High Probability Trade Setups

By institutional investors dominating all financial markets, our computers and programs help us to identify price constellations, which lead to a price continuation patterns and we differentiate two major trade patterns:

• Momentum Trades: Frequent trading for smaller price move increments.
• Trend Trades: Focusing on following a trend by staying in the trade for a longer period of time.

The first documentations of price constellations, which formulate a pre-stage of a price move, were found in Japanese Candle Stick Patterns: Three white soldiers, harami, Doji constellations. 

By our base hypothesis, high probability trade setups are found when a rate of performance above 63% is achieved over a longer set of data and for multiple time frames. When programming and testing candle stick constellations, they lead to a positive expectation but not to the required significant statistical evidence for high probability trade setups and thus did not get considered in our concepts. 

The introductory high probability trading concept in the NeverLossTrading series is TradeColors.com: 

By a sequence of two same color candles, a price threshold is formulated and when it is surpassed in the third candle, a high probability setup for a price continuation pattern is reached. 

The momentum target for this trade is formulated by the Price Move Approximation, which formulates the expected price move from entry. 

The stop is set at the high/low of the trade initiation candle (second same color candle).

The entry price level is the high/low of the trade initiation candle ± 2% of the Price Move Approximation. A trade setup is reached, when this threshold is surpassed in the third candle.

For following a trend move, you stay in the trade by trailing the stop below the low of two candles back or until the second opposite color facing candle occurs. 

SPY Daily Chart with TradeColors.com Constellations, January – April 2014

The chart shows and measures momentum price developments. In the period between January 15 and April 15, 2014 we had:

• 6-Winning trades setups (86%).
• 1-Losing trade setup (14%).

No doubt about it, this is high probability trading. 

To support you in finding stocks with two same color candle setups, we developed the NLT Continuation Pattern Alert, where we report those to you at least three times per week. Here is an example of the April 7 report and the stocks that were listed: 

The TradeColors.com concept shows you how to short such market constellations out of IRA or other cash accounts. 

For today, April 15, 2014 the following stocks produced a two candle color constellation:

• SO: Up for $0.56 or 1.3%
• COP: Up for $1.06 or 1.5%
• SBAC: Down for $1.94 or 2.2%

When TradeColors.com produces such high probability trade setups, why would one use a different NeverLossTrading concept? 

NLT Top-Line and NLT HF-Concepts have a higher productivity rate by giving you earlier entries and a higher participation rate for trades and thus allow for higher and more frequent returns. 

With our current TradeColors.com promotion, we first of all give you a $500 discount until the end of April and in addition allow for an easy upgrade to a NeverLossTrading system by discounting the tuition you already paid. 

For more information: 

Call: +1 866 455 4520 or contact@NeverLossTrading.com

Sign up for our trading tips: http://neverlosstrading.com/Reports/FreeReports.html