As a trader or investor, you want to predict or forecast the future price happening of underlying assets like stocks, options, futures, and FOREX. We want to help you with modern algorithms, including AI components, to make sound and highly probable decisions in the financial markets.
Predicting and forecasting price movements are terms often used interchangeably but have distinct differences.
Predicting refers to making an educated guess or estimating the future based on existing data and trends. It can be a subjective process and may involve intuition or experience. Forecasting, on the other hand, is a more formal and quantitative process of predicting future trends and events. It uses statistical and mathematical models to analyze data and predict future outcomes. Forecasts often consider a range of possible scenarios and assess the likelihood of each one. They also typically incorporate uncertainty and risk analysis.
In summary, while predicting can be based on intuition or experience, forecasting involves a more formal and systematic approach that incorporates statistical and mathematical models and considers a range of possible outcomes. In our aim to keep discretionary decisions to a minimum, we rely on quantitative models to specify and forecast price moves by defining the following:
- Entry Conditions: When will a price move be initiated, expressed by a buy or sell threshold, which starts the model and forecast?
- Specifying the highly likely exit point for the trade accepted
- Defining the likelihood of the setup to come to target by the strength of the signal setup at entry
- Calculating the statistical volatility of the observed asset to define the stop, so a trade can be carried to the specified exit without getting stopped by the natural price movement of the underlying
- Relating risk and reward with the probability of the setup at the entry to accept or pass on the trading opportunity
Probability thinking in trading considers the likelihood of different forecasts coming to target by the specified conditions we just spelled out. With the help of our systems and their components, traders can make informed decisions and actions. Probability thinking involves recognizing that uncertainty and randomness are inherent in many situations where one thing is for sure: 100% certainty is not achievable by any system or indicator.
If you want to start making money trading, do not make one bet after another, trying the bend the odds your way by widespread participation. The key to trading or investing success is to find situations where the odds are in your favor and act. When the price movement does not allow acting, stay out. When you learn and inhale that hard work gets the job done, we propose that less trading is more; it often provides a contradictive challenge our students learn to master. Think of it this way: If you are operating under a 50% likelihood of forecasting the future price happening, then you are acting like you are at a coin toss. Losing four times in a row has only a 6.5% likelihood; hence, you can celebrate some winners but not many to bring you to long-term profitability. If you like to read more details about less trading is more, write us an email, and we will send you a copy of our concept:
contact@NeverLossTrading.com Subj.: Less is More
High-probability trading refers to a strategy that seeks to identify trades with a higher likelihood of success than failure. We put that minimum requirement to a 65% likelihood. In reality, most retail traders operate by forecasting future price happenings with a 53% to 55% probability. When we compare a 55% and 65% system and calculate the chance of winning six or more trades out of ten: the 55% system gives us a likelihood of 50.4% (random), while the 65% system provides a 75.1% chance of winning six or more trades out of ten.
The key to successful high-probability trading is a disciplined approach and a sound understanding of the markets. In addition, traders must recognize and act on opportunities quickly while minimizing risk exposure.
Trading is not easy, but it is learnable: We teach all this and more in personal trading and coaching sessions at your best available days and hours.
Let us dive into some examples of forecasting the future price of different assets.
Weekly charts provide a solid basis for forecasting the price happening of assets longer-term. We extrapolate or forecast price moves for the next five to ten weeks based on our indicators; however, one of our indicators proposes not to engage in longer-term happenings. Let us explain why:
Our algorithm’s color upside price moves in blue and moves to the downside in red. However, when the market is undecided, and we have ambiguity in the price direction, an NLT Purple Zone is put on the chart, saying that engaging at this time frame is risky. We do the most naturally; we do not take trades from weekly indications but instead rely on lower time frames when there is no directional ambiguity.
SPY, S&P 500 Index, Weekly NLT Top-Line Chart
You see a weekly chart between 8/15/22 and 3/10/23. The first two sell signal were confirmed by the price movement of the next candle surpassing the sell threshold: Sell < $405.25 and sell < 382.11. Dots on the chart specify the targets for the trade. The buy signal from the week of 10/17/22 was confirmed and led to a trade to the following horizontal dashed line.
Since the week of 1/16/23, the price development of the S&P 500 has been in an NLT Purple Zone. However, since 85% of the stocks follow the index, it is not a good time for a longer-term buy&hold, and you best scale down your decision-making time frame. So why would you commit when the overall market does not?
However, there are still opportunities for swing or day traders to participate in shorter-term price movements. At the same time, you must operate with risk-limiting strategies that let you follow price moves to the up and downside. We teach those in our mentorships.
In the following chart, the NLT NLT Top and Bottom Finder paint crucial price turning points on the chart, and we analyze the happening in a two-step approach.
On 2/3/2023, we painted a longer-term happening on the chart and followed up the last indication based on March 10, 2023.
SPX, S&P 500 Index, NLT HF Price Turning Points
Imagine you were able to act on these crucial swing trading points, going long or short with risk-limiting and even leveraging strategies. What would that do to your trading?
The indicator combination you see is part of our NLT HF Trading Concept. In the next step, we check for the price development of the 2/3/23 signal, where the target of this indicator is at the next dashed crossline, and the price move indication was good for 235 SPX points. So if you traded, for example, the E-Mini S&P 500 futures contract, this would have given you an income of $11,750 per contract with a capital engagement of about $12,000 in about four weeks.
SPX, S&P 500 Index, NLT HF Price Turning Points
Hence, there are always opportunities, and when you trade what you see, you can follow strong price turning points with a high probability.
If you instead prefer day trading, we provide a model where the candles on the chart are created price based instead of time-based. With the help of the NLT Timeless Concept, we cut overall price moves into risk-manageable units which provide multiple opportunities:
- Every setup is pre-approved on risk to reward
- Your entries and stops are not predictable compared to time-based charts
- The chart gave you between two and ten minutes to act
- You work with buy-stop and sell-stop bracket orders: entering, entry, exit, and stop at once.
- Targets show as dots on the chart
- Stops are at red crossbars
- Uptrends are framed in blue, downtrends in red
- If you want to trail orders, use the red line on the chart
E-Mini S&P 500 Futures, NLT Timeless March 10, 2023
On the chart, we highlighted six trading opportunities and let you decide their outcome, reaching the gray dot or getting closed by the price move reversing to the red crossbar: high probability trading at its best.
If you like to experience how our systems work life:
contact@NeverLossTrading.com Subj.: Demo
NeverLossTrading is a trading education and software company that aims to help traders improve their performance and profitability in the financial markets by:
- Personalized Coaching: in one-on-one sessions, you learn customized trading strategies that fit your unique needs and goals. This personalized approach can help traders better understand the markets and make more informed trading decisions.
- Trading Software: NeverLossTrading offers proprietary software that provides real-time market analysis and trading signals. Our indicators are designed to help traders automate their trading decisions and execute trades with greater accuracy and efficiency.
- Comprehensive Training: We provide extensive training and education materials to help traders learn the fundamentals of trading and develop the skills and knowledge necessary to succeed in the markets.
To succeed in trading, you best work with an experienced coach. Our #1 competitive advantage is the support and customer service we offer. Veteran traders have been through more ups and downs than you can imagine. So, experienced pros have probably experienced whatever you’re going through.
If you are ready to make a difference in your trading: We are happy 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 determine which of our systems suits you best. The markets changed, and if you do not change your trading strategies with them, it can be a very costly undertaking. The markets changed, and it can be an expensive undertaking if you do not change your trading strategies with them. However, you can make a difference with the right skills and tools!
Hence, take trading seriously, build the skills, and acquire the tools needed. Trading success has a structure you can create and follow.
Thomas Barmann (inventor and founder of NeverLossTrading)
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