Category: Nathan Bear

Too many traders avoid buying options for one simple reason – time decay.

Every second that passes where the trade isn’t working in your favor creates anxiety—because as you know—if it stays out-the-money, those options will expire worthlessly.

I believe for some, the difficulty lies in that they’re not considering the time element in their decision-making process… A BIG MISTAKE.

After all, when you’re trading stocks, you’re primarily focused on price action and volume.

But believe it or not, making the decision on whether you should be buying weekly options, or later-dated contracts is not as trivial as you may think.

Today I’m going to teach you how to connect the dots.

More specifically, how to pinpoint the right options contracts to trade so that you can minimize risk while maximizing your potential returns.

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Millionaire Trader Reveals Top Trade Idea Each Week

RagingBull.com CEO, Jeff Bishop, shares his top pick for the week each Monday, straight to your inbox.

“My strategy aims to help you pull one winner out of the market each week, regardless of market conditions!” – Jeff Bishop

Click Here!

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Basic time frame selection

No matter how you trade, time frame selection tends to come down to a few different types – long-term, multi-week, multi-day, intraday, and scalping.

For the majority of us, the long-term trades come off of the weekly and even monthly charts. Multi-week trades tend to come off the daily charts. Multi-day trades look at some hourly or multiple hour charts. Intraday time frames look at fractions of an hour. Scalping looks at something 5-minutes or under.

Picking the correct option expiration starts with the time-frame you set up the trade. To give you an extreme example, you don’t want to select options that expire at the end of the week when the trade could take a month to play out. Nor would you want to choose options that expire in 90 days for an intraday scalp. My goal is to find a balance between the two.

Pick the expiration 2x-3x longer than you expect the trade to take

This rule of thumb works really well when selecting the correct option expiration. If I think the trade could take a day to play out, I want to take the weekly options for either this week or next week, depending on when I initiate the trade. With scalps, I’d choose weekly options that expire on Friday.

When you get to higher time frame swings, give yourself more latitude rather than less. If you think the trade could take two weeks to play out and you’re stuck between the options that expire in four weeks or six weeks…go with the six. You may give up some profits on a few trades. But you’ll be happy when that one trade takes a bit longer than anticipated to play out.

Do you know how long your trades take?

All of this assumes you know how long your trades run. In fact, most traders don’t really have a notion of how long they should expect.

I learned two things over the years that help me out. First is my LottoX indicator. This helps me identify places where time is running out, and an explosive move should happen soon.

Second, and this is more important for you, was my trade journal. I used my trade log to tell me how long my average trade took. This was before I developed my timing indicators. It’s a cheap, easy way to determine how long your trades should take. If you’re working a completely new strategy, then do some simulated trades or look back through some charts to get an idea of the typical length.

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THE WINNING STRATEGY THAT WALL STREET HAS BEEN HIDING FROM EVERYONE…

FULL DETAILS HERE

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Expiration goes hand in hand with strike price 

Your expiration is only one part of the equation. Strike price plays an equally important role. The deeper in-the-money the strike, the more expensive the option, but the less you lose to time decay.

I prefer options that are a strike or two in-the-money. That gives me enough movement for my option without having to worry as much about time decay. I pair that with the expiration that provides the trade with just enough time to play out, and I’ve got a winning combination.

Source: Weeklymoneymultiplier.com | Original Link

Sometimes you get a gut feeling that you can’t explain. It hits you in the pit of your stomach, but you don’t know where it came from.

That happened to me Friday.

Check out my first trading from that morning:

Before my coffee cooled, my trade account heated up!

Then it hit me. A few hours later… I closed out most of my portfolio. 

I could be wrong and it may be nothing…

But, I’ve learned to trust my well-honed instincts.

And my instincts told me it’s time to lighten up.

Only time will tell if that was the right decision.

However, there are a few stocks that I’m targeting for potential trades come Monday…

You can find them right below…

3 Trades For A Volatile Market

Tilray (TLRY)

While I traded Canopy Growth (CGC) a few times last week, I never got a huge winner. But, as I started watching a similar stock  – Tilray – I realized it has a lot of long-term potential.

Let’s take a look at the 130-minute chart to start.

TLRY 130-minute Chart

I love the look of this stock. It almost fits right into my TPS setup. As a quick review, that means it contains three key elements:

Trend – While the stock had taken a larger decline last year, it pushed hard off the base it formed. That created a nice uptrend.

Pattern – Friday’s down move came close to breaking the pattern. However, I still like this consolidation flag.

Squeeze – So far, I haven’t seen the squeeze on the daily chart. However, there’s a nice one forming on the 130-minute chart. This occurs when the Bollinger Bands move inside the Keltner Channel. You can see it from the red dots in the bottom indicator.

Here’s the problem. Friday’s market action broke the chart pattern. The triangle formation broke with candle closes below the trendline.

However, I still think there’s a play. Let’s back out to the daily chart.

TLRY Daily Chart

The daily chart still has a pattern and trend. However, I need the squeeze to form before I want to hop on board.

So, this is one to keep an eye on. Once the Bollinger Bands start trading inside the Keltner Channel, then I’ll be looking at a potential entry.

What I do like about this stock is its independence. These marijuana stocks tend to trade on their own rather than with the broader market. That gives me the protection I want for a potential downturn.

Twilio (TWLO)

Twilio is a stock that I’m cautiously optimistic about. You can again find my classic TPS setup here as well… and this one looks primed to go.

TWLO 130-Minute Chart

Although this stock has run hard, it’s got a great look to it. There’s a nice uptrend, clean pattern, and a squeeze with momentum turning upwards.

However, there’s a catch with this one. Earnings come up on February 5th. I don’t like to necessarily trade through earnings. Given this is a 130-minute chart, there is a good chance it plays out before earnings.

That’s the trade-off here. It all comes down to timing.

20 Yr+ Bonds ETF (TLT)

This play is a great edition to protect against volatility. Bonds normally trade opposite of stocks. Investors like to park money in treasuries as a safety trade. So when stocks drop, bonds tend to rise. When stocks rise, bonds tend to drop.

Now, let’s look at the weekly chart for bonds here.

TLT Weekly Chart

Anything look familiar here? This is my TPS setup but on a weekly chart. That’s what I love about this system. It works on any time-frame.

Because this is a weekly chart, it can take months to play out. However, it fits within a bigger macroeconomic picture and acts as a great hedge against market fallout.

My only concern here is that the trade may have left the station. Last week’s market action may have been the breakout move. Right now, it’s not at a spot where I want to enter the trade necessarily. But, if I get a pullback to the 8-period or 21-period exponential moving average, then you can bet I’ll be sizing this up.

Want Even More Trades

Last week turned out to be a busy one for me. I found lots of great trades every day. Starting fresh this week, I see a lot of potential for even more.

So how do I find these people trades – TPS setups.

In my upcoming webinar, I talk about how I created my TPS system that turned my $38,000 account into over $2,000,000 in just two years, as well as finding these trades every day.

You can register for my free training event by clicking here.

Nothing is more frustrating than a single trade destroying weeks, if not months of work.

It’s a painful lesson I learned the hard way on multiple occasions.

During that stretch, I noticed I never stepped back to examine my trades as a whole.

I discovered periods where I had way too many bullish or bearish bets on in the market. My portfolio wasn’t balanced.

How do you maintain a balanced portfolio when you don’t want to give up on your existing positions?

In one word – Hedging.

For example, If you are long Google, you could short the Nasdaq 100 ETF.

You would do this if you believed that Google was set to outperform the broader market.

There are different ways to hedge your positions from basic strategies to complex ones.

The key is using one that works with your experience and style.

Today, we’re going to discuss various hedging techniques. And how you can start implementing them to protect your portfolio against any adverse reaction.

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Introducing the brand new Weekly Money Multiplier… starring Nathan Bear

“I need to let you know I listened to your advice and focused only with Nate Bear setups and studied his material with my under 1K account. The month of November (2019) I was green $425 or 17% with 7 winners and 2 losers. This was my first green month this year.” ~ Dan

JOIN NOW

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The Unprofitable Trader

Problem – I only know how to buy puts and calls

Newer traders probably haven’t thought much about hedging their positions. They’re more concerned with trying to come up with a good strategy and hitting consistent wins.

By ignoring your bias, you expose yourself to excess risk. I can think of several times when I would keep adding trade after trade on the long side. Then a day like Friday would come around where the market nosedives and all my positions turn against me.

The trick is to balance your trading risk and market risk. If you have a good idea, stick with it. Just know that it might not always work out.

Solution – Use market ETFs to offset your stock positions

My favorite solution for hedging – use market ETF options. I usually have a long-bias in my TPS trading strategy. To offset that bias, I will buy puts on major market ETFs like the SPY, QQQ, IWM, or DIA. This goes directly to the example I provided earlier. If I like Google’s potential, I reduce my exposure to the downside by buying put contracts on the QQQ.

The Breakeven Trader

Problem – I want to optimize my hedges

Sometimes I find myself in trades on similar stocks without even realizing it. If I play too many stocks in the same category, I get sector-specific risk. That means if I hold a bunch of tech stocks that all sell-off at once, using the S&P 500 ETF as a hedge won’t be very effective.

Solution – Use sector-specific ETFs

When I find myself too heavily loaded with one particular market area, I’ll look to offset the positions with the ETF for the sector. For example, if I have a trade in Biogen and Abbot Labs, I can pair these trades with a healthcare ETF to reduce my exposure. This reduces my sector risk and allows the trades to work on their own merits.

However, if you want exposure to the sector, then it’s best to cut down the number of trades in a similar category. Quite often, you’ll see the same setup in related stocks. When this happens, try to pick the best of the bunch.

The Profitable Trader

Problem – I don’t want to worry about adjusting my hedges all the time

Not every trader likes to spend time in front of the computer. I know plenty of swing traders that set their orders at the beginning of the week and then walk away.

The problem they run into is they don’t know which will fill and which won’t as the week goes on. They can very quickly find themselves with too many bullish bets or bearish bets.

Solution – Try market neutral strategies like iron condors

Strategies like short iron condors are great low maintenance trades. Once you put these on, you just check on them periodically for adjustments. These trades involve selling a call and put credit spread on a stock.

With these trades, you want to try to collect 1/3rd the distance of the spreads. For example, if you did an iron condor on a stock with a put credit spread at the $100/$101 strikes and a call credit spread at the $110/$111 strikes, you should try to collect $0.33 for the trade.

Ideally, you want to put these trades on when implied volatility is high and about 45-60 days out from expiration. With stocks, I try to avoid taking trades that go through any earnings announcements.

Putting It All Together

I won’t lie to you and say it’s easy to learn how to hedge your positions effectively. It takes time and practice. That’s why a good trade journal is critical. Your journal tells you what works and what doesn’t.

It took me years of practice before I finally learned how to turn a profit consistently. Journaling was a huge part of how I turned it around.

In my upcoming webinar, I talk about how I moved from an unprofitable trader to finally taking my $38,000 account and turning it into over $2,000,000 in just two years.

You can register for my free training event by clicking here.

Source: Weeklymoneymultiplier.com | Original Link

In trading, timing is everything. Having the best idea at the wrong time is the same thing as losing.

So how did I make millions with my TPS system…the one that perfectly timed this trade in YETI?

What is the secret sauce that my Weekly Money Multiplier Members know?

Quite simply – The Squeeze.

The squeeze was one of the most significant discoveries of my career. It turned me from a breakeven trader into a consistently profitable one.

It identifies when a stock is building up energy through price compression. As the trading range narrows, the closer the stock gets to an explosive move.

Pairing this with options leverages my capital and increases my earnings potential. It’s the very key that helped me turn $38,000 into over $2,000,000 in two years.

This is something you can implement in your trading. It’s much easier than you might think.

Comparing Bollinger Bands and Keltner Channels

Before we begin, I want to briefly give an overview. Both of these indicators measure some aspect of volatility. They just go about it differently. I’m giving you the setups that I use. However, feel free to play around with your own.

Bollinger Bands

I previously wrote about Bollinger Bands in my weekly newsletter. They’ve become a staple to my trading strategy.

In case you didn’t get a chance to read the article (or as a quick refresher), Bollinger Bands measure two standard deviations of price movement based on a rolling period (most traders use the last 20 periods). Two standard deviations tell you the mathematical range price is expected to land in given the number of bars back selected.

This means that based on the last 20 closes of whatever time frame you’re looking at, there’s a 95% probability price will land within the Bollinger Bands.

It’s important to remember that this is only a probability calculation. Also, it only looks at the close and not the entire candle. You’ll often see price slip through the Bollinger Bands only to bounce back.

Now, as the price range narrows, so do the Bollinger Bands. This tells me price is tightening up relative to its history. But, I need something more to give me a clear sense of timing. That’s where the Keltner Channels come in.

Keltner Channel

Keltner Channels work similar to Bollinger Bands, but with some key differences. First, the centerline is an exponential moving average. The lookback period is the same as the Bollinger Band using the last 20 bars.

It then figures out what’s known as the Average True Range (ATR). This looks back over the same number of periods and for each bar figures out the following:

Maximum amongst:

1. Current day High – Low
2. The absolute value of the current day high minus the previous close
3. The absolute value of the current day low minus the previous close

Lastly, it multiplies it by some value (normally 1.5), then adds and subtracts it to the EMA.

For example, if the 20-period EMA is $100, and the ATR for the same period is $10, then the Keltner Channel would be $100 +/- ($10 x 1.5) = $85-$115.

Unlike Bolinger Bands, the Keltner channel uses an exponential moving average and looks more at the actual trading range history.

So, you’re getting a look at Bollinger Bands that use statistical outputs and Keltner Channels that measure actual trading ranges.

How to Interpret the Squeeze

Now for the good stuff. The squeeze occurs when the upper and lower Bollinger Bands trade inside the Keltner Channel. It would look something like this.

What we’re looking at is when statistical outputs say that the trading range is inside what is effectively the actual trading range. It’s like predicting the patriots to score two touchdowns every game when they’ve been consistently scoring 24.

We want to see price then ‘explode’ out of the trading range, where the Bollinger Bands expand outside of the Keltner Channel. This is what we call it when a squeeze ‘fires.’

Playing the Squeeze

The key I found with the squeeze is putting it together with other trading signals. For me, that includes a strong uptrend and a consolidation pattern – hence my TPS setup. I want to enter a trade where all three of these elements are present. Then, I wait for the squeeze to fire.

Most of the time I will play the long side of stocks. That means I look for trades near their highs that look ready to explode higher.

Here’s an example from Weekly Money Multiplier. My setup contained all three elements and a run into earnings.

The red dots at the bottom indicated that the Bollinger Bands were trading inside the Keltner Channel. This gave me confidence the trade would make an explosive move.

When the energy was finally released, it pushed out hard for a whopper of a profit.

Putting It All Together

The trick to becoming a successful trader is combining multiple signals that include timing, price levels, and chart trends. Once you learn these, you’ve got a winning ticket.

It took me a while to put the pieces together. Once I did, it wasn’t long before I turned my $38,000 account into over $2,000,000.

I explain how I accomplished this in my upcoming webinar. You get to learn how I went from losing money to trading for a living.

Click here to register.

Source: Weeklymoneymultiplier.com | Original Link

Every successful chartist I’ve ever come across has a favorite pattern they love to trade.

For me, it puts the ‘P’ in my TPS setup.

However, like a piece of abstract art, show two traders a chart, and they’re likely to tell you about two different patterns they see.

What can I say, charting is both an art and science.

For years I struggled with accepting that.

I wanted to be perfect in identifying chart patterns. That is until I realized something profound…

…Perfection was holding me back! 

You don’t need to be perfect at pattern recognition— just good enough.

All chart patterns boil down to three types: reversal, continuation, and consolidation.

That’s where my epiphany came in…

Describing Chart Patterns

Each of the three types of patterns works with some element of price and movement in the chart. The easiest way to think of them is like your middle school physics class.

Imagine I hold a rubber ball in my hand. If I throw that ball in the air, at some point, it slows down. Then it stops and drops. Or, imagine that I bounce it off the ground. It ricochets and comes back towards my hand. Essentially, that’s what happens with reversal patterns.

You describe reversal patterns the same way you would describe throwing that ball. Most reversal bottoms are marked by violent, ‘V’ shaped turns that require a lot of force. Conversely, most tops arc on softer energy before reversing.

The ball analogy is meant to help you visualize how to describe the actions of the stock movement (not to be an exact analogy). That’s how we fit chart patterns into the three categories.

So let’s start with reversal patterns.

Reversal Patterns

Most reversal patterns contain two major elements:

1. Support or resistance level
2. Candlestick pattern/formation

A common reversal pattern is an engulfing candle, and one I’ll use for demonstration purposes. This occurs when one candle’s body encompasses the whole of the previous candle.

This is what it would look like for a reversal off the bottom.

The green candle engulfs the previous candle. This is a signal that price wants to reverse. However, this doesn’t make sense at any arbitrary point in the chart. Let’s say this particular bullish reversal occurred near the highs. Does that make sense?

Not really. Why would a stock need to reverse when it’s near the highs? These patterns only make sense in context. So, this pattern should only work when reversing a downtrend.

This is what the pattern would look like at a top for a reversal.

Looks like the same image with the colors flipped and the image upside down.

Now, here’s a slight variation. This is still a bullish engulfing pattern.

It looks a lot different than the other two. But, let’s describe what’s really going on here.

1. The primary candle’s body ‘engulfs’ the previous candle’s body.
2. It reverses a trend
3. The pattern only makes sense in context.

That’s really it. Everything else is just noise. Don’t make things more complicated than they already are.

Continuation Patterns

Think of continuation patterns like you were throwing the ball to someone who was standing at the top of the stairs. When you throw the ball, it goes over their head a little bit. Then they catch it and get ready to throw it again.

Basically, that’s a continuation pattern. These patterns look for areas of ‘rest’ within a chart. They take a trend that already exists and give it a chance to catch a breather.

I use continuation patterns all the time in my TPS setups. Let me give you an example.

Here’s a trade I recently took in AMD.

AMD 130-Minute Chart

I want you to focus on the two orange lines forming a ‘triangle.’ This is a common chart pattern for consolidation. In fact, most consolidation patterns work off some sideways action and a compression in the trading range.

However, the context here is important. The continuation pattern only works if it’s continuing a trend. If I try to play this in a choppy chart, it’s bound to fail. That’s because, like a bullish reversal near the highs, it doesn’t make sense.

Consolidation Patterns

I won’t spend too much time on consolidation patterns as they don’t have a lot of definition around them, and are mainly setups to other price action. But, think of them as a broad category for stocks that trade in a range.

Consolidation patterns mean that the stock has stopped moving in a trend and remains in a range. This range can be expanding or compressing.

Continuation patterns can be consolidation patterns. If you look at the AMD triangle pattern, it’s certainly a consolidation pattern. However, not all consolidation patterns are continuation patterns.

Traders I know that work with consolidation patterns tend to play ranges. They work with stocks that bounce back and forth. Consolidation patterns themselves are a bit easier to understand in the right context. But, when you find one in a choppy chart, it’s hard to say whether it’s changing or continuing a trend.

My advice, unless you’re already good with these, stick to the other two.

Incorporate Patterns Into Your Strategy

Earlier, I referred to my TPS setup. You probably noticed that pattern makes up only one aspect, the other two being a trend and squeeze in price.

I created this system after analyzing charts and working through my journal for the better part of a decade.

In the end, I turned $38,000 into over $2,000,000 in two years. You can learn about the steps I went through in a recent training session. I explain how I went from an unprofitable trader to a RagingBull guru.

Click here to register.

Source: Weeklymoneymultiplier.com | Original Link

Some weeks are better than others. I’ve had a few award me double-digit returns. However, it’s rare that I get close to a 1000% return on a trade.

This week happened to mark one of those moments. I executed a beautiful trade with Weekly Money Multiplier in AutoZone that came up just shy of a 10 bagger.

This is one of my biggest trades in 2020!

Let me tell you – it isn’t easy to find massive winners like this. But I have a few stocks on my radar that I think could provide some explosive profits in the coming week.

Spend some time with the family on Monday see you can get to your charts early on Tuesday morning and kick off this trading week.

Lamb & Weston Holdings (LW)

Maybe you are old enough to remember Saved By The Bell middle school episode where Zach and the gang lost a lot of money on potatoes. They were missing a TPS set up on a potato supplier like Lamb & Weston.

A friend of mine recently brought this chart to my attention, and I really love this setup. This fits a classic TPS strategy with a fantastic risk-reward.

LW 130-Minute Chart

Here’s what I see when I analyze this chart for my TPS strategy:

• Trend – I see a clear trend that is preceded by an explosive move higher in the stock off the back of its recent earnings.
• Pattern – The upper trendline connects the highs of the candles in a descending fashion. Underneath, the low points are connected in a slightly ascending trend. This creates a triangle consolidation pattern.
• Squeeze – At the bottom, there is a series of red and green dots. The red dots indicate a squeeze when the Bollinger Bands move inside the Keltner Channel indicator. This is where I want to enter. When it turns green, the energy from the consolidation is released.

Here’s what I especially like about this trade – normally I stop out when the squeeze releases and the pattern breaks.

Because price is so close to the lower trendline, the amount it could fall relative to a breakout above the pattern is tiny. That means it gives minimal downside risk with a lot of upside potential.

With implied volatility extremely low across the board, I’d look to play this trade with call options. Since I’m using the 130-minute chart, I’d go out about two weeks with the expiration period.

Twillio (TWLO)

This trade fits more with Jeff Bishop’s money pattern than my TPS setup. However, I think the chart is worth discussing for a trade idea this week.

Twilio ran higher for nine days straight before finally having one down day. However, that apparently was enough to stop this relentless uptrend dead in its tracks.

Here’s what I’m talking about on the daily chart.

TWLO Daily Chart

The previous lows from where the stock found support on its drop now act as resistance. Before that, the same level acted as support on the way up. So, when the stock ran into this level, it reversed.

Now, let’s break it down to the hourly timeframe.

TWLO Hourly Chart

I highlighted the recent moving average crossover in yellow. Jeff calls this the ‘money pattern’. It occurs when the 13-period simple moving average crosses over or under the 30-period moving average on the hourly chart. Here it crosses below, while at key support.

So, this setup tells me the stock wants to trade lower. However, I want to be cautious in such a bullish market. I can either play this trade with long put options or selling a call credit spread.

If this stock closes above the previous highs, then it’s broken resistance and the trade is over.

Kinder Morgan (KMI)

This chart isn’t the cleanest TPS setup, but it has some potential. KMI’s 130-minute chart looks pretty decent here.

KMI 130-Minute Chart

Typically, I want a larger move than we saw recently to create a trend. You can see how the first move led to a consolidation and a squeeze that fired higher into the current pattern. However, I do like that the current squeeze is preceded by a squeeze that worked out to the long side.

Now, the red bars at the bottom indicate the momentum has shifted to the downside. So, I’d probably wait on this one before stepping in. I want to see things consolidate longer and shift direction. That would give me confidence the uptrend isn’t over.

Learn how I developed my TPS strategy

I get a lot of questions about how I created my TPS strategy. It wasn’t something I discovered overnight. It actually took 8 years.

In the end, I turned $38,000 into over $2,000,000 in two years. You can learn about the steps I went through in my upcoming webinar. I explain how I went from an unprofitable trader to a RagingBull guru.

Click here to register.

Nathan Bear: I’d made $1.3 million total over the last 12 months using a simple Weekly Money Multiplier strategy over and over again.

How Nathan Bear made $1.3 million over the last 12 months?

And I noticed something strange…. I didn’t feel much about it.

I never thought I’d say something like that.

Because years ago I was a struggling small business owner, worrying every day how I was going to keep my growing family above water and make sure the bills were paid.

When I started trading with just $37,000 in my account I would never have DREAMED it would turn into a million.

And, let me tell you, the FIRST million I made was probably one of the most exciting periods of my life.

But here’s the thing — this is now my FOURTH million. It’s become standard…normal…repetitive.

I no longer get those butterflies in my stomach when I see my account grow another million.

It’s just “business as usual.”

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— RECOMMENDED —

Introducing the brand new Weekly Money Multiplier… starring Nathan Bear

“I need to let you know I listened to your advice and focused only with Nate Bear setups and studied his material with my under 1K account. The month of November (2019) I was green $425 or 17% with 7 winners and 2 losers. This was my first green month this year.” ~ Dan

JOIN NOW

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Is that what you WANT to happen?

But, that’s what you WANT to happen.

This is what a consistent, profitable trading strategy is SUPPOSED to do.

It’s supposed to take the emotion out of trading.

It’s supposed to make trading mechanical and repetitive.

The results are supposed to be so predictable and scalable that you look at another $1 million in your account and go, “Well yeah — I was expecting that.”

Lastly — it makes trading BORING.

You shouldn’t be scared, or pumped full of adrenaline, or experiencing swinging emotions of excitement and dread when you trade.

You should be pulling money out of the market like your laptop is your own personal never-ending ATM machine — and YAWNING all the way to the bank.

Would you like to learn the exact same strategy?

Would you like to learn the exact same strategy I’ve been using day after day, month after month, year after year to create millions of dollars in profit.

If so,  you can click here RIGHT NOW to get access to the special FREE presentation I’ve put together for you.  (I’m going to lay it all on the table).

But hurry, this free “tell all” training starts soon and isn’t going to stay online for much longer. 

What you DO with the money can make your life exciting — but the process of getting it SHOULDN’T be an emotional roller coaster ride. 

If you’ve tried trading and you’re finding yourself hitting all sorts of highs and lows and you’re wondering if you’re ever going to figure this whole thing out and ACTUALLY get profitable…

Then please — click here now to learn a PROVEN strategy for consistent returns.

Each day, buyers and sellers go to battle.

If you get on the wrong side of the fight – you’re destined to lose money.

That’s why I make it a daily practice to study tick charts.

Not only does it show me where the buyers and sellers are…

But it also gives me a real-time picture of market health – an essential tool for day traders.

In fact, I applied it the other day for a quick scalp in the Russell.

I leveraged the Tick chart to time my entry and maximize my gains

However, to the naked eye, the tick chart can look like an abstract painting.

If you don’t know its nuances then you won’t be able to maximize its power.

That’s why I’ve outlined my best practices for implementing tick charts – which I’m going to share with you today.

Tick Chart Basics

Most people aren’t too familiar with this measure, so let me explain. The Tick chart tells me whether there is buying or selling at the New York Stock Exchange (NYSE).

There are approximately 2,800 stocks that trade on the NYSE. The Tick chart gives each stock an uptick, downtick, or nothing based on the last trade. When a stock trades higher than the previous order, it’s called an uptick. If the stock trades lower than the previous order, it’s called a downtick.

When you go to look up the Tick chart, you’ll generally find it under the symbol TICK. Depending on your platform, this may require a ‘/’ beforehand or a ‘$.’ You will need to discuss with your individual broker to determine the ones they use.

As I mentioned previously, the Tick chart measures upticks vs. downticks. When a stock trades at the same price as the last trade, it gets nothing. That’s why the chart rarely has a lot of extremes.

Now, for obvious reasons, the Tick chart is bound by the total number of stocks on the exchange. Combine that with normal stock flows, and you find that the Tick chart is mean-reverting. That means it always tends to come back to the center from extremes.

You can see what I mean in the chart below.

TICK Daily Chart

The highest the Tick chart ever got was 1667, and the lowest -1556. If you did an average, it would land somewhere near the middle. That’s why I use the chart to gauge market health on a relative basis.

Important Lines In The Chart

There are a few levels that I want you to take note of +/-600, +/-800, and +/-1000. These create the normal extreme levels for the Tick chart that you want to look at.

Now, here’s the trick to using them – you want to move in the opposite direction of the extremes. So, if the Tick chart hits -800, you want to go long equities. If it hits plus 800, you want to be short.

You’re probably thinking – why would I want to do the opposite?

Well, when you break it down to intraday time frames like the 5-minute through 15-minute charts, you’re looking to trade with the flows. So, when it hits extremes, it tends to move in the other direction. Ideally, you want to see it hit -800, reverse, and head higher. This corresponds typically with a bullish move in equities.

Here’s what it might look like intraday on a 5-minute chart.

TICK vs. SPY 5-Minute Chart

The TICK is the more transparent set of lines on the chart. First, you’ll notice the rectangle outline that shows the SPY candle making a massive dip. At the same time, the Tick chart dipped all the way down to -1,000. That’s a signal that it’s at least reversing for a quick scalp.

Next, you see how the Tick chart started hitting the -1,000 level again as the SPY began to bottom. When the Tick chart rallied, it went all the way back up to +600, which was coincidentally the top in this move.

You can test this out yourself. It’s really fascinating to see how it plays out time and again.

Understand Context

The Tick chart itself won’t make you a better trader. It must be used in conjunction with your typical strategy. All it does is improve your accuracy of entry timing. If you try to use it without your bread-and-butter setup, you’ll quickly drain your account.

Most importantly, you need a strategy that works with intraday trading. The Tick chart won’t do much for you for swing trades. It mainly works for short-term timeframes intraday… generally between 5-15 minutes. Once you go out further, it tells you something entirely different.

It took me several years to discover how to create my TPS strategy and incorporate these measures. You can learn all about it in my upcoming free webinar. I explain how I spent 8 years learning to trade, finally turning my $38,000 account into over $2,000,000 in the last two years.

Click here to register.

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