A correlation measures the strength of a relationship
between two quantitative variables, expressed in three results:
- Correlation
(the higher, the stronger)
- No
correlation (independent happenings)
- Opposite
correlation (one happening or variable is counter the happening of the other).
The European financial markets forerun the US market by six
hours; hence, we like to spot over the pond for the happening. The strongest
correlation we found is between the DAX (German stock market index) and the
S&P 500. See why
DAX (red-blue) and S&P 500 Six Months Daily Compared
Even so, the market composition is different; the two
indexes develop in a tight relationship.
In NLT Top-Line, we measure the correlation of the price
development of assets to the overall market and found that independent
happening or uncorrelated price moves often lead to strong results.
The following chart is showing ZM, Zoom video on a weekly
NLT Top-Line chart, and we highlight a signal combination that is prone for a
strong price breakout:
- Blue
buy signal on the price chart: Buy > $295.97
- Purple
highlighted volume, an indication for a pre-stage of a breakout
- NLT
comparison signal: Up 295.97, showing that the stock is developing stronger
than the market.
- Stock
independent and not correlated to the stock market
ZM on Weekly NLT Top-Line Chart, July – September 20202
This is how you have multiple measures to decide when a
trade constellation is on the chart that deserves special attention. Here a
short video
explaining how to find those opportunites…click.
Those rules are learnable and documented for you. We spend
20-hours of individual training, teaching you those and appropriate risk
limited strategies for going to market, and we work with you in a three-month
mentorship, reinforcing that the rule we teach stick with you. For more
information, we invite you to a personal consulting hour, with no obligation:
+1 866 455 4520 or contact@NeverLossTrading.com
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