Risk aversion is a trading concept that prefers lower-risk investments that offer more predictable returns rather than higher-risk trades with the potential for greater returns but also carry a higher likelihood of loss. In seeking low-risk, high-quality investments: Position sizing, trading with protection, hedging, and managing risk exposure are the buzzwords.
SPY Weekly Development on the NLT Top-Line Chart
The weekly NLT Top-Line chart for SPY of August 8, 2022, to the week of March 20, 2023, going left to right, showed sell signals in the weeks of 8/22 and 9/12 that were confirmed and a confirmed buy signal in the week of 10/17/23. Since the week of 1/16/23, SPY has remained in an NLT Purple Zone, which indicates a time of directional ambiguity; such longer-term investment based on weekly decisions is risky, and we do not take it by being risk-averse or advanced traders:
Why should we commit longer-term if the market does not?
Before going into further details, let us do an overall stock market appraisal:
- The recent bank failures put pressure on the banks, and institutional portfolio holders will reduce risk by divesting from banks, which puts those shares under pressure.
- Inflation, rising interest rates, and a potential recessional tendency weigh on the market.
- The average S&P 500 company performed about 2.5% above expectations in its fourth-quarter earnings. If this tendency continues during the next earning season, which starts in the week of April 10/23, the stock market has upside potential.
- Governments worldwide continue to print money to fuel the war in Ukraine, and for the additional money, after circulation, the stock market might provide the highest return potential; even so, with interest rates between 4% and 5%, Bonds and Notes start to attract investments.
Adding the pros and cons of the stock market influencers: ambiguity might continue; hence, we are waiting for the next signal to commit to the longer term. Until this happens, we focus on shorter-term returns by letting daily- and Intraday charts tell when to buy or sell.
Swing trading and day trading are what fit the risk-averse trading concept, and we now best share some examples:
E-Mini S&P 500 NLT Timeless Day Trading, March 28-29, 2023
On the chart, we highlighted four trad situations, three have a buy or sell threshold, helping you to place your buy-stop or sell-stop, while the signal candle is not yet finished and your order will only fill if the price movement of the next candle comes to the desired price. Simultaneously, you place a bracket order that brings risk and reward into a system-specified balance, allowing the price the required wiggle room to come to target (dot on the chart). In situation three, you see just an indication of floating, so you enter at the next candle and trail the trade with the red line of the blue frame (NLT Double Decker). Each trade was good for a value change of the underlying contract of $350.
There are rules to learn of when and how to accept a day trade, but they are learnable and we work one-on-one with our clients and focus and teach on individual wants and needs. We are long-termers in the trading education business and this far have not found two traders with the same risk tolerance, available time, return focus, and affinity to assets and such individual training sessions are the key to translating our knowledge into our clients.
At times of directional stock market uncertainty, there are still trading opportunities. Below you see a volatility-adjusted NLT chart for GDX (ETF for Gold Miners), and it shows three potential trade situations:
GDX, NLT Volatility Adjusted HF Chart
Hence, there is always something to trade, and we let the chart tell when to buy or sell: when the price threshold set is surpassed in the continuation of the price development. The chart shows three potential trade situations between Jan. 17, 2023, and March 29, 2023, two realized, and the short potential is not yet confirmed.
We could add countless examples, and our blog lists them, but we also offer that you can experience how our systems perform in real time, where we can find out what works best for you.
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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