FTSE100 Recent activity

If you’ve been an avid reader of my “How to make money from the markets” recent blog posts, then you’ll have read about the THT Cornerstone or simply the 1,2 & 3 set-up.

This pattern is VERY reliable and even more so when you see it at major lows – however it crops up in a lot of places.

This is a live chart of the FTSE100 Index of the UK’s major market and is up to date

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Again if you look at the WEEKLY chart – the DTosc Indicator is bullish, you’d of been on ultra high alert watching the daily chart last week for a daily DTosc bullish reversal!

Expectation? – If the market is genuinely in the THT Cornerstone set-up then 50% as a minimum of the waterfall plunge range – this should be confirmed if the high between #2 & #3 is taken out and closed above

It really is as simple as that

Any Gann fan’s out there will notice that the pattern is also a Gann Triple Bottom

HOW CAN THIS COWBOY BE USING METHODS FROM OVER 100 YEARS AGO TO BEAT THE MARKET IN TODAY’S HIGH ALGO AND HFT MARKETS?

Answer is – Markets behave the SAME regardless of what crap is flouted out there – focus on set-ups that actually WORK, then drill down to very sound risk and money management rules and you will succeed in this game – regardless of what is spouted out there in “Trader World” (the last time I looked was back in 2012) is mostly made up as it’s an unregulated market, very very very few people who trade make consistent annual profits of (unleveraged) 50% or more – exceptionally few people.

Remember I’ve managed to be successful without reading or participating in world of the trader – all I’ve done is look at lots and lots and lots of charts

UPDATE – obviously this one failed as the rules for the set-up need the 3rd bottom to be a higher low = no trade would have been taken either as the “trigger” was not confirmed

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How to make money from the markets – getting the 25%

This post shows you how to get that elusive 25%+ return from the markets

If it were easy everyone would be doing it – it’s not easy, remember you’r trading blank space to the right of all the price data, every trade you take you enter the unknown – if you cannot handle that amount of pressure then don’t trade.

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Now – lets assume a trading account of £10k

The risk of this trade would be: 49.02p

If we didn’t want to risk more than 5% of our account £500 per trade then this would allow us to purchase 1019 shares

so IF we risked £500 on this position = 5% of our account, then you can see by the EX RET grey lines we’d of made between 2-3 times our risk – this is solely dependent upon how we’d of exited the position

Let’s assume we got 2 x risk = £1,000 profit or 2 x 5% = 10% return in 3 months

Then you’d simply repeat this process on the next market to display the entry requirements over the course of the year and you will get close to the desired amount.

Now in the chart above you had 2 choices in the zone for taking the 10% profit – either take the 10% profit and start hunting for the next market displaying the set-up OR sit through a decline/pullback in the hope that the market would just be slightly correcting and then advance further upwards – if you took that risk you can see this trade would have delivered 20%+

That decision is up to you – I prefer to get in and out and not risk pullbacks, as sometimes the pullbacks retrace too much and rather than have a 10% profit you end up with a 3% profit etc – there’s NO norm with this (you could if you wanted sell 50% of your position @ 10% and then trail the remaining half etc)

Now the very very important bit – the market above is the FTSE250 Index:

  • Indexes don’t MOVE as much or as fast as Individual markets, I’ve shown you the slow market but you can see it still works
  • If you look at Individual shares and the market puts in a #3 low with a small narrow range bar, it will = more profit return should the trade work
  • Remember not all trades will work, you have no choice but to expect some losing trades during the year

If your risk tolerance is only say 3%, then you can work out you need to trade a certain number of times a year to hit the 25% goal.

The KEY to this is that you simply REPEAT this method a FEW times a year to get the 25%  – sitting tight for the 25% is pretty risky in itself as a method, it does work but not as much as you’d like, so a few snatched 10% profits over the year is the way I do business with the market and it’s pretty successful

Then the following year your risk then becomes 3% or whatever you choose of the new account balance – your £10k might now be worth £12,500, so 3% of that amount will be £375 instead of just £300 risk per trade.

This is just 1 or many ways to catch the lows, but at least you can see and have a proven method that ACTUALLY works in any market and on any time-frame.

As you can see you’re not fighting the market, you’re trading WITH the trend, you’re getting in at the smart end very early on – If you are thinking “….Catching a falling knife” then you need to take 10 mins and re-read, research and clear your thinking, as this method isn’t catching the falling knife, it’s ALREADY fallen, lodged into the table and violently vibrating back and forth – all we’re doing is grabbing the handle as it’s stopped falling and getting in right at the start of the new up trend

Good luck and best wishes

PS- I don’t short the market, so that is the reason that I’ve not discussed or shown any short trades – Long only is the safest way to go

THT

How to make money from the markets – Finding the Lows

Okay so we know markets grow over time and that differs per market – for example remember that GOLD chart I showed you? Well for the next 2 decades all it will do is move sideways, BUT during that time it will be tradeable, but it isn’t going to the moon (that will happen during the next cycle – so that will be the time to load up and just hold on)

Now I’m an aggressive trader – I want as much out of a move as possible, that sometimes works against me! so I’m going to calm it down a bit for these posts to make sure you know and see all options.

I’ll show you everything you need to know to make this work properly and profitably

I’m afraid you do need a couple of technical bits and bobs and you need a basic maths brain which we’ve ALL got.

Now in this post we’ll look at the lows only – not much else.

Remember our goal? 25%+ profit per year! from non-leveraged markets

Which is a pretty heft goal (The best bull run EVER was 1982-2000 in the SP500, that returned 1399% over 18 years, simple interest = 77%, compounded it was about 16% + divis.

We want to focus on the COMPOUNDED interest as that’s the most important as we want to compound every year and as mentioned above our target/goal is 25%

Now if you follow my techniques – there is no doubt you WILL be classed as or become a Professional Trader, you will be better than 99.9% of ALL professional fund managers out there! Why? Because you will be returning money FASTER than them – they can’t do this with a massive fund

The techniques I will show you can be used on ANY market, ANY time-frame and can be used for CFD’s, ETF’s, ETN’s, Funds, Shares, Stocks, Forex, Indexes, Spreadbetting etc – you get the picture!

Now this is crucial – you have to trade the market of your choice from the trading platform you use – you can’t look at say the cash SP500 Index and try to trade that chart on your spread betting providers platform, there’ll be differences in price etc so say you wanted to trade the SP500 Index, you HAVE to get the chart and data from the spread betting providers platform and base your trading decisions from that.

Now i only tell you that because I obtain all my data from an independent 3rd party and export that data into my preferred trading chart software provider – i then have to go to the trouble of comparing charts if I’m using a spread bet etc as the spread bet providers markets won’t be exactly priced as per market data!

Hope that makes sense.

If all you do is trade pure markets then you won’t have the issue above.

So HOW do we find the lows?

  1. Have a system for finding LOWs
  2. Let the market tell you a potential low is in

Remember to just keep it as simple as possible, as soon as you start adding conditions to a method it becomes very messy and you will for certain get false readings and before you know it you’ll be stalling to pull the trigger – the only way we make money in this game is by being right and only once we’ve taken a position.

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You can see that sometimes there’s more than a year between trading opportunities, which is why you have to monitor multiple markets – you want at least 5-8 opportunities a year – markets pull back like this ALL the time, so you are bound to find opportunities every month of the year, especially if you monitor 300+ markets – in my hotlist I have 380 markets I monitor all the time.

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for those interested, this pattern is basically WD Gann’s higher low/bottom pattern

Did you notice the one thing about my preferred Low system?

The BEST opportunities followed the “Waterfall” crashes/corrections – Plunge then 1,2,3 and In

Now you can see what to look for at lows, we know that the best opportunities follow the really sharp fast plunges in price – this is precisely the points that people are very scared about entering around! But they give the best opportunities.

You could just use the Indicator too!

Next post looks at how to enter and protect the position, along with possible price targets and most importantly HOW to make those 25%+ annual returns

PS – anyone play FOREX markets?

This one had 1600 pips written on it!

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Just for those that aren’t clear or traders – the “RISK” on this position would have been 202 pips, to make 1600 pips = 8 times risk potential, in English that means if you’d have risked £2.47 a pip = £498.94 total risk to make £3,952 – If 2300 pips is met then that’s a 11 times risk return or £5,681 – in 1 year.

If that £498.94 = 3% of your trading account then in 1 year you just made 24%

you caught the bottom (beware people say it can’t be done!), you just made decent double digit returns (remember people say it can’t be done!) and ALL from a stupidly simple chart pattern

Now think – this would not have been your only trade of 2017! You’d of most likely taken a few more different trades, which more than likely produced similar % returns!

Can you see how it’s possible to make high end double digit returns from the markets when you do things PROPERLY