Good morning, traders…

The last two months — filled with insane volatility, shocking headlines, and record-breaking moves — have been a sharp reminder of how unpredictable the stock market really is.

There’s no way to predict what will happen next. You would need a crystal ball. It’s like trying to guess the outcome of a global sporting event before kickoff.

The market is a big game. Seriously. Think about what a game is, by definition: a competitive situation, with rules, stakes, winners, and losers.

That’s trading to a tee.

And once you see it through that lens, you can start to trade smarter by learning how the game works.

But there’s a twist…In any game, two things matter more than anything else: luck and skill.

And while it’s easy to chalk up wins to your brilliant skills and losses to bad luck … that’s not how it works.

Sometimes, you’ll simply get lucky. Other times, you’ll do everything right — plan the trade, manage risk, pick the right strike — and still take a loss because something completely out of your control blindsides you.

Long term, skilled traders come out ahead. But in the short term, there’s not always a direct correlation between how well you trade and how much money you make.

It’s a tough thing to accept, but a necessary one if you’re serious about becoming the best trader you can be. 

With that in mind, allow me to explain the hidden role of luck in the stock market…

The Fine Line Between Skill and Luck

Skill in options trading is about understanding the market, studying the data, choosing the right contract, timing your entry, and knowing how to manage risk.

But luck is the wild card — the stuff you can’t plan for.

Markets are influenced by all kinds of things we can’t control: news events, political tensions, weather, you name it.

Let’s say you’ve done your homework. You’re confident apple prices are about to go up, so you buy a call option.

But then, out of nowhere, news breaks: a new fertilizer just increased apple yields tenfold. The market floods with supply, demand falls, and apple prices tank. Your call gets crushed.

Was your research bad? No. You just got blindsided by something you couldn’t have seen coming.

That’s luck — or in this case, bad luck.

Every trader who sticks around long enough runs into this. It’s part of the deal.

But don’t confuse this with gambling. Trading isn’t roulette. It’s poker.

In poker, skill dominates over time, but chance still plays a part. The best poker players still lose hands, but they win over the long-term. And the same goes for traders. 

You need to be okay with that — and you need to learn how to set yourself up to get lucky more often than not.

How to Set Yourself Up for Luck

Focus on the Price Action 

• First, check the OMEN Scanner. See what names are getting big bets. Then filter:
• FOMO, fear, and greed will wreck your decisions. Price and volume are your best tools.
• If a stock is making lower highs and lower lows, that’s bearish — no matter how much you want it to go up.
• Stick to what the chart is showing you, not what your gut is telling you.

Read Global News Every Day

• News drives this market. Full stop.
• Staying informed gives you a better shot at being in the right trade at the right time.
• On the other hand, if you don’t follow the news, you might be shocked by a headline ruining your position. 

Watch for Macroeconomic Hints

• Big reports — inflation, jobs, GDP — often cause major moves.
• I’m always tracking Fed meetings, Bureau of Labor Statistics data, all of it.
• Here’s a stat that blows my mind:
  “Since 1961, the 44 days a year where there has been major economic news account for over 71% of aggregate equity market returns.”
• That’s about 17% of all trading days contributing to the majority of market gains over 62 years.

Luck will always be part of trading. You can’t control it, but you can control how well you prepare.

And the more prepared you are, the more often luck will show up on your side…

Happy trading,

Ben Sturgill

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*Past performance does not indicate future results