But if you're going to go after the types of incredible returns you can make with commodities…
You have to learn how to trade these stocks the right way.
Here's what I mean…
You can't trade commodity stocks with tight stop losses.
Look, it's a free country.
If you want to use trailing stops, use them. If you don't want to use them, that's fine too.
But here's what you need to understand before you decide.
If you're trading a very volatile sector — like small-cap energy — and you've got a 10% trailing stop on your position…
You're never gonna make any money with that.
It's gonna hit your stop every other week and you're just gonna get chopped up to death.
Thats because commodity sectors are fundamentally different from the S&P 500.
If you look at the drawdowns in SPY compared to the drawdowns in something like XME or GDX…
They look totally different.
In order to trade these names, you need to have wide stops — over 20% in most cases — to ride these commodity cycles.
That's exactly what I do.
Because here's the thing everyone needs to understand about commodity volatility…
It's not the problem. It's the reason we're here.
The most volatile asset classes have historically produced the highest returns for traders who know how to manage them.
That volatility is what creates the opportunity.
And this Thursday, April 2nd at 2pm ET, we're going to be hosting a free training on how to trade these fast moving commodity stocks the right way.
Click here to register.
Sam and I will be joined by JC Parets for a live session called "Making Money from Inflation."
We're going to cover where energy goes from here…
Which sectors are starting to wake up behind it…
And most importantly, how to size and manage these positions so the volatility works for you instead of against you.
This is the conversation we started Monday. Thursday is where it goes deeper.
It's free. It's live. And we'll have plenty of time for Q&A at the end.
Click here to register for Making Money from Inflation.
See you at 2pm on Thursday.
-Jason Perz
