Happy Friday the 13th, traders…
Certain people are dodging ladders and black cats today.
But I don’t put much stock in superstition. (Pun intended.)
However, there’s one thing I do almost every Friday that’s helped me crush 25 years in the stock market.
You can call it superstition, but I call it risk management…
It protects me from the scary stuff that goes bump in the night: the news that hits while the market’s closed (and your positions are left out in the dark).
Just look at the INSANE stories that have happened over the past 48 hours:
- Jensen Huang’s extramarital affair with a possible Chinese spy exposed
- Huang resigned as CEO of Nvidia
- President Trump said he wants Tim Cook to take over Nvidia
It begs the question: What out-of-nowhere, market-shaking headline will drop next?
I have no idea. And that’s why I use this method…
This idea might be new to you. But trust me, done right, it can change the way you manage risk.
THIS has saved me more money than any other trick…
The Power of “Going Flat”
I’m talking about the idea of going flat on Fridays.
Going flat means you don’t hold trades over the weekend. So, by the close on Friday, you’ve sold all the contracts you bought during the week (or before).
There’s too much uncertainty over the weekend. Just because the setup was good on Friday doesn’t mean it’ll still work on Monday.
A lot can happen in two days, especially with macroeconomic news.
If you’re making a macro-based trade and holding it over the weekend, you’re playing Russian roulette with your account…
And speaking of macro trades…
Macroeconomic News Over the Weekend
Macroeconomics, a fancy word for the big picture of a country’s economy, can have a huge impact on stock prices.
News about big economic events, like changes in interest rates, international trade deals, or even unexpected political events, can make stock prices go up or down.
And much of that news breaks … you guessed it, over the weekend.
During the week, you can monitor and respond to news in real time. On weekends, you can’t.
The market’s closed, but the world keeps turning.
By Monday morning, there could be a major announcement that drastically affects the stock market, and you could find yourself in a position you hadn’t anticipated.
Going flat keeps you out of that spot.
The 5 Undeniable Advantages of Flat Fridays
Peace of Mind
Going flat gives you peace of mind. Instead of spending the weekend worrying about Monday, you can relax and start the new week with a clear mind.
Flexibility
By selling your stocks on Friday, you start Monday with a clean slate. You’re free to reassess and make new decisions based on the latest information, without last week’s choices tying you down.
Avoiding Shock
As we discussed, macroeconomic events can cause sudden, significant moves in stock prices. These moves, called “gaps,” are hard to predict. A stock might close at $50 on Friday and open at $40 or $60 on Monday based on weekend news. Going flat protects you from a gap in the wrong direction.
Enhanced Risk Management
Managing risk matters as much as making profits in this game. Going flat is a proactive way to do it. It’s like wearing a seatbelt. Even great drivers wear one, because some things are outside their control.
Better Preparation for the Week Ahead
With no open positions to worry about over the weekend, you can use that time to study and get ready for the week ahead. Maybe there’s a chart you’ve been meaning to analyze, or a sector that’s caught your interest. Use the weekend to do your homework, so you’re ready to crush the market come Monday morning.
But … What If You Miss Out?!
A common concern with going flat on Fridays is FOMO.
What if your stock would have gone up on Monday, and by selling on Friday, you miss out on potential profits?!
Sure, this may happen…
But remember, professional trading comes down to consistent, informed decisions that protect your positions while giving you opportunities to profit. You won’t hit a home run every time.
Plus, what if the opposite happens?
You hold over the weekend, only for some random news story to completely ruin your trade thesis and send your position deep into the red?!
Going flat on Fridays protects your profits from exactly that. It’s a simple strategy I’ve used for decades to manage risk and uncertainty.
I picked up this strategy over years of observation and experience on Wall Street.
Trading is as much about mindset as it is about skill. It requires patience, risk tolerance, discipline, and continuous learning.
And one of the easiest ways to protect your mindset is going flat on Fridays.
So have a great (flat) weekend…
And as always…
Stay Street Smart,
Jeff Zananiri
*Past performance does not indicate future results, not typical
