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NeverLossTrading

7 Key Elements of Successful Trading or Investing for 2014

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There are different interpretations of success, reaching form “participation is everything” to attainment of wealth and fame. Let us take the same range of interpretation for trading/investing then it would read as follows: “Success is making money” to “success is attaining wealth”.

 

Trading is a professional business and professional attainment is measured on score cards. Fund managers performance for example is measured in how close the fund performs to the referring index. For funds, which relate to large caps or the overall stock market, the S&P 500 index is generally used as the base line. If you want to do the same as a private investor, take SPY: The ETF of the S&P 500, which has a year-to-date-November-2013 performance of 27% growth.

 

If your trading/investing account grew with the same rate of return, you met the index. In case you run on a lower return rate, you are in good company, because most of the fund managers: Mutual Funds, Exchange Traded Funds, Hedge Funds are not achieving the average fund performance either; only a small number of funds is beating the S&P 500, where the best in class run at double the return rate of the S&P 500 (We will report separately in giving you a detailed overview on Hedge- and Investment Fund performance).

Let us take a look at the top 10 stocks of the S&P 500 and their year-to-date-November performance:

 

1 Exxon Mobil Corporation Common (XOM): 8.0%

2 Apple Inc. (AAPL): -1.1%

3 Microsoft Corporation (MSFT): 42.6%

4 Johnson & Johnson Common Stock (JNJ): 32.2%

5 General Electric Company Common (GE): 25.8%

6 Google Inc. (GOOG): 43.7%

7 Chevron Corporation Common Stock (CVX): 10.8%

8 Procter & Gamble Company (PG): 21.6%

9 Berkshire Hathaway Inc. Class B (BRK.B): 24.2%

10 Wells Fargo & Company Common Stock (WFC): 26.0%

 

The results show that we have a wide spread of developments, reaching from -1.1% (AAPL) to +43.7% (GOOG), with an average performance of the top 10 stock at a return rate of 23.4%.

 

Take a look at the Berkshire Hathaway Fund performance in relation to the S&P 500: -2.8%, which would be seen as an average good performance for fund managers. However, had you bought SPY-shares, you would have been better on.

 

How can you do better than average and most important, how will you be able to produce wealth, when the markets might not give such a positive development in 2014?

 

You need a trading or investing system, which shall give you the following:

Seven Critical Elements of a Trading

 

  1. Flexibility to trade/invest in various assets. Why various assets? In case stocks halter, institutional money might flow into assets like commodities, currencies, treasuries and you should be prepared to participate in institutional money moves when they happen.
  2. A system, which lets you produce income if the markets move up, down or sideways. In average, markets drop with three to five times the speed they grow. Hence, you should be ready for applying short trading strategies applicable to all kind of account holdings: IRA, 401(k), Cash, Custodian, and Margin.
  3. Clearly defined entries and exits: Institutional money is moving the markets and institutions leave their trace of directional intends. With the right trading system on hand, you can spot and trade along with those actions. Focus on spotting and trading along with institutional money moves, produce constant income and reinvestment. Such method makes you independent from picking the right stocks with long term growth. Imagine, you were able to win two out of three trades, with an average trade duration of four days, aiming for a 1.5% return/trade, making income to the up- or downside; then you are striving for an annual return of 62%, regardless of the directions the market take. If you can apply this method successfully, you will beat the best hedge fund managers of the world by far.
  4. Risk management: Professional traders have clear guidelines of how they act. As a private investor/trader, you need the same: Define the odds ratio for every trade and adjust the lot size of your investments to hedge and leverage your positions accordingly. Have trade repair strategies in place, helping you to turn potential losers into winners for all account types.
  5. Have a method to spot key assets on the move. Never fall in love with a stock or asset. No stock has to grow. The performance of an asset is the result of supply and demand. Apply a system which helps you to visualize when changes in supply and demand occur in an asset and be part of the directional move.
    [*]Journal your performance to see where you do well and where you have needs for improvement. Pros of every genre: Sports, theater, movies, trading, do this and you need to do the same to strive for constant improvement and long-term trading success.
  6. Clear cut documentation for every trade situation and asset, so you can always go back to the drawing board for revisions.

 

Hence, please consider: Those who fail to prepare, prepare to fail.

 

Good trading.

 

Thomas

Edited by NeverLossTrading

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[*]Clearly defined entries and exits: Institutional money is moving the markets and institutions leave their trace of directional intends. With the right trading system on hand, you can spot and trade along with those actions. Focus on spotting and trading along with institutional money moves, produce constant income and reinvestment.

 

Hi Thomas,

 

There is a contradiction here: why would I want to 'trade along with institutional money moves' when, as your article points out, most of them fail to beat the index?

 

BlueHorseshoe

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There are different interpretations of success, reaching form “participation is everything” to attainment of wealth and fame. Let us take the same range of interpretation for trading/investing then it would read as follows: “Success is making money” to “success is attaining wealth”.

 

Trading is a professional business and professional attainment is measured on score cards. Fund managers performance for example is measured in how close the fund performs to the referring index. For funds, which relate to large caps or the overall stock market, the S&P 500 index is generally used as the base line. If you want to do the same as a private investor, take SPY: The ETF of the S&P 500, which has a year-to-date-November-2013 performance of 27% growth.

 

If your trading/investing account grew with the same rate of return, you met the index. In case you run on a lower return rate, you are in good company, because most of the fund managers: Mutual Funds, Exchange Traded Funds, Hedge Funds are not achieving the average fund performance either; only a small number of funds is beating the S&P 500, where the best in class run at double the return rate of the S&P 500 (We will report separately in giving you a detailed overview on Hedge- and Investment Fund performance).

Let us take a look at the top 10 stocks of the S&P 500 and their year-to-date-November performance:

 

1 Exxon Mobil Corporation Common (XOM): 8.0%

2 Apple Inc. (AAPL): -1.1%

3 Microsoft Corporation (MSFT): 42.6%

4 Johnson & Johnson Common Stock (JNJ): 32.2%

5 General Electric Company Common (GE): 25.8%

6 Google Inc. (GOOG): 43.7%

7 Chevron Corporation Common Stock (CVX): 10.8%

8 Procter & Gamble Company (PG): 21.6%

9 Berkshire Hathaway Inc. Class B (BRK.B): 24.2%

10 Wells Fargo & Company Common Stock (WFC): 26.0%

 

The results show that we have a wide spread of developments, reaching from -1.1% (AAPL) to +43.7% (GOOG), with an average performance of the top 10 stock at a return rate of 23.4%.

 

Take a look at the Berkshire Hathaway Fund performance in relation to the S&P 500: -2.8%, which would be seen as an average good performance for fund managers. However, had you bought SPY-shares, you would have been better on.

 

How can you do better than average and most important, how will you be able to produce wealth, when the markets might not give such a positive development in 2014?

 

You need a trading or investing system, which shall give you the following:

Seven Critical Elements of a Trading

 

  1. Flexibility to trade/invest in various assets. Why various assets? In case stocks halter, institutional money might flow into assets like commodities, currencies, treasuries and you should be prepared to participate in institutional money moves when they happen.
  2. A system, which lets you produce income if the markets move up, down or sideways. In average, markets drop with three to five times the speed they grow. Hence, you should be ready for applying short trading strategies applicable to all kind of account holdings: IRA, 401(k), Cash, Custodian, and Margin.
  3. Clearly defined entries and exits: Institutional money is moving the markets and institutions leave their trace of directional intends. With the right trading system on hand, you can spot and trade along with those actions. Focus on spotting and trading along with institutional money moves, produce constant income and reinvestment. Such method makes you independent from picking the right stocks with long term growth. Imagine, you were able to win two out of three trades, with an average trade duration of four days, aiming for a 1.5% return/trade, making income to the up- or downside; then you are striving for an annual return of 62%, regardless of the directions the market take. If you can apply this method successfully, you will beat the best hedge fund managers of the world by far.
  4. Risk management: Professional traders have clear guidelines of how they act. As a private investor/trader, you need the same: Define the odds ratio for every trade and adjust the lot size of your investments to hedge and leverage your positions accordingly. Have trade repair strategies in place, helping you to turn potential losers into winners for all account types.
  5. Have a method to spot key assets on the move. Never fall in love with a stock or asset. No stock has to grow. The performance of an asset is the result of supply and demand. Apply a system which helps you to visualize when changes in supply and demand occur in an asset and be part of the directional move.
    [*]Journal your performance to see where you do well and where you have needs for improvement. Pros of every genre: Sports, theater, movies, trading, do this and you need to do the same to strive for constant improvement and long-term trading success.
  6. Clear cut documentation for every trade situation and asset, so you can always go back to the drawing board for revisions.

 

Hence, please consider: Those who fail to prepare, prepare to fail.

 

Good trading.

 

Thomas

 

excellent post, especially the part with the risk management.....from my point of view that is the most important part

 

TW

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Hi Thomas,

 

There is a contradiction here: why would I want to 'trade along with institutional money moves' when, as your article points out, most of them fail to beat the index?

 

BlueHorseshoe

 

An excellent question that makes me think about my own practices.

 

I think it comes down to entries and exits, patience and size with respect to liquidity. We can all be trading in the same direction and yet more than half are likely to be taking losses (hypothesis). How come?

 

The institutional guys want to be long perhaps from x to y so they start scaling in as price goes down and then adding as price goes up. Then exiting or reversing for various reasons. Their average entry and exit can be poor even though they were positioned with the larger time frame flow that they were creating as a group.

 

Most other traders just screw it up for various reasons.

 

You and I, on the other hand, read the flow, identified positions for entry and exit that were likely to deliver good expectancy, and then executed our plans. We took advantage of our willingness to wait and our small relative size to profit where many mr bigs performed poorly.

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Hi Thomas,

 

There is a contradiction here: why would I want to 'trade along with institutional money moves' when, as your article points out, most of them fail to beat the index?

 

BlueHorseshoe

 

....because you dont have the same index OR mandate as them, and while they are stuck replicating an index with cash and leverage limits, you are not.

 

Most managers are unlikely to beat their index or mandate - law of numbers, costs, talent, etc etc etc - This is the argument of passive v active investing. ....

However - as Kiwi (good to hear from you) says - we have the luxury of patience, we dont have mandates, we can often use our small size to pick entries and exits, we can use leverage of various amounts etc......and this is what we should be doing to ride the coattails of institutional money moves (alternatively known as trends) when they occur.

 

Its probably no surprise that some of the managers that actually have made good money over the years dont have an index they solely concentrate on. They know that opportunities abound, they just abound in many instruments at various times.

 

...as a side thought - it is always worth comparing how you go with an unleveraged amount compared to the index you trade in. (despite the various issues of risk v return and standard deviations etc)

 

example: lets say the stock index you trade is up 25% for the year, you normally trade in one contract and that contract is roughly the equivalent of $100k per contract. So a simple unleveraged investor would have done nothing and made 25k.

 

while the $10k trading account might have made 100% for the year and 10K.....in profits trading that one contract.

 

....and then you extrapolate that over, 1 month, 3 years, 10 years......

................................food for thought.

 

///////////////

otherwise I liked the original article.

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I think it comes down to entries and exits, patience and size with respect to liquidity. We can all be trading in the same direction and yet more than half are likely to be taking losses (hypothesis). How come?

 

....because you dont have the same index OR mandate as them, and while they are stuck replicating an index with cash and leverage limits, you are not.

 

I'm not sure that I buy this argument :) Yes, I can certainly do things a multi-billion dollar fund cannot . . . but there are a heck of a lot more things they can do that I can't . . .

 

And really, all that you are both are saying is that we can beat these funds by doing something different to them, albeit aligned with the same long term trend, rather than by doing the same as them. Which I would agree with.

 

If your entries and exits aren't the same, or you're using varying amounts of leverage (different position sizing, to all intents and purposes), then you're not trading the same. You're doing something different, and potentially better. If you follow what these institutional participants do in any precise sense, then odds are you'll underperform the index.

 

I do agree with SIYUA's point that those who have good long term performance records aren't really concerned with benchmarking, but rather trade for absolute returns.

 

Anyway, whatever you both do or don't do - best wishes for 2014!

 

Regards,

 

BlueHorseshoe

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You earn x% trading. If x% is greater than anything you can earn elsewhere, then you trade. if x% is < 0, then you don't trade.

 

It makes no difference whatsoever what funds, money managers, other traders, or the market does.

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I'm not sure that I buy this argument :) Yes, I can certainly do things a multi-billion dollar fund cannot . . . but there are a heck of a lot more things they can do that I can't . . .

 

And really, all that you are both are saying is that we can beat these funds by doing something different to them, albeit aligned with the same long term trend, rather than by doing the same as them. Which I would agree with.

 

If your entries and exits aren't the same, or you're using varying amounts of leverage (different position sizing, to all intents and purposes), then you're not trading the same. You're doing something different, and potentially better. If you follow what these institutional participants do in any precise sense, then odds are you'll underperform the index.

 

I do agree with SIYUA's point that those who have good long term performance records aren't really concerned with benchmarking, but rather trade for absolute returns.

 

Anyway, whatever you both do or don't do - best wishes for 2014!

 

Regards,

 

BlueHorseshoe

 

yes - if you follow them, then you will probably beat them as you save on fees!

 

Point being - most managers dont beat the benchmark they are tracked against, most have strict mandates (they are far stricter than many might think) especially the ones who have applicable mandates and benchmarks that they are trying to replicate ...and while you say they can do a lot more than you....you might be surprised at how wrong you are on that. (:roll eyes: - its pathetic hearing fund manager friends say how well they did beating their index when they lost money over the year)

 

I actually dont think we need to concern ourselves with beating any particular fund or index....we have flexibility to be able to be true absolute return folks. Who cares if this year the SP went up 26% and you made 15%, especially if you made 155 a year for the last 10 years. (One of the reasons why many are simply undercapitalised or over leveraged IMHO).

 

Its always an interesting question to potential investors (one which you should not really ask if you want to be taken seriously).....so if you are happy with 15% a year, and I were to make that for you in a quarter then I should stop trading right? - watch your business dry up as they then say they wont pay you fees to do nothing, even though you did what they wanted in half the time.........the funds management game is a very funny business (and scale changes everything). There is also the funds management industry, the hedge funds (quasi long only or our proprietary models as BS), and the few 'true hedge funds'

 

However......following them is the perfect thing to do....look back at last year, and think of a few things that were moving and you did not need any great indicator, fundamental analysis or much else - gold down, SandP up, Japan up, Yen down, GBPAUD rally (saved me some $ here bt based more on my circumstances :)).....you only needed to get on a few of these things with the trend, use a bit of leverage, a little risk (you might have been stopped out one or two times maybe) and then let it ride a little....so long as you did not fight the trend. (definitions of trend not withstanding)

how would you have gone?

 

Easy in hindsight of course, but there is nothing stopping us as individuals keeping abreast of what instos think, what they are actually putting their money into (easy to see on a chart) and then coat tailing them - understanding markets is generally easier than mastering a market IMHO - it does not need to be much harder than that. (Getting away from this has been an error of mine in the past)

 

You too enjoy 2014 - (We had a crazy crazy Dutch firework spectacular last night....f...n nuts when you let a bunch of drunks, children and anyone have unfettered access to fireworks! Everywhere, crazy......but fun :)

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    • Brexit Aftermath: The Market Reaction Of Bitcoin, Gold And Pound Sterling To Headline News In The EURO Zone   After the UK made it public to exit from the EURO bloc, the market cap for Bitcoin and Gold has increased almost by $133 billion and $1 trillion. Is this the Brexit aftermath?   As it is, the end may be near for Brexit. In the recent declaration an accord is reached between the British government and the EU, everyone is on the lookout for the final date Brexit will conclude. And based on this scenario, an analysis is drawn on the aftermath of this separation in the politics of the EURO bloc and the effect on the price of Bitcoin, Gold and pound sterling.   Bitcoin: Since the start of Brexit, Bitcoin’s market cap had spiked higher and recovered about $10 billion worth. Before Brexit, the cryptocurrency of the first choice had been stable in price after crashing to a market cap of about $2.9 billion low around January 2015. However, after the crash, the cryptocurrency had spiked to about 300% within 18 months while the next super halving of the project is expected on the network from 25 to 12.5 fresh Bitcoin’s per 10 minutes.   As of mid-2016, the most liquid GBP market was the London based Coinfloor exchange. The exchange did around 772 Bitcoins’ worth of volume that day, valued back then at around $4.9 million, with data from the technical back end at the Trading view.   The Pound Sterling: The British national currency had crashed by almost 20% on the night of the vote after hitting a momentary high of about $1.5 versus the USD for about 8 months. Since crashing to a low of about $1.2 as at March 2017, the Pound sterling had rallied 6% within a 4-week time frame, after the UK parliament decided to vote and activate the Article 50 while then the Brexit journey began for the UK taking it two years to discuss its planned exit from the EURO bloc.     Gold: The safe-haven asset also spiked higher around the same time frame from mid-March to mid-April 2017 with its price rising about 7% versus the USD. Nevertheless, this scenario didn’t play out on Bitcoin as in March 2017, beginning with its price at $1000, Bitcoin had surged to hit an all-time value of about $1300, as a result of markets expectation for a Bitcoin ETF being endorsed. However, after its nullification was declared on 10th March 2017, the cryptocurrency fell to a low of about $888 which occurred concurrently with the UK’s law passage for its exit from EURO bloc. Ever since then as the UK’s Brexit discussions with the EU raged on, so did the Pound against the US-dollar and Bitcoin gained more to its price.   Bitcoin, Gold, and Pound Sterling Reactions to Brexit During this timeframe transversing Brexit discussion and its process, the Pound lost the majority of its 15% gains recovered, to tumble from a high of $1.43 to hit $1.20 on 3 September. In a similar multi-day timeframe, gold broke out of its basic $1400 resistance level to rally 15% versus the US-dollar. While Bitcoin gained higher, then again, stayed on the level around $8,000—yet the genuine story of those 17 months incorporates the cryptocurrency crashing towards $3,000 (December 2018) preceding the move spiking to a high of almost $14,000 in June this year.   Source: https://learn2.trade     
    • Despite Running To The Highest Close In Six Months, GBPUSD May Fail To Reverse   GBPUSD Price Analysis – October 20 The GBPUSD had closed on Friday above its opening price after recovering from early selling pressure and trending higher for the 4th day consecutively in a row. After failing to reverse from its highs, the FX pair is unstable and due to weekend UK parliament vote on Brexit, with this scenario, the pair is likely to gap while it reopens on Monday morning in Asia (Sunday evening in the US).   Key Levels Resistance Levels: 1.3301, 1.3185, 1.2988   Support Levels: 1.2582, 1.2204, 1.1958   GBPUSD Long term Trend: Bullish On the daily picture, the bulls took charge in the previous session and exited the day above its opening price, however, the pair failed to move past the prior’s day’s trading range and the price likewise failed to reverse below the previous day’s range.   The GBPUSD had rallied upwards to as high as the level at 1.2988 last week, before forming a temporary top there. In the case of a reverse, the fall may be contained by the level at 1.2582 resistance turned support to bring rise resumption.     GBPUSD Short term Trend: Bullish An impermanent top is structured on the level at 1.2988 and intraday bias in GBPUSD stays on the upside. A few consolidations may be seen. Be that as it may, any pullback ought to be contained above the level at 1.2582 support to bring rise resumption.   Meanwhile, on the upside, a break of the level at 1.2988 will stretch out the recovery from the level at 1.1958 to 1.2582 from 1.2204 at 1.3185 next. Without bias analysis, the outlook is bullish and displaying an intact uptrend in the short and long-term.   Source: https://learn2.trade 
    • Date : 21st October 2019. MACRO EVENTS & NEWS OF 21st October 2019.The week ahead will definitely not be a quite one, with high anxiety on Brexit, the last ECB policy meeting before Mario draghi hand over the ECB presidency to Christine Lagarde and few significant US data prior FED on October 30.Monday – 21 October 2019   Producer Price Index (EUR, GMT 06:00) – The German PPI is expected to drop to -0.2% for September. As expected readings would result in a y/y loss of 0.3% for headline PPI, versus a 0.3% pace for August. Tuesday – 22 October 2019   Retail Sales (CAD, GMT 12:30) – Canadian sales are expected to have increased by 0.6% m/m in August compared to 0.4% m/m in July, with the ex-autos component down -0.3%. Existing Home Sales (USD, GMT 14:00) – Home sales have regained their status as an important indicator after the financial crisis and can have a strong effect on the markets. The release is expected to record a slight -0.2% pull-back in September to a 5.480 mln pace, after a bounce to 5.490 mln in August. In Q2, we saw an average sales pace of 5.287 mln, and we expect a better 5.463 mln pace in Q3. Thursday – 24 October 2019   Services and Manufacturing PMI (EUR, GMT 08:30-09:00) – September PMIs showed a marked contraction in manufacturing activity and a sharp slowdown in services sector growth. This picture is likely to be seen again in the preliminary readings for October, as German Manufacturing PMI has been forecast at 40 and composite at 49.2, which it is still below neutral. Meanwhile, Services PMI is expected to fall to 51.2. The overall Markit for Eurozone is seen at 49.4, signalling stagnation and highlighting the risk that the weakness in manufacturing sectors is spreading. Interest Rate Decision, Monetary Policy Statement and Press Conference (EUR, GMT 11:45 & 12:30) – The ECB is widely expected to keep policy settings on hold after Draghi’s parting shot at the last meeting. The outgoing president pushed through another deposit rate cut and an open ended asset purchase program against the opposition of some of the more senior national central bank heads and incoming president Lagarde will face the task of uniting the board and dealing with growing demands for a comprehensive revision of the ECB’s policy setting framework and in particular the inflation target. Draghi’s last press conference meanwhile will likely focus heavily on calls for fiscal measures to boost the economy in a challenging international environment. Durable Goods (USD, GMT 12:30) – Durable goods orders are expected to fall -1.8% in September, after gains of 0.2% in August, thanks to an expected transportation orders drop. Boeing orders rose to a still-lean 25 from 18 in August. Services and Manufacturing PMI (USD, GMT 13:45) – Preliminary Manufacturing are expected to slip in October, to 50.1 from 51.1, while Services PMIs are likely to rise to 51.3 from 50.9, indicating a slowdown in the sector that has been hit by global trade tensions. Friday – 25 October 2019   German IFO (EUR, GMT 08:00) – In September, the German IFO business confidence came in slightly higher than expected at 94.6. In October, however, the overall business climate reading is seen slightly lower at 94.4. The more forward looking expectations reading is anticipated at 91.8 from 90.8. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.Please note that times displayed based on local time zone and are from time of writing this report.Click HERE to access the full HotForex Economic calendar.Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!Click HERE to READ more Market news. Andria Pichidi Market Analyst HotForex Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • Perfect Trend Lines, PTL, is a short-term trend trading indicator. The lines showing the trend in this indicator is not straight lines like normal trend lines. PTL indicator calculation is simple. First take the 7 bar high and low, then the 3 bar high and low. If the close price is above the 7 bar high and 3 bar high, then an uptrend is identified. When the close price is below the 7 bar low and 3 bar low then a downtrend is identified. These bars are considered as strong trend bars. The magenta line is the 7 bar high or low depending on the trend. The cyan line is the 3 bar high or low depending on trend direction. When price is trading between these 2 lines trend strength is weak.   A magenta diamond shape appears when sell signal is generated. Cyan diamond shape appears for a buy signal. The magenta line can be used as stop loss. The cyan line provides a tighter stop loss level. Strong downtrend bars are marked by a magenta dot at the bar high and strong uptrend bars are marked by a cyan dot at the bottom of the bar.   PTL.zip
    • Qualitative Quantitative Estimation (QQE) is based on a combination of smoothed Moving Average of RSI along with the average true range ATR. Volatile assets such as forex, futures, stocks etc. can be monitored using the Qualitative Quantitative Estimation (QQE) indicator. The indicator displays two lines; a fast and a slow-moving trailing stop line.  The level 50 is important in QQE indicator. When the fast line (green line) is above 50, trend is considered bullish, if it is below 50, downtrend is assumed.   The original QQE indicator trading strategy is to buy when the green line is above 50 and it cross above dotted red line. For a sell trade the green line is below 50 and green line cross below dotted red line. Some traders open Buy position when the green line is below 50 and it cross above red line. Another method is divergence between price and QQE indicator. When price makes new lows and QQE indicator’s green line fails to make new lows, buy position can be opened. When price makes New highs and QQE green line fails to make new highs, sell position can be opened. QQE.zip
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