The real rule #1 to trading is that price dictates. There are three (and only three) components of trading. The first is Price. When considered alone, it is meaningless. It’s just one point on the y axis.
The second is Time. Time gives context to price. It helps to identify change. When price occurs over time, it can be plotted to a chart. Price over time reveals a very interesting phenomenon in the realm of speculative trading. Patterns emerge. But more on that later. This provides historical context from which to identify the intentions of the majority shareholders (those with the $ to move the price – accumulation).
The third and final component is volume. Volume shows the conviction (or lack thereof) of the shareholders regarding price over time. The combination of these three variables, when properly understood, is the ability to profit from what it predicts.
Patterns develop that can be identified, measured, and processed in retrospect to give rock-solid probabilities of what will happen the next time that pattern occurs (stock will go up or down to a specific magnitude within a specific number of days). We call this the predictability of price patterns. Price patterns are “people patterns.” When reading a chart it becomes clear as day where a seller, or groups of sellers are getting out. The distribution strength will be overcome by the accumulation strength, or those that accumulate the stock.
Humans act in some very common/predictable ways. ESPECIALLY when it comes to their money being at risk. Humans generally move away from those things that we are afraid will bring us pain, and gravitate to those things that provide gain, or pleasure. Many would-be traders get stuck somewhere in between and this most certainly results in lost opportunity. To prefer pain to gain is the cost and loss of opportunity. But thereal pain is just learning and keeping to a strategy, then having a mentor hand hold with you, each trade until your proficient.
If you miss the opportunity now, you always say you will buy it on the pull back. The difference between where the price was and where it is now is where the pain is. That’s where people recognize that the cost of avoiding pain is the loss of opportunity. Their loss. And that’s when you start saying things like “I knew I should have gotten in. I’ll wait for the pull back.” Opportunity lost.
“Education, practice and a commitment and discipline to a winning investment strategy are the key to winning in the market.”
Education, practice and a commitment and discipline to a winning investment strategy are the key to winning in the market. Jade Bronco education and coaching shows each of our contributing students what to look for in order to identify the current opportunity and place profitable trades every time. As a Jade Bronco student you will quickly be able to determine the direction of a stock (bearish or bullish) while identifying specific patterns in the price of the stock over time. Then just as quickly, you will learn to find support and resistance in the trend, along with price patterns that specifically predict the future price action of the stock.
There is only one price trigger for the Jade Bronco Method™. It is a breakout (big green candle or big red candle). The breakout can only occur after horizontal support or resistance are formed. The two most common set ups for breakouts are reversals and consolidations of the trend. It is important to remember that there are only three components to charts: Price, Time and Volume. 99% of all technical indicators (candlesticks, moving averages, stochastics, MACD, strength/weakness indicators, volatility, etc.) are constructed with only two of the three components on a chart: price and time. Both of which exist in the past.
These are known as “lagging indicators.” They lag by getting you in after the move (leaving money on the table), and keep you in until well after it turns down (and you sit and watch your profits diminish). In late and out late is no way to trade. Here is a challenge: find a technical indicator that includes, price, time, volume and vector. With a little training, the human eye can detect each of these components and reach a conclusion comprehensively. Then proceed to get quickly in to a trade exactly when the conviction of the crowd is obvious, and know that the momentum of the crowd will carry until it fails.
It is known as the first sign of weakness, which is anticipated, expected and then obvious for the exit. Price over time (going forward we’ll just call it price) is the basis of support and resistance, phenomena of price action, and leads to the perception of pattern opportunities that are acted upon through trade entries and exits. Time is money. We agree. But time is also a component of life. Traders will engage various time frames in order to get what they want.
You have likely heard of scalping. Scalpers trade micro time frames during the day but they exit all of their trades before the market closes. Swing traders play day over day momentum until that ends. It usually lasts 2-5 days. It takes into account all of the previously mentioned trading time styles and makes the best of each. Volume, or the number of shares sold for a given period of time, along with price and time, is the third dimension. Volume is the metric that gives magnitude to movement, and by definition.
By quickly recognizing the price pattern and direction of a stock, support and resistance and the direction and strength of the price, you are able to place those 80% and higher probability of maximum gain trades.
Step Three: Create Your T-Chart
This is a double sided chart that we use daily in the selection of our trades. Bears on the left and Bulls on the right. It will look something like this. Use the chart to write down the ticker symbol for each stock screened, along with its entry point in terms of price. It seems simple at first, but all Jade Bronco traders use a T-chart like this. It lines up with the options chain on your platform bear (Calls) on the left; bulls (Puts) on the right.
It helps you visualize which trades will be your best opportunities and direction to follow for your session that day. It also goes along with keeping a trading journal, something that all good traders keep current on.
Step Four: Earnings
Clear the stocks for earnings. A company’s earnings are its after-tax income, or profits, in a given quarter or fiscal year. Corporations are required to file quarterly reports. Since the report is held quiet until it is reported on a selected date, no one can predict the report’s outcome. Therefore, no one can predict how the price of a stock will change before, through earnings day, and after the company’s earnings report.
A company’s earnings announcement can have unexpected consequences on the price of the stock and can cause them to move outside of an expected pattern. By ensuring that your trade avoids the earnings date, you control the risk of a big random price move against your trade.
To Be Continued…
Join us next week for Part 3 of 7 Steps To Profitable Trading In The Market.
A highly successful twenty year career in trading and coaching individuals in the markets, is at the core of the Jade Bronco 7 steps to profitable trading in the market. This strategy has been tested over a ten year period of time, proven and the results are published daily. And at the heart of the Jade Bronco methodology is a twenty year vet of the markets, Brian Anderson. Yay!
Many Trading Markets
These days there are markets galore, from the stock market – equities and options trading – to Forex, to the multitude of products to the commodities market, and now digital currencies. These are called “instruments” of trading or investments. Choose a market and there are many ways to trade it. Most people are familiar with a “buy and hold” approach to investing. And you have heard that anyone can be brilliant in a market that is constantly in an upward trend.
Knowing the different types of trades in the market, when to enter and when to exit, and having a method or strategy for placing them can be the difference between a highly profitable portfolio year after year and quickly going broke. Markets, though, are a profitable place to make money, create wealth, work toward retirement or reach any number of personal goals. But investing in the market can also be a place of confusion and frustration for some.
Understanding Market Fluctuations
The market is very dynamic in that it offers so much opportunity to trade and it affords traders and investors alike, the up and down movement they can take advantage of every day. With this movement it is important to know that nothing is rare and that singular events are very common. Those who are profitable in the market realize that the market provides ample opportunity because of its fluctuations. It moves up and it moves down based on the behaviors of traders/investors.
Therefore, we are never at a want or hunger for opportunity in the market. Do hot be fooled! There are never more buyers than sellers in the market and vise versa. The market fluctuations boil down to exchange between accumulation, or those who have the ability to take advantage and accumulate, and distribution, or those who are engaged in selling off. And those traders and investors that have the ability to move a stock or sector know what they are doing, yet never publish what they know. If anything, they would prefer to misinform others in order to continue the practice of accumulation and distribution.
You hear about, or know someone who makes money in the market and there is a lot of money being made daily in the market. Someone has figured out how to make a lot of money in the market. The market is the land where fortunes are found, flaunted and fumbled, all at the same time. And in the middle of it all is our fear and lack of sound knowledge and a strategy for having great success all of the time. For example, options trading is one of the most consistently profitable trades in the market today.
So when you hear someone say “I’d never trade options. They’re just too risky,” we ask them, what if you knew you had a 90% probability and certainty that the trade will result in the win, just as you knew it would when you placed the trade? The answer is pretty obvious! If you knew that you had a 90% probability behind any of your choices in life, how different would your life be? Options are the most profitable trade in the market today, you just need a winning strategy that is easy to learn, easy to stick to, easy to repeat daily, and the discipline to stick to the strategy.
Having a successful methodology and being able to stick to that strategy and repeat it daily, are the keys to a profitable portfolio. Learning how to identify the best stocks with the highest probability for profit, knowing the best entrance and exit points and trading with confidence makes all the difference. In any given week there are over 4,700 optionable stocks in the market, from technology, banking and financial services, to health care and even utilities and real estate. Learning the right way to place a great options trade consistently, is always the key to profitability. The right approach to profitability requires a winning time tested strategy and some discipline in sticking to your strategy.
Ensuring Profitability In The Market
So, you have a good approach to trading. Now, how simple is it, and how effective can you be, in identifying actionable opportunities out of the thousands currently available, without a tested, proven and documented strategy? One of the reasons that people see the market as unapproachable is because of the variety and expansion of investment products. New trading instruments are being introduced into the market all of the time. Reits, (real estate investment trusts), ETP’s or exchanges traded products (ETF’s) Bonds, Gold, Commodities, even a digital asset like Bitcoin etc., are being added to the market. And it is intimidating.
If your trading screen looks like this, you’re losing money.
When it comes to ice cream, studies show that most people are less satisfied with more choices. In the capital markets you stand in front of a vast variety of investment instruments, and the question of where to invest, how to invest and when to strike has become a daunting proposition because all these products have been melted into one very diverse “market place.“ It’s intimidating and takes someone with experience in this “markets within a market” to navigate them successfully, confidently, decisively, with proven and published results.
We always say, “get a coach!: Here is someone with a history of high success and profitability in the market, who cares about your outcome as well as theirs. We have a problem with self and pundit proclaimed gurus in the market. They sell “noise,” and compete for your time, your attention and of course your money, while draining your energy, focus and commitment to your goals. Remember that casinos in Las Vegas are built on the backs of losers, not winners. Gurus want your money. Market Makers want their percentages and brokers want their commissions. And they publish the gainers and losers each day in order to make you feel like you are missing out on something. We call them fee facilitators with commission breath.
A trader’s profitability comes down to their individual knowledge, experience, strategy, and their ability to quickly place a safe, high probability trade only after having done their own analysis.
The Jade Bronco Method
With all of this said, the Jade Bronco methodology for trading provides you with an income replacement strategy that can even double your current returns across all of your current financial instruments. It’s proven, documented and the results are published daily. No matter what our student’s goals are, be they:
personal income and replacement,
a nice home,
better vacations, or to
learn a skill set that can be handed down and taught to their family members and friends,
the strategy is easily modeled and repeated and will set them apart from others in their financial lives. Regardless of where you are right now in your financial life, or how far along you are with your financial goals, your market knowledge or level of trading experience in the market, The Jade Bronco strategy for trading and investing provides you with 7 sequential and actionable steps, specifically design and tested over years of research and development to provide consistent high probability wins, increase your profitability and double your money.
These are 7 steps that will allow you to identify those “in the paint” (to use a basketball metaphor) trades with the highest probability outcomes, correctly time your entry and exit points, properly manage the allocation of your portfolio and win all the time. We make trading options easy and profitable.
Run your pre-built screener. A screener is an online tool that shows all of the information you need to select a stock to trade. Remember, there are over 4,700 optionable stocks in the market today. A good screener will take all of the guesswork out of which stock to trade. And for the average trader the stock screener will illustrate the conjunction where the high probability and high profitability on each stock meet.Author, Data Journalist and Information Designer David McCandless said in his TED talk,
“…by visualizing information, we turn it into a landscape that you can explore with your eyes, a sort of information map. And when you’re lost in information, an information map is kind of useful.”
A good stock screener does this. It scours the universe of tradables and brings back exact matches for further consideration. In an instant you will be looking at a very few, but the very best candidates for a profitable trade. Most importantly, screening takes all bias out of your trading. You now have a short list of the best potential trades, and are able to select “bullish or bearish” trades and move to the next step. Jade Bronco traders use a proprietary stock screener to narrow down specific trades that fit the methodology, ensuring that only those trades with the high probability for “max gain” are shortlisted.
To Be Continued…
Join us next week for Part 2 of 7 Steps To Profitable Trading In The Market.
“But you were always a good man of business, Jacob,” faltered Scrooge, who now began to apply himself.
“Business!” cried the Ghost, wringing its hands again. “Mankind was my business. The common welfare was my business; charity, mercy, forbearance, benevolence, were all my business. The dealings of my trade were but a drop of water in the comprehensive ocean of my business!” (Charles Dickens)
Capital Loss vs. Charitable Giving
“Never risk more than you care to lose” is common advice in this business. Such reasoning can be equally applied to an asset class unavailable for purchase on Wall Street. It is the one Jacob Marley emphatically endorses. Charitable goods are individual contributions to the common good. A few forms of charitable giving include helping a stranger, contributing time to a worthy cause, sharing expert insight, and giving away cash to those in need. As such, this investment class is a divestiture class of good gifts.
What is the difference between a capital loss and voluntary loss of capital to charity? I have heard it put this way: “Losses are losses, but gifts are losses with a silver lining.” Both losses have defined amounts, but only one is 100% certain, and guaranteed to fill your emotional cup, and that is the latter.
Choosing Your Charitable Organization
According to the Charities Aid Foundation, America is home to the world’s most generous private givers. Americans donate over $200 billion to charity each year–more than 1 percent of our GDP. This generosity is consistent among all types of investors because the percentage holds strong across all income levels, races, religions, ethnicities, and education levels. Here are the findings for 2020.
Judiciousness in distributing to a charity is as personal as risk tolerance. Damon Davis favors giving to the local Food Bank and is encouraging others this year just as he has in years past. David Johnson is a generous soul that is not afraid to discuss who qualifies for his giving. “I believe in giving to charitable organizations, and market makers don’t qualify.” Choosing a charitable organization for your “no strings attached” contribution, can be more daunting than picking a good cryptocurrency. NGO’s are serious business and a new realm of inquiry for many who are growing wealth at Jade Bronco.
Owning Charitable Companies
We have seen and experienced the wealth that grows under the practiced hand of the skillful trader and investor. Therefore, we can assert that one can learn how best to optimize personal good will and the ability to give skillfully.
What if you could do both? What if you could give to charity and own companies that give to charity. Well, you can. Charitable investment funds and annuities have been around since the early nineties. Many Analysts insist on seeing corporate charitable contributions above a certain threshold as a part of their criteria for getting a strong buy rating. You can do so too. Here is a link to a list of the most charitable for-profit companies.
Change For The Better
Frank Priest once confided, “money changes peoples’ DNA.” Implicit in that statement is the sentiment that greed can make you do the wrong thing. The reverse also holds true. If you give some of your money away, that can also change your DNA. Only this time, it will change you for the better. Generosity is the antivenom of greed. As such, it can be suggested as a possible cure for irrational investing.
Of the great men I know, money is no obstacle. Because of their generosity of spirit, money is not hoarded, but directed. They are wise enough to bring in the wealth, and wise enough to choose appropriate charities. There is much thought in both, especially at this time of the year.
During this current Covid-19 “business break” and a great deal of personal emotional loss over the last year, I have taken back control of my stock portfolio.
I have actively managed my accounts in the past and have some experience, however, I felt like I needed to step up my game. So, I got myself a mentor or coach to help me along the way.
Brian Anderson has helped me to hone my skills. “Bronco”, Brian is known for, has helped me with analyzing patterns and utilizing repeatable methods to actively grow my portfolio. My portfolio as a whole has grown by more than 25% over the past 7 months. I use techniques that I have learned from Jade Bronco to provide an ongoing income during troubled times.
I actively buy and hold stocks that I feel have or will perform well as well as using options to provide a regular stream of income. What does that mean? I have most of my portfolio in stocks that will grow with the market. I also actively look for opportunities and options that will generate a more immediate income.
I get asked from time to time if I day trade. I do not. I actively look and buy stocks and options using the Jade Bronco Method for a little over an hour a day.
I do not typically buy and sell the same stock on the same business day. I do not spend the day in-front of my computer. I get to spend time with my kids and do the things I enjoy (hiking, fishing, cooking, family).
I am not an not an expert at trading and the method helps me to formulate a plan on my trading. I use the Into The Close program to get trade ideas and value the group as a resource. Thank you Bronco!
For a first-hand look at Jade Bronco’s Into The Close coaching program and community, CLICK HERE.
Below is a Jade Bronco diagram I like to use regularly. It is based on real numbers and shows a historical timeline of the market, demonstrating the direction of the market from early in the last century to today. Just imagine how much your portfolio would have grown over just the past few decades, even during the market’s “consolidation” periods.
As I speak with friends, family and potential students about what we do as a coaching company, I see that many people like to compare trading in the market to going to Las Vegas and putting all your money on red at the closest craps table. And the one thing that everyone admits to me is that they just don’t have the knowledge and skill set to make money in the market.
The Skills You Need To Be A Successful Trader
Look, success as a trader (and I am talking about a high success rate), is a skill set and it requires the development of a certain kind of muscle memory, if you will. What if I told you that trading can be as simple as putting a round peg in a round hole? And what if I told you that there is even a “hack” to becoming a highly successful trader in the market?
Well, let me introduce you to Candlestick Charting! Candlestick charts are thought to have originated in 18th century Japan and used in trading rice. And how were introduced to the Western world in the seventies by Steve Nison in his book Japanese Candlestick Charting Techniques.
This picture below shows a basic trading chart. You’ve probably seen them before. They show the daily movement of the price of a stock with longer-term views in “candlesticks.” Typically, red candles show a price drop and green ones indicate an increase.
Price patterns are nothing more than formations created by the changes in the price of a stock. And once you begin to learn the art of candlestick charting, patterns will begin to pop out at you. Learning to read these patterns is at the foundation of what we call “technical analysis.” Here is the “hack” that I mentioned above, and the key to becoming a highly successful trader in the market.
Predictive Power of Price Patterns Hack To Trading
It’s called the Predictive Power of Price Patterns. It’s easy to remember and it’s the key to learning how to determine the right stocks to either invest in or trade. You can become an expert in technical analysis just by learning what a pattern is telling you about the direction it will go in the future, with a very high probability of success.
Price movement creates many patterns, but there are some specific ones that we trade on in our daily Jade Bronco trading group. The patterns in the diagram below indicate the strongest key patterns – trending, reversal breakouts and continuation patterns – that we are always on the hunt for.
Look, making money in the market is not as difficult as some news agencies and market pundits like to make it look. With more and more of us staying at home, working from home and more time on our hands, and with right now being one of the hottest markets in history…. Now is the time to learn how to become a highly successful investor.
Your Best Best At Trading Successfully
But, please take my advice. Find a successful and seasoned coach to take you under their wing. Better yet, find that coach and become part of a community of highly successful traders who work daily together to find the best trades and invest together.
It looks like 2020 is coming to a wrap. And what a year it’s been! Since the Covid-19 pandemic outbreak earlier this year, I have received a flood of calls and visitors to our website from people becoming more and more interested in learning how to trade in the market – stocks, options or Forex.
And it makes sense to me because I speak with people all day long who are not only concerned about their physical, emotional and social wellbeing right now, but because most of us are not able or allowed to work from home, they have become worried about their financial health as well.
How Covid-19 Has Changed The Way We’ve Invested This Year
Statistically, year over year, only 47% of Americans are invested or trade in the market. And that includes traditional financial instruments like 401K’s and IRA’s. But I think that may be changing with health concerns and the mandate for all of us to stay home as much as possible and “slow the curve”, stay home, stay well and stay safe.
Since this pandemic broke out earlier this year, millions of people across the nation want to learn how to quickly become a successful trader and investor in the market. I saw recently where one of the online trading platforms recently boasted an increase in its client base from 10,000,000 to 13,000,000 in the first four months of the year.
You Can Still Be Successful At Trading No Matter What
So many people want to trade in the market, like, right now. But the lack of knowledge and expertise, practice and especially the support to learn the skill set of a successful trader, most outcomes have been grim to say the least.