Summary: Trading and investing require an in-depth analysis before deciding to risk your money. Long-term, you only strive for solid returns when you have the patience to wait for the right moment to trade.
In all other businesses, aside from trading, increasing the frequency of actions increases the probability of creating a higher income. Read on and watch the video.
Let me pick an example:
A salesperson who presents services to six clients daily has a 100% higher expectation value than one who offers three times a day, assuming both have the same abilities and density of customers.
Hence, our mindset is conditioned: when you work more, you produce more.
True or true?
Following this conclusion, people apply their typical success pattern to trading, and this is where the trouble starts:
- Accepting lower probability setups increases the loss rate by trading every opportunity.
- Substantially higher losses than gains.
- Discretionary decision on entry and exit, instead of hardcoded entry, exit, and stop decisions.
- Acting predicable, so your stops get stolen.
We can further elaborate; however, we are here to talk about what works, and as such, we want to share what is needed to be a successful trader:
- Trade Qualification over High Frequency
Successful traders find signal combinations that forecast the future price movements of assets with a high likelihood. They focus on what they do best and repeat proven success. It is not the frequency of participating in trades but the qualification process of combining multiple indications to accept high probability setups solely.
On their charts, they look for the following:
- Signals that indicate and print critical price turning points on the chart and act upon them. Do you have proven success in operating and conducting those?
- Combined signals to increase forecast accuracy when analyzing a price projection. By that, they increase the likelihood of an accurate prediction.
2. Mechanical instead of Discretionary Decisions
Many traders act discretionary; however, those actions are hard to specify and repeat; hence we encourage you to work by mechanical rules for entry and exit and share the details in our examples.
3. Risk Limiting Trading
The probability of your system defines how much risk you can take:
- By choosing risk-limiting strategies, you prevent drawdowns.
- Combining risk limiting and leveraging methods allows trading for extra income.
- Working with strategies that let you participate in price moves to the up and downside allows you to trade in any market environment.
- Choosing decision-making times or strategies must fit your life circumstances and the account type.
4. Predictability
Most trades are time-based decisions, where it is pretty obvious where your stops will sit. Hence, we developed the NLT Timeless Concept that proposes all actions purely price based, helping you to act less predictable and independent to not making obvious choices by being in and out of positions faster than other market participants.
Hence, you want to be the trader who waits until the perfect moment is there, and only then do you act. However, this implies that your system gives you a solid participation rate of trading opportunities, so it is not just a wait game.
Here are the variables and the actions your trading system needs to give:
The first charts we share will combine NLT Top-Line, NLT Trend Catching and NLT Timeless Indications, demonstrating how to find high probability setups by combining signal indications: multiple system indicators validate a high probability setup. We pick a swing trading chart first, where the average holding time of a position is about one to five days. By acting purely price based, your trading strategy will not easily expose where your stop is placed, taking care of point 4: predictability.
The timeless chart setup relates risk to reward in an acceptable ratio, producing arrangements complying with the system probability for a positive statistical expectation value.
We operate pure mechanical with buy-stop and sell-stop orders, where trades only get validated with the entry price threshold being surpassed in the next candle; stop, and exit is system-defined at entry.
Acting with NLT Timeless setups takes all the headaches of deciding for three out of four crucial success variables out of the cohesion, and you just qualify your entry signals:
In this first example, we take an entry signal when the following happens:
- The frame around the price movement changes from blue to red or red to blue.
- An NLT signal occurs at the crucial momentum change and spells out buy> or sell<, and the price movement of the next candle validates this by surpassing the set price threshold.
NLT Timeless Chart for /ES, July 13 to 19, 2022
Each price situation on the chart is suitable for a 25-point price move or a value change of the underlying contract of $1,250.
The red crossbar on the signal specifies the stop level, and if you are trend trading instead of trading for a momentum price move, the red line of the frame around the price move (NLT Double Decker) specifies the trailing stop.
In the shared chart, all signals came to target; however, we assume a system probability at or above 65% to forecast the future price movements.
There are additional signals on the chart that either help to take more trades or add to the target, which we neglect in this example.
We apply purely mechanical rules while you learn how to qualify higher and lower probability setups in our mentorship.
Mentioned times are EST:
Situation-1: Sell < $3801,30, July 13, at 8:30 a.m. The signal was validated in the price movement of the next candle, and the trade came to target the same day.
Situation-2: Buy > $3813, July 13, at 10.31 a.m.: A validated signal reached its target between 12:51 p.m. and 1:31 p.m.
Situation-3: Sell < $3788.50, July 13, at 3:50 p.m., validated at the opening candle at 6 p.m., and the trade came to target between 4:38 a.m. and 8 a.m.
Situation-4: Buy > $3766.50, July 14 at the 11: 08 a.m. candle, validated and came to target the same day.
There are additional signals and opportunities to catch trades along the tend move, which we are happy to share in a demonstration with you (ask for our summer special):
contact@NeverLossTrading.com, Subj.: Demo
In the next step, we pick a day trading example where we are trading for about seven points or a price change of the underlying contract of $350. Again, we take trades purely mechanical, while you will learn in our mentorships how to qualify situations and trade at higher rather than lower likelihood situations
NLT Timeless Day Trading Chart for the /ES
Between 7 a.m. and 3 p.m. that day, nine potential trade situations were painted by the NLT Indicators on the chart: six winners and three losing trades: 67% probability.
The chart shows a solid evaluation basis in the following dimensions:
| Variable | Evaluation |
| Participation Rate | Nine trading opportunities in a day session |
| Decision Making Time | Manageable order entry time between five minutes to one hour. |
| Risk Limiting | The red crossbar always limits the risk to a maximum per trade |
| Mechanical Rules | Working with buy-stop and sell-stop bracket orders at pre-specified price movements. |
| Act with low predictability | Do not trade with the crowd; act independently by using the NLT Timeless Concept |
Let us share an example of a day trader who combines systems and trades at crucial price turning points.
Steve focuses on trading the E-Mini S&P 500 Futures and the Crude Oil Futures Contract. His preferred trading time is 7 a.m. to noon. He was used to trading very short time-frames, acting on about eight to ten trade constellations per day, and was constantly monitoring and working with open positions. His success was random. We introduced him to the NLT Timeless Concept combined with NLT Trend Catching and NLT Top-Line to form his decisions. We kept his focus on trading those two futures contracts daily, where he had his experience (why bend an arm when the preferred asset to trade provides enough trading opportunities). Instead of monitoring each transaction, he now walks away and lets the trade come to target or, at times, stop (losing is part of winning). He, on average, conducts a maximum of two to four transactions per day and finishes his trading day around noon, winning 70% of his trades, journals, and controls. You find a specific article on measuring and controlling trading success on our blog.
His focus is on two signal combinations:
- NLT Buy, Sell with Floating, which reports when a price leaves a prior price containment area.
- NLT Buy_T, Sell_T, which indicates an early price turning point.
- He sets bracket orders two ticks above/below the set price threshold: Sell < $4203 will only lead to trade when the price reaches two ticks below; hence, he can operate with a sell-stop at $4202.50. If this price level is not reached in the price movement of the next candle, no trade will be initiated.
- A gray dot specifies the trade exit on the chart, the stop by a red crossbar. By using bracket orders, target and stop get established at order entry.
Our introductory offer to algorithmic trading is TradeColors.com. You trade when two same-color candles are painted on the chart, and the set price threshold is surpassed in the next candle on initiation moves, and sure there are also continuation patterns we follow.
TradeColors.com Day Trading Example
The chart shows 11 solid trading opportunities for trading the E-Mini S&P 500 Futures Contract on July 20, 2022, combining NLT Timeless and TradeColors.com.
When you like to start with TradeColors.com, ask for our summer special of adding NLT Timeless:
contact@NeverLossTrading.com, Subj.: TradeColors.com
We know and acknowledge that every trader is different. Hence, we tune our systems and teach to your specific wants and needs, supporting you to turn yourself into the trader or investor you want to be, teaching on-on-one at your best available days and times.
Let us share an overview of learning elements to take away from our training and coaching sessions, which vary based on the system you choose, from four to twenty hours of teaching.
Summary of learning elements:
- 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
Learning Elements to Trading Success
We also help you to journal your trades. Such a journal provides excellent feedback on how you are developing, and you find a perfect example in this article on our Blog: How to Control Your Trading Results
To succeed in trading, you must work with an experienced coach and learn much about trading. Our #1 competitive advantage is the support and customer service we offer. We work one-on-one with you to specify what we teach to your specific wants and needs; hence, if your knowledge base is not expanding rapidly, you are doing something wrong.
Ongoing education and mentoring are crucial to longevity in this business.
Veteran traders have been through more ups and downs than you can imagine. So whatever you’re going through, experienced pros have probably experienced it already.
If you are ready to learn, meet us in a one-on-one session where we find out which learning program suits you best:
contact@NeverLossTrading.com Subj: Demo.
We are ready to share our experiences and help you build your 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.
Strive for improved 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)
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