Make the trend your friend is the fundamental slogan traders and investors try to follow; however, you only know in hindsight when a momentum price move led to a trend or not. Learn how you can act on momentum price changes and catch trends early.
For over a decade, we had upwards-moving stock markets, where technology stocks led the markets to new highs.
S&P 500 and NADASQ 100 Development since 2008
The above chart shows the monthly S&P 500 and the NASDAQ 100 development since 2008. NASDAQ stocks took the lead and built the basis of the strong uptrend: AAPL, AMZN, MSFT, and TSLA are just some of the examples of exceptional value-gaining stocks:
Value Development Example of NASDAQ 100 Stocks
However, this trend broke at the beginning of 2022, and our NeverLossTrading Top-Line Chart showed more sell than buy signals in alternating sequences this year.
NLT Top-Line Daily Stock Market Development 2022
When the direction of a trend is known in hindsight:
How to make the trend your friend; when you do not know where to start or end?
Every trader or investor has to come up with a conclusion or strategy for deciding in such a market environment, where principles that have worked for more than ten years are no more applicable.
Behavior or habit change is a challenge for everybody; however, if you continue with the strategy you know, it might end up being a costly endeavor, being invested in the markets:
- The average large-cap stock market investor who follows the S&P 500 is down 20% year-to-date
- NASDAQ 100 investors are down about 25%
Hence, we propose a behavioral change and new strategies:
- Trade at crucial price turning points when the momentum changes from buy to sell and sell to buy with the help of solid indicators like the ones of NLT Top-Line.
- Let the system extrapolate how far a price move shall reach (1-SPU, 2-SPU, trailing with the red NLT Double Decker Line on the chart)
- Have strategies on hand to participate in long and short opportunities, even from your IRAs
- Act by letting the system and chart tell when to buy or sell
When you check through our chart, it is evident how the system forecasted price turning points with high accuracy. We magnify the most recent price move of the E-Mini S&P 500 futures contract, symbolic of the overall stock market on the daily NLT Top-Line chart.
Stock Market Development 7/14 – 9/9/22, NLT Top-Line
What would be different if you knew about those crucial price turning points?
Above, we used a daily chart as an example; however, the system will also alert price momentum changes on lower timeframes and on what we call the NeverLossTrading Timeless concept.
So what do you need to succeed in our new market environment?
- You need a high probability system: accuracy of forecasting price movements ≥ 65%, giving you a reason for entering each trade. You always have a stop-loss and a target price level to take profits. For example, in the chart above, NLT Top-Line spells out price thresholds to enter into a long or short trade: Buy >, Sell <. When the critical price level is surpassed in the next candle’s price development, your order goes to the market: Buy-Stop or Sell-Stop Bracket Order.
- Market action can change quickly, and you need to be able to change with it. Hence, you need the capabilities and strategies on hand to switch from participating in up and downside moves.
- Trade where prices move, not where you think they should. Let the chart tell when to buy or sell and have a system-based trade finder or alert report to notice when institutional money moves in or out of assets.
- Adjust your trade size risk-based and in relation to the strength of the signal you are acting upon. The most you control in trading is the risk you accept.
- Keep a meaningful relation between risk and reward that considers a positive reward/risk ratio:(Return * Signal Probability) / (Risk * (1- Signal Probability) > 1.5
- Let your system give you a time perspective by when the target needs to be hit: in NLT Top-Line, the target-1 shall be hit after a maximum of five bars, target-2 after 10-bars.
- Never cut winners short and let losers run: this will ruin your trading account. Traders tend to press hard when they are down, and they get careless when they are up. You should have the same disciplined approach in either situation. So, learn from a professional who can teach you the needed habits to apply for being a consistent trader.
- Trade or invest according to your best available days and times. We use the words traders and investors synonymously; traders hold positions in shorter terms like intraday or multiple days, investors in various weeks, months, or years. Habit and action are the same; in shorter-term trading, you have less time to form sound decisions.
- Have and follow a business plan for trading success, including an action plan: when to trade and when not. In addition, a financial plan assumes how often you trade and the returns you strive for. Unfortunately, many traders take random information from different sources and put it together without a successful plan. The best way to learn to make money trading is to study a proven strategy and then carefully apply it in real-world market conditions.
As you see, not an easy undertaking:
If trading or investing were easy, nobody would ever go to work. They are not, but they are learnable.
To succeed in trading, you best 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, experienced pros have probably experienced it whatever you’re going through.
If you are ready to make a difference to your trading:
contact@NeverLossTrading.com Subj.: Consulting Hour
Our charts offer a straightforward and effective way to analyze the overall market and its direction. When you consider that about 75% of the stocks’ show price moves in tune with the overall market, you know what to do and can act by letting the chart tell when to buy or sell!
Shorting stocks will not be allowed if you trade from an IRA; however, you can either operate with reverse ETFs or deal with the NLT Delta Force Options Concept.
Our blog and YouTube channel hold many examples of systems and decision-making points. Let us give you a day trading example:
The following charts use what we call the NLT Timeless Model. Instead of drawing a candle from a time perspective, we let the system define a price change as the crucial parameter to start a new candle. Hence, time is taken out of cohesion, and this will make your decisions less predictable; however, the stronger argument of the idea is:
We are helping you to simplify your trading decisions by specifying conditions to execute bracket or OCO orders along with the price movement of underlying assets.
The system works for all asset classes: Stocks, Futures, and FOREX.
In the base economic principle, price results from a change in supply and demand. Time is not considered a determining factor. The model assumes that markets regulate themselves instantaneously by economic principle, and we bring this on the chart for you to act at crucial price turning points.
NLT Timeless Day Trading Chart
The chart shows multiple trade situations along the price movement of the E-Mini S&P 500 futures contract.
Our signals formulate a price threshold, like Sell < $4,111.30; hence, you can place a buy-stop-order to $4,111, and your order will only fill if the required price point is reached in the price movement of the next candle.
Dots on the chart specify the exit; however, the order exit is also system-specified at the entry and such is the stop.
Following specific rules in trading is essential, leaving only very little room for discretionary decisions. Very little interpretation:
Trade What You See! Let the chart tell when to buy or sell!
By the way, the brand name NeverLossTrading does not promise never to lose a trade; it derives from the concept of trade repair, and Never Stop Loss Trading was a bit lengthy.
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. Here is a graphical description of vital trading elements:
contact@NeverLossTrading.com Subj.: Consulting Hour
Vital Elements of Trading Success
Thomas Barmann (inventor and founder of NeverLossTrading)
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