a better term, lowball orders are like a "profit trap" you lay in advance. They'll let you conquer market madness and profit at your leisure.
If you've never heard the term before, a lowball order is one of the simplest, yet most powerful orders available today, especially in volatile market conditions like we have right now.
They're great for at least three powerful reasons:
- You can place them in advance
- You don't have to be at your computer to actively manage your money
- You control your risk by waiting to make your move until the stock you want to buy meets your risk reward criteria.
First, you line up with one of the six Unstoppable Trends we're following: medicine, technology, demographics, scarcity/allocation, energy, and war, terrorism, and ugliness.
Second, you select a stock that's been beaten down or is otherwise out of line with long-term expectations, fundamentals, and earnings potential. Ideally, this isn't just any old stock. It's one that you'd buy if it ever went "on sale." I talk frequently about maintaining a "buy list" of companies you want to own if you get the opportunity to pick them up at a dramatic discount. To me, this is Apple at $122, Tesla at $243, or even Facebook at $144. Your list may differ; my point is that you have a list… at all times.
Great examples include any of the "Big Five" tech stocks: Apple Inc. (Nasdaq: AAPL), Facebook Inc. (Nasdaq: FB), Alphabet Inc. (Nasdaq: GOOGL) Amazon.com Inc. (Nasdaq: AMZN)… you get the idea.
Third, you pick a price – to the penny – that matches your individual risk tolerance, your investment objectives, and your belief about what the company is really worth. While there is no hard-and-fast rule here, many traders find being within 10% to 15% of the most recent annual low is fertile hunting in choppy markets.
Fourth, you place your order to buy "XYZ at $50 per share or less, GTC" – meaning good till cancelled.
Depending on how sophisticated you want to be, you can tack on special instructions.
Most commonly that's things like the "GTC," which I've already mentioned. Others include "GTD," which means "good to a specific date" you pick, or "AON," which means "all or none," as in the trader has to fill all the shares requested in a single trade.
Then you sit back and wait for a price dip. Why and when really doesn't matter. The markets can react to all sorts of things – bad news, headlines from China, Putin's latest move, a misguided Fed.
What you're doing here is laying a "profit trap" in advance of conditions that you know favor your money rather than the institutional traders who would otherwise take it from you.
The Mechanics Are Simple
About the Author
Keith is a seasoned market analyst and professional trader with more than 37 years of global experience. He is one of very few experts to correctly see both the dot.bomb crisis and the ongoing financial crisis coming ahead of time - and one of even fewer to help millions of investors around the world successfully navigate them both. Forbes hailed him as a "Market Visionary." He is a regular on FOX Business News and Yahoo! Finance, and his observations have been featured in Bloomberg, The Wall Street Journal, WIRED, and MarketWatch. Keith previously led The Money Map Report, Money Map's flagship newsletter, as Chief Investment Strategist, from 20007 to 2020. Keith holds a BS in management and finance from Skidmore College and an MS in international finance (with a focus on Japanese business science) from Chaminade University. He regularly travels the world in search of investment opportunities others don't yet see or understand.