Trading with a hard work attitude is a mistake. Instead of acting as often as possible, positional traders wait for a specific setup they trained for and then open a position. Compared to professional sports, you make a skilled strike to score when reaching a specific position in a game.
1. Trade Selection
As a positional trader, you apply technical analysis to specify crucial price turning points, and you only act when a new direction is confirmed, applying risk-limiting strategies.
Wow, this sentence has a lot of content; let us dive into the details:
Finding Crucial Price Turning Points
You need a system to specify crucial price turning points that are likely to reach their targets in a meaningful risk/reward relation under your system probability.
The critical question is: how often do you want to transact in the markets?
- Day Trading: opening and closing positions on the same day
- Swing Trading: holding positions for multiple days
- Longer-Term Investing: keeping positions for weeks and months
From the standpoint of a trader, you have freedom of choice, but your chosen investment strategy has to fit the scope of the overall market.
SPX Weekly NLT Top-Line Chart
The chart shows how our indicators in the past: week of 8-22-22, 9-12-22, and 10-17-22, indicated crucial price turning points that were confirmed in the price continuation pattern; however, starting the week of January 16-23 the SPX remains in an NLT Purple Zone as a sign of directional ambiguity. Hence, it was not recommendable to pen longer-term positions by a lack of overall market commitment for directional price moves.
We assume a price direction to be confirmed when the system-spelled-out price threshold: Sell < $4057, 7 is confirmed in the price movement of the next candle. In all three instances, this was the case. When an NLT Purple Zone is present, we are not accepting trades on weekly signals and rather move to a shorter-term trading strategy.
SPX Volatility Adjusted NLT HF Chart
The above chart would be a swing trading choice for longer-term open positions. You see price move indications in pink. On this chart, you want to trade when the spelled-out price threshold is surpassed by a candle closing above/below.
On the first situation Buy > $3853.26, the entry condition was confirmed on 1-6-2023 and led to a long trade, for a 2-SPU price movement. At the time 1-SPU was good for 90 SPX points, hence your trading target was 180 points above entry.
The second situation, Sell < $4123.36 was confirmed on 2-11-23, by the candle closing below the set price threshold and leading to a short trade.
If you rather like to trail stops, you can do so with the help of the red line of the red or blue frame around the price development.
For both situations, we share strategies that limit your risk of the trade to a minimum per trading unit, with the help of the NLT Delta Force Options Trading Concept, which specifies:
- Strike price to choose
- Time to expiration
- Maximum price to pay for a single option or switching to a different options trading strategy when the desired price is not achievable
Here is an example for QQQ, ETF of the NASDAQ 100
QQQ Volatility Adjusted NLT HF Chart
Four potential trade situations, where the first three had confirmed directional trading opportunities and the last one did not.
In summary, it matters that you adjust your trading style to what the markets allow and we help you to find the appropriate signal strategy.
If you are a day trader, and you sign up with us, we teach you NLT Timeless Trading, where you focus on acting on charts where candles are painted by system-defined price increments. By placing buy-stop and sell-stop bracket orders, you limit your risk and always stay in a meaningful risk/reward balance.
Here is an example of the E-Mini S&P 500 Futures contract.
Day Trading Example, NLT Timeless Chart
The chart shows four trade situations; in each, the system spells out the following:
- A price threshold: sell < or buy, a price level to be surpassed in the price movement of the next candle, or else no trade entry
- The trade target: dot on the chart
- The stop level: red crossbar on the chart
On our NLT Timeless Day trading chart, we use system-defined price increments to specify the start and end of every candle instead of time, helping you multifold:
- Each setup is in the system-appropriate risk/reward ratio, which is often not given in time-based candles
- Your entries and stops are less predictable by not following time-based patterns
- You trade for meaningful minimum price changes of the underlying instead of being eaten up in volatility
- The system produces multiple trading opportunities in the trading day, while we propose to stop after two winners
Let me share that aside from Trading, I like to play a game of chess: competing on a high level in a short time frame of five minutes per game and meeting people’s challenges on a worldwide basis.
What does it have to do with Trading?
You need to make decisions on the spot and you are competing against prepared individuals, who want to win. Trading is the same: a professional will take the opposite side of your trade, ready to win. Hence, you better be prepared to reach a favorable position after the opening that leads to a high likelihood of a trade to target.
Hence, if you are a day trader, you need a system and rules to trust, or else your money goes quickly.
2. Risk Management Strategies for Positional Trading
Positional Trading can be a lucrative investment strategy, but it also comes with inherent risks. That’s why it’s crucial to have a solid risk management plan in place. One strategy is to set stop-loss orders to limit potential losses. This means placing an order to sell a security if it falls below a certain price point. Another strategy is to adjust or repair the trade. We share this concept in our mentorship and actually, our brand name, comes from the idea of not accepting the stop; however, Never Stop Loss Trading was a bit lengthy. When we work together we will go through percentage risk allocation and determine the lot size of each trade through this method, so you can make informed decisions and adjust your strategy accordingly. Lastly, it’s important to have a long-term mindset and not get caught up in short-term fluctuations. By implementing these risk management strategies, you can minimize potential losses and increase your chances of success in positional Trading.
3. Tips for Identifying Key Price Levels
If you want to succeed in positional Trading, identifying key price levels should be at the top of your priority list. These levels are crucial as they indicate potential turning points in the market. To identify these levels, you need a system that analyses the price action of now, interpolating and forecasting when a crucial price turning point is reached and how far the price movement most likely leads. One thing is for certain, there are no 100% secure trades. Remember, key price levels are not set in stone and can change over time, so it’s important to constantly monitor and adjust your strategy accordingly. By mastering the art of identifying key price levels, you’ll be able to capitalize on price turning points and make profitable trades in the market.
4. Conclusion
In conclusion, mastering the art of positional Trading is not an easy feat, but it is definitely worth the effort. By capitalizing on price turning points, traders can achieve significant profits in the long run. However, it is important to remember that success in positional trading requires discipline, patience, and a solid, high-probability system. It is also crucial to have a well-defined trading plan and to stick to it, even when the market gets volatile. As we have seen, there are several key strategies that can help traders identify potential turning points and make informed decisions. By following these tips and staying focused on your goals, you can become a successful positional trader and take your trading to the next level.
We are here to support you in mastering the market today. If you are ready for learning to be a positional trader, check with us and we find out what system suits you best.
contact@NeverLossTrading.com Subj.: Demo
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