Wrong data wrong results

In the previous century, if you wanted to be an independent market player you either worked yourself up on the floor of an exchange or had a professional trader as a mentor. Then market participation got expanded towards the internet. You still had to spend thousands of dollars for live trading courses, books and videos to acquire some fundamental knowledge. Today the whole body of trading educational materials is vast. Education is readily available, but one thing has changed. New traders aren’t willing to spend the money for a solid education. It is believed that all data is available for free on the internet. Trading is a very visual art form requiring charts. This makes YouTube the main information data provider for self educators. Here however, principle based data gets lost! We are not referring to the quality of date. We want to point out wrong data wrong results.

The false lure

Algorithms on YouTube for their sidebar selections aren’t programmed on the basis of clicks. Meaning, once You search for a specific topic, you do not get rated references of other related products offered in the sidebar. YouTube has complex algorithms that are based only on one goal: maximizing the customers view time. You watch a dog video you simply get more dog videos offered. This in the hopes you are not changing platforms but rather continue watching for extended time videos on YouTube. The result is that you might seek information on a specific analysis technique and try to learn if this approach is useful or not. But you end up becoming a fanatic about your specific choice of interest since all you get offered is an endless array of the same content. The mere volume of the same content feels like a confirmation that you have found the holy grail.

Silver, Weekly Chart: Wrong Data Wrong Results

Silver in US Dollar, weekly chart as of May 18th, 2020

The weekly chart above shows the last trade we executed on silver. The entry setup was posted ahead of time in our weekly chartbook. (Entry 5/1/20 at US$14.73, Financing target 5/7/2020 at US$15.25, First target 5/11/2020 at US$15.60, Final target 5/18/2020 at US$17.25)

All entries and exits were posted live in our free telegram channel. We used our quad exit strategy. The final target produced a return of 17.11% in less than three weeks time.

When self educating, it is helpful to model people who provide simple but precise data. Core principles of market behavior have not changed throughout time. Consequently release date of a book or technique is of no influence to its value. If anything, older materials can be more often principle based.

Most educators try to brand their teachings by renaming standard patterns to their own classifications which does nothing else but confuse and delude. Trading is already an art form meaning chart interpretation is tricky and not precise. As such precision in the rudimentary principles and basic commonalities is essential. Only then you can expand from there to create true edges. We encourage to read core materials even if these books do not come cheap. Here are our Top 5 books for beginners:

  • Mark Douglas – Trading In The Zone

  • Edwin Lefèvre – Reminiscences of a Stock Operator

  • Van Tharp – Peak Performance Course for Traders & Investors

  • Jack Schwager – Market Wizards: Interviews with Top Traders

  • Ari Kiev – Mastering Trading Stress

We also invite all new traders to ask questions in our free Telegram channel. Without clarity on what makes markets move, a new market participant finds him or herself in a house without any solid foundation and as such quickly under a collapsing roof.

Silver, Monthly Chart: Range Versus Direction

Silver in US Dollar, monthly chart as of May 18th, 2020

The monthly chart above shows how silver prices have faster than usual cut through its typical sideways range. (US$13.50 to US$18.75). This allows for speculation that a range break to the upside has a higher probability than the usual approach of the US$18.75 resistance zone. “V” shaped recoveries have a high likelihood to temporarily trade sideways and advance in their direction after a brief dip.

Range versus direction

This is one of the absolute core questions rarely answered. Seeing clearly if a market is ranging or in a trend seems an easy task but eludes most. It determines more than 70% of ones trading rules. Anticipating range breaks or trend reversals determines if indicators or oscillators are to be used. It is also the decisive factor which exits and entries are valid to be executed. One rarely finds this addressed in modern YouTube videos. Principle based answers to this core question are an essential asset for the astute market participant.

Silver, Daily Chart: Wrong Data Wrong Results – Keep it simple

Silver in US Dollar, daily chart as of May 18th, 2020

The daily chart above shows an entry opportunity coming up to add to larger time frame positions. With a directional move in play and three legs up so far, a retracement here is a possibility. This would allow for an entry for a final 4th blow off leg.

As of right now we find long term ownership of silver and gold to be the most valuable asset of wealth preservation.

This does not require in depth knowledge of advanced low time frame trading principles. A top down approach in time frame is essential.

One of the main problems with trading is the fact, that it is counter intuitive.

It isn’t technical analysis that is the core of financial success. It is psychology and money management. New market participants are lured by holy grail offers, mathematical solutions to beat the game, and an endless array of false promises of all sorts. The typical route of a new trader is underestimating the time necessary to find an edge in the markets. He embarks on a multiyear focus on creating a good entry strategy. The logic behind is simply that entries come first. Truth of the matter is that it is exits that determine profitability much more. And as pointed out, psychology and money management supersede that by far. In the light of this, a business plan is the basic foundation of a good starting point. It is in question if the charismatic YouTube speaker achieved the high subscriber rate by true content value or just good marketing.

Wrong data wrong results

The less educated crowd of new market participants has always been lining the pockets of the professionals. The learning curve has been always a steep and costly one in this specific profession. Easy access with the simple push of a button on a computer was a lure at the turn of the century. It allowed access to the money of the masses. There to be quite a difference between a lure and pure manipulation.

In today’s world it isn’t even talked about anymore that trading is a profession. Consequently requiring in depth knowledge, time and education. Millennial’s are burdened with an expectation to be millionaires before the age of 25. Operating systems have switched from alphabetic searching to manipulated swiping on screens. The underlying intent, subconscious branding and sales. Algorithms reroute our choices. You still falsely belief to have a library at your feet.

At Midas Touch Consulting we try to demystify non principle based wealth preservation offers. We try to educate and support each individual. This especially at times of rapid change, where one is easily overwhelmed with the magnitude of choices to be made on a daily basis. We advise on short and long term options of rule based market participation. We belief that everybody has the right to a less cumbersome future. A creation of family and retirement safety and abundance.

Creation and protection of wealth, in an in principle abundant universe, seems to us a fundamental right.

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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.

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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.

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