Trading is a Professional Business and Professionals Make Money with What They Do

How to make money in the financial markets? 

Historically, the stock market was in focus of the private trader. Lately the FOREX market is gaining more and more interest and attracts first time traders by its nature of pure leverage: $2,000 controlling $100,000. 

Another market with long-term focus: Metals. For a good while, I met people who shared their opinion about Gold and Silver: “It will always go up”; however, since Gold dropped from $1,700 per oz. to $1,300, those voices got quiet. An even more drastic development in Silver: Dropping form $40 per oz. to $20. You sure remember the hype in Silver: All cellphones and the new tablets; they all need Silver coated connectors. In the new industrial future, a desperate need for this metal was a given. Silver was stated as the most undervalued material of the century and had to sky rocket to more highs after it reached $40 per oz.

As we know now, many if not all of those predictions did not hold true. What can you do? 

Our answer: Understand supply and demand patterns and how financial markets work, where assigned market makers provide liquidity and thus an offering at multiple price levels on the bid and ask side of an asset. Some still believe that the market makers live from the penny bid/ask-spread, but when you see the amount of people that receive a paycheck from those companies and the building they reside in, you recognize, there must be something else that fuels their cash account.

How do all those fund managers make money? By the 1% maintenance fee they charge? Surely not, but how does that work, because they hold assets in the value of gazillion dollars from 401(k) and mutual fund investors. 

Do yourself a favor and check the income statements of the big prop traders of our today’s world: Goldman Sachs, JP Morgan, Deutsche Bank, UBS, Barclay’s and many more… Even so they 

perfectly hide their source of income through international corporate balance sheet consolidations, the picture gets clear: A lion share of their income results from trading and not from the basic banking business. 

If you bring it all together: 

·         There are many institutional participants who produce and income above or beyond what you are making as a private investor. 

• Following publically shared trade opinion’s does not lead to picking the market direction.
• Fund holders care more about their than your account development.

Conclusion: If you had a way to follow institutional money moves to the up- and downside, you would be better on than you are now. 

What to do to get there? 

Suggestion: Finding a system, which helps you to identify where institutional money is moving. 

Spot and follow Institutional Money Moves with NeverLossTrading

NeverLossTrading Top-Line Chart for Gold Futures July 2013 – Aug. 2014

NeverLossTrading systems spot and follow institutional money moves, offering high probability chart setups with defined entries and exits (colored dot on the chart) and stops (red line).

Surely, this also can be done on lower time frames:

NeverLossTrading Top-Line Chart for Crude Oil Futures: August 14^th and 15^th.

How about stocks? 

IBM on the Daily NeverLossTrading Top-Line Chart: July to August 15, 2014

How about FOREX?

EUR/USD on the NeverLossTrading Daily Top-Line Chart: July to August 15^th 2014

Learn more about NeverLossTrading systems … click here. 

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Please always consider the risk of trading and that past performance cannot be taken indicative for future results.

Good trading,

NeverLossTrading

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401 E. Las Olas Blvd. – Suite 1400

Fort Lauderdale, FL 33301

Trading Silver: NeverLossTrading Style

A trader who wanted to make $5,000 quick on trading silver came to ask how to best do so and this is the way we would do it:

Silver is the wildest horse to trade and those who trade it have to bring a high risk tolerance. The margin requirement to enter the contract is currently around $12,000 and it was shortly even raised to $30,000 per contract. Silver is a big contract: 5000-Torry –Ounces x $40/oz. = $200,000 that one contract controls. Currently, the average daily move of Silver is 1.5 points, which relates to $7,500 move per contract. This sure underlines the point that $5,000 can be made quick, but also lost quick (one tick = 0.005 = $25). The silver market is totally overtraded: The amount of Silver Futures traded every day, is at about 900 times more than physical silver could be supplied. This in leads to spiky short term rallies in both directions: up and down, making silver a high risk contract, which I would recommend for the new trader to stay away from.

On the chart, it looks like Silver sets up for a potential breakout to the upside, but is not there yet. If I am bullish in silver, I would trade SLV (the iShares ETF for Silver) and buy the September 39/40 Call-Spread, for a debit around 44 Cents, which provides the possibility to make $0.56 per share controlled and has 50% likelihood to come in the money, while the downside is totally protected: If Silver again falls off the skies, the maximum that can be lost is $0.44 per share controlled. When silver moves above $40, this Call Spread comes in the money and makes $560 for every $440 invested per contract. This is a potential return of 127% on risk capital with a low capital requirement.

Why would we not buy a $39 call option?

The premium for the call option is $2.49 and totally overrated by the current volatility. The price of one SLV share had to move $2.40 for us to make money at expiration and the likelihood for making the same $560 per contract as in the prior example is 30%. So we would risk $2400 to potentially make $560 on a 30% probability, which make buying a single call option an unacceptable trade.

One of the trades educated by http://NeverLossTrading.com