A simple exercise to make money

May 15, 2020

 

Ask yourself the following question. What are my top five trading/investment rules. Write them down in detail and review them. Seems like a simple question but if there is any struggle in response, it is of utmost essence to clarify. It is impossible to produce consistent results over a larger sample size without a clear measuring tool. It is those rules that need to be principle based, adhered to, stacked in the right order and the list goes on. The devil is in the details, which is especially true for trading. Imagine a boat. Even a small leak will eventually catch up with you if you don’t take care of it. It can actually sink the whole boat. Many rules are necessary but certainly the top five are essential. It is a simple exercise to make money. Do not postpone this exercise.

 

Silver, Daily Chart: Just As Planned

 

Silver in US Dollar, daily chart as of May 14th, 2020

 

In our Silver chart book from May 1st 2020 we anticipated a long entry in Silver. Shortly after the publication all entry criteria were met and we posted an entry in real time in our free telegram channel. Since then we have reached the first two exits of our quad exit strategy. The quad strategy being one of our first five rules that we adhere to religiously. This way of approaching exits does not only allow for minimizing risk and maximizing profits but most of all allows through its variability of choices in target exits for an ease of execution. A much needed psychological element of successful trading.

 

Silver, Daily Chart: A Simple Exercise To Make Money, Avoid Rule Conflicts

 

Silver in US Dollar, daily chart as of May 14th, 2020 b

 

If you look at the chart above you will identify the recent reversal to be a “V” shaped recovery. This being statistically a very strong bottoming pattern. While our rules typically state that short trades are only valid after a sideways period, in the case of a “V” shaped pattern we do not short at all since this is from a probability perspective a high risk trade.

 

Most traders find themselves in situations where they violate their own rules and blame themselves for a lack of discipline. The underlying truth though is that the refinement of their rules and sub rules isn’t detailed enough. It takes them already very long to extract a true edge and once found there is an itchy trigger finger. Unfortunately, this causes system development to be abandoned way too early while execution suffers by the lack of degree of sub rules. Many rules might be conflicting and lacking a clear hierarchy. The devil is in the details, but once these kinks have been worked out execution will be a lot easier. Another reason for rule violation might be psychological in nature like the acceptance of risk. In that case, trade smaller and again this just points towards the lack of rules in the area of money management and position sizing.

 

Silver, Weekly Chart: Time Relativity Errors

 

Silver in US Dollar, weekly chart as of May 14th, 2020

 

One area of rules where trading losses often occur as well, is a misuse of time frames. Time frame relativity errors can be very costly. A simple exercise to make money, is not to loose any.

 

At this point in time we are extremely bullish on silver. We pointed out various reasons for this in our last silver chart book publication. It is still extremely important when and on what time frame to engage in the silver market. While the monthly and daily chart provides ample opportunities, the weekly chart (see above) is at a high risk zone right now.

 

We had a great bullish bounce, but are from a weekly perspective entering the middle of a sideways range which in addition is a strong resistance zone. This is from a trade entry risk perspective not a place where you want to initiate a trade.

 

A simple exercise to make money
 

It is only fair for us to share our number one rule with you. We have, what we call, the 80/20 rule. This means 80% of our decision making process is rule based trading versus 20% being discretionary.

 

The market is a living entity, far too complex to be tried to be compressed into an exclusively left brain rule based system. Nevertheless it requires a minimum of 80% rules based trading to be strongly guided. This allows for the creative discretionary decision making side to make trading decisions as well. These approximate proportions can lead to truly outstanding performance. 

 

One way to assure such performance, is to allow the hierarchy of the top five rules to change throughout ones trading career – even new rules replacing old ones. The general guideline here is, that mastery is only achieved if the process feels easy. In case there is some friction it is time to analyze and find the culprit. Problems need to be solved before continuing to execute trades.

 

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All published information represents the opinion and analysis of Mr Korbinian Koller & his partners, based on data available to him, at the time of writing. Mr. Koller’s opinions are his own and are not a recommendation or an offer to buy or sell securities. Mr. Koller is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations. As trading and investing in any financial markets may involve serious risk of loss, Mr. Koller recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications.

 

 

 

Although a qualified and experienced stock market analyst, Korbinian Koller is not a Registered Securities Advisor. Therefore Mr. Koller’s opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction. Past results are not necessarily indicative of future results. The passing on and reproduction of this report, analysis or information within the membership area is only legal with a written permission of the author.

 

 

Important Trading Risks and Earnings Disclaimers - Terms of Use

 

RISK DISCLAIMER: All forms of trading carry a high level of risk so you should only speculate with money you can afford to lose. You can lose more than your initial deposit and stake. Please ensure your chosen method matches your investment objectives, familiarize yourself with the risks involved and if necessary seek independent advice.

 

 

U.S. Government Required Disclaimer - Commodity Futures Trading Commission. Trading financial instruments of any kind including options, futures and securities have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the options, futures and stock markets. Don't trade with money you can't afford to lose.

 

NFA and CTFC Required Disclaimers: Trading in the Foreign Exchange market is a challenging opportunity where above average returns are available for educated and experienced investors who are willing to take above average risk. However, before deciding to participate in Foreign Exchange (FX) trading, you should carefully consider your investment objectives, level of experience and risk appetite. Do not invest money you cannot afford to lose.

 

EARNINGS DISCLAIMER: EVERY EFFORT HAS BEEN MADE TO ACCURATELY REPRESENT THIS PRODUCT AND ITS POTENTIAL. THERE IS NO GUARANTEE THAT YOU WILL EARN ANY MONEY USING THE TECHNIQUES, IDEAS OR PRODUCTS PRESENTED. EXAMPLES PRESENTED ARE NOT TO BE INTERPRETED AS A PROMISE OR GUARANTEE OF EARNINGS.

 

CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAN ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

 

 

All information presented or any product purchased from this website is for educational and research purposes only and is not intended to provide financial advice. Any statement about profits or income, expressed or implied, does not represent a guarantee. This presentation is neither a solicitation nor an offer to Buy/Sell options, futures stocks or securities. No representation is being made that any information you receive will or is likely to achieve profits or losses similar to those discussed on this website. The past performance of any trading system or methodology is not necessarily indicative of future results. Please use common sense. Get the advice of a competent financial advisor before investing your money in any financial instrument.

 

Terms of Use: Your use of this educational website indicates your acceptance of these disclaimers. In addition, you agree to hold harmless the publisher and instructors personally and collectively for any losses of capital, if any, that may result from the use of the information. In other words, you must make your own decisions, be responsible for your own decisions and trade at your own risk.

 

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