Experience how to act with high probability, less predictability, on a high participation rate in many opportunities, giving you an edge as a retail trader.
Trading is about three keywords, starting with a P:
- Probability of your system (≥ 65%)
- Predictability of your actions (low)
- Participation rate (high)
Let us explain:
As a trader, you are a probability thinker, which means there is no 100% certainty that your decision will lead to a positive outcome. More frightening: 76% of the retail traders are losing money. Trading is not a game where the smartest are necessarily the best. If IQ were a ticket to riches in the market, many more successful traders would be there. From our experience, you need to put the odds in your favor by operating with a system and rules of a 65% or higher predictability; else, the chance for success will be random. Here is a little experiment that demonstrates the math behind this statement:
We are comparing two marble drawing experiments:
- Two bags of 20 marbles, one bag carries 13 winners (green), the other 11, replicating a 65% and 55% chance of winning
- Make ten draws, and after each the draw, you put the marble back
- Calculate the expectation value with the Bernoulli formula
The experiment with 13 winners (65%) has a 75% chance of winning six or more times out of ten draws. On the other hand, the experiment with 11 winning marbles (55% chance of winning) only has a 50% or random chance of winning. Unfortunately, most retail traders base their decision-making on low probability indications.
The worst trader has positive trades, but it is not about those; it is about your average winning balance. Only when this is positive are you trading with an expectation of producing a return from your financial market investments.
What is the basis of your decision-making, and do you want to better your trading or justify that you were right because you had random wins?
We have more than ten years in business and helped many get independent in trading the financial markets. Still, we also met a good number of people at introductory meetings and noticed we could not help (we summarize two one-hour sessions to their essentials):
Example-1: Trading the Impossible Trade
Potential Client: “I trade as a day trader, trading from the one-minute chart.”
NLT: “Are you making money with this?”
Potential Client: “No (shorting the real long answer).”
NLT: “let me explain why you will not have a chance on a one-minute chart to trade with the odds in your favor.”
You trade for a price change of $50; on entry and exit, you need to consider $12.50 of slippage (bid/ask spread) and about $4 commission.
Hence, if you win two out of three, you are treading water.
Potential Client: “When your system cannot do it, it is not right for me.”
If you want to give yourself a chance to trade for positive expectations, do two things:
- up your target from $50 to $300
- change your decision-making base to a high probability
Our system will provide about seven day-trading opportunities and let us jointly calculate the expectation value for a set of three trades, winning two, and we go through chart examples for proof.
Potential Client: “I see what you say, but I want to trade from the one-minute chart; I have been doing this for far too long to change.”
NLT: “Understood, and good luck; it was nice talking to you.”
It is a human pattern, doing the same thing repetitively and expecting different results. So change is inevitable if you want to make money trading.
Example-2: Shooting for the Stars
Potential Client: “I am looking for a system that gives me two to one or higher winning expectations.”
NLT: Those exist in the NLT Top-Line Program; we call them early up or early down signals; they have a 68% probability and occur about 15% of the time. We have traders that solely trade those, but you need to be patient to rule out 85 of 100 trades when focusing exclusively on such setups. In addition, if you take all system opportunities, you multiply your income expectation by increasing your participation rate. Let us share the distribution of acceptable trades by their risk/reward setups, calculating the expected value when trading for $1, winning two out of three of a set of 100.
Hence you increase your income opportunity about threefold (2.7-times to be exact) when you allow all acceptable trades: participation rate is crucial for your overall success.
Potential Client: “I am taking this and want to learn how to do it in your mentorship.”
NLT: “Our Top-Line Program comes with 20 hours of individual training, all indicators installed, and charts set up for you; let me send you an educational contract that can be a tax-deductible expense depending on your tax status.”
The financial markets are institutional investment-dominated. Therefore, your stop price levels are relatively predictable when using standard time-based charts. However, to move your trading activities outside the range of predictability, we developed the NLT Timeless concept. The NLT Timeless Chart is purely price-based and cuts higher-level price movements into manageable sub-units, letting you participate in many opportunities for day trading, swing trading, and longer-term investing.
Let us share some trading examples that undermine what we shared prior:
NUE on the Daily NLT Top-Line Chart
We highlighted four confirmed trade situations: A situation is confirmed if the spelled out price threshold is surpassed in the price movement of the next candle: Buy > $130.50, for example, or Sell < $105,38. Upside price movements are framed in blue, where the red line on the bottom functions as a trailing stop line. Dots on the chart spell out the targets. Downside price developments are framed in red, where the red line on top of the channel functions as a trailing stop.
We share multiple strategies in our mentorship on acting on the opportunities from the price chart and the lower NeverLossTrading Comparison indicator. It would be too much to write this all out now. The orange indicator shows opportunities > 2:1, and as you see, there was only one that was valid. The second orange signal had no confirmed directional price move; even so, the price moved down after, but we trade favorable conditions only.
E-Mini S&P 500 on the NLT Timeless Swing Trading Chart
We highlighted three trade situations between March 14 and April 14, 2022, each good for a price change of about $3,500 per contract. There are rules involved to learn and apply:
- Do not enter at an exit level
- Do not trade when an NLT Box Line cuts the way to target short
- Disregard additional signals on the way to the target
- The gray dot on the chart shows the target
- The red crossbar at the signal candle shows you where to put the stop
- The graph combines NLT Trend Catching, NLT SPU Move and the NLT Timeless Concept
Next, we again pick a day trading example for the E-Mini S&P 500 futures contract. It shows multiple downside opportunities that all came to target, complying with the rules we spelled out above. Each trade was good for a price change of about $600: a couple of solid trades can quickly pay back the system and mentorship tuition.
E-Mini S&P 500 on the NLT Timeless Day Trading Chart
Make a change to your trading:
- Decide on high probability price turning points
- Be less predictable in your actions
- Participate in multiple opportunities for the instruments of your choice: Stocks, Options, Futures, FOREX
Contact us, and we will show you live what our systems can do for you.
contact@NeverLossTrading.com, Subj.: Demo
We have more than ten years in business and helped many traders get independent in the financial markets. If you like to read more about our concepts, subscribe to our free trading tips and check our blog.
Trading is not an easy career: when you add up what it costs you to not act at high probability price-turning points, you might be open to investing in a high probability system and appropriate education.
We highly propose following a business plan for trading success that shall entail:
- Written rules on when to trade and when not
- A financial plan that breaks down the number of trades needed to come to budget.
See our overview of learning elements we will go through in our coaching and training sessions, and we will focus with you on any asset class: Stocks, Options, Futures, and FOREX. The choice is yours. This is what we will share.
- Acting with a system probability > 65%
- Mechanical rules for entry, exit, stop
- Trade at perfect moments only
- Consider overall factors, patterns
- Risk and reward in an acceptable balance
- Risk-averse trading
- Holding positions to target
- Do not add to losers
- Stick with a trading strategy. Follow a business plan – action plan and financial plan
- Trade for meaningful price moves
- Systematic trading
- Having a mentor to learn from
Here is a schematic:
The frightening truth: 76% of private investors lose money!
We base this number on a study we conducted, and if you like to experience why: write us an email, and we will share the details: contact@NeverLossTrading.com Subj.: 76%.
Who had assumed such a high rate of losing traders?
If you want a different trading career, find a solid training and coaching program and contact us to find out what could work for you:
contact@NeverLossTrading.com Subj: Demo.
We are ready to share our experiences, helping private investors to build their trading business. Trading is not a typical career, and you best learn from those who are long-term in this business to cope with the rollercoaster of the financial markets. We are here to help and provide feedback on what you might be doing right or wrong.
Make a change to your trading results, and we will find out which of our systems suits you best.
We are happy to hear back from you,
Thomas Barmann (inventor and founder of NeverLossTrading)
Disclaimer, Terms and Conditions, Privacy | Customer Support
No comments:
Post a Comment