The Ultimate Guide To The PowerX Strategy
Вставка
- Опубліковано 5 сер 2024
- The Ultimate Guide To The PowerX Strategy | Coffee With Markus | Episode 129
Intro: 0:00
What Is A Trading Strategy?: 3:04
Entering A Trade - Indicators: 7:41
Exiting A Trade: 22:30
Calculating Stop-Loss & Profit Target: 30:28
Stop-Loss & Position Sizing: 37:36
The PowerX Strategy: A Powerful strategy for stocks and options:
What is a trading strategy?
1) What to trade?
2) When to enter?
3) when to exit
- With a profit
- With a loss -- Stop loss
Challenges of trading strategies:
- Too Complicated
- Too Discretionary
- Don't have clear cut rules (like the previously mentioned 3)
A trading strategy:
1) Easy to understand & execute
2) Needs to be Mechanical -- with indicators
3) Clear entry and exit rules
3 ways stock can move:
1) Up
2) Down
3) Sideways
We need to know:
- When to buy?
- When to Sell?
- When to not trade?
ENTERING A TRADE
Indicators: for a rising market:
1) RSI - Relative Strength Index. Osilates between 0 - 100. Look over the RSI over the past 7 days to see if it is above 50. If so, the stock is more likely to go up.
- One indicator can give false positives, so it's a good idea to use more than one.
2) Stochastics (14, 3, 3) also want this to be above 50. If so the stock is more likely to go up.
3) MACD (12, 26, 9) If above the signal line, the stock is more likely to go up.
Indicators: for a falling market:
1) RSI - Relative Strength Index. Osilates between 0 - 100. Look over the RSI over the past 7 days to see if it is below 50. If so, the stock is more likely to go down.
2) Stochastics (14, 3, 3) also want this to be below 50, if so the stock is more likely to go down.
3) MACD (12, 26, 9) If below the signal line, the stock is more likely to go down.
Black Bars:
When you see black bars, this means that only two of the three indicators are pointing in the right direction. MEANS MARKET IS MORE LIKELY TO GO SIDEWAYS.
EXITING A TRADE
Limit your losses.
- 2% rule - Never risk more than 2% of your account on any given trade.
Profits.
- When to take profits?
- Golden Rule- 1:2. You take 2x the amount you risk as profits. You can be wrong half of the time & STILL make money.
- SRC Profits
* Systematic
* Repeatable
* Consistent
How to calculate stop-loss & profit target:
For Stop loss:
- ADR = Average Daily Range (7 days)
- Entry Price minus 1x's ADR = Stop loss.
For Profit target:
- Entry price + 2x's ADR = Profit Target
"Nobody ever went broke taking profits"
Stop Loss and Position Sizing:
- Stop Loss (ADR) = $0.40 per share ($0.40 just an example)
- Overall Risk = $200 (2% based on a $10K account)
- Position size: how many shares should we trade?
* Overall Risk / Stop Loss
- 200 / 0.40 = 500 shares
Recommended Videos:
The PowerX Strategy Playlist: • The PowerX Strategy
The Options Wheel Strategy Playlist: • The Options Wheel Stra...
Options 101 Playlist: • Options 101 - A Beginn...
Options Income Trading Strategies: • Options Income Trading...
The 5 Biggest Mistakes New Traders Make: • The 5 Biggest Mistakes...
Generating SRC Profits - Here's How To Do It: • How to Generate System...
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Did you find this presentation on the PowerX Strategy useful? Leave your questions and comments down below.
Recommended Videos:
The PowerX Strategy Playlist: ua-cam.com/play/PLBa3sAx-Io2l9ZV4s66J-uNkG6AJvhSPB.html
The Options Wheel Strategy Playlist: ua-cam.com/play/PLBa3sAx-Io2nosgosERUhIZwzvIgD-3Vq.html
Options 101 Playlist: ua-cam.com/play/PLBa3sAx-Io2m6vWuLNRz4HHUErjO8H6N8.html
Options Income Trading Strategies: ua-cam.com/play/PLBa3sAx-Io2mybLLdWtbjTFqK9-BR5SJb.html
The 5 Biggest Mistakes New Traders Make: ua-cam.com/video/DY_0lq_LdQc/v-deo.html
Generating SRC Profits - Here's How To Do It: ua-cam.com/video/FP2x4JULzwU/v-deo.html
Thank you!!! Could you give a little talk about how to set these indicators up in the TastyWorks platform, please? There are other options that you did not cover in this software (stochtastic). Thank you again.
Hey did you grow your hair out cause you're a savior?
Excellent
This made what was very confusing as a new trader so much clearer. I feel like if I used what was taught in this presentation I could make $$ on a consistent basis.
Question please, i’m confused between the ADR to be used as Stop Loss & using the 2% overall as risk stop loss. Should i exit the trade based on the 2% or ADR?
what if they don’t match, let’s say I bought a $10 share and ADR was 0.5, should I put a stop loss at 2% $9.8, or $9.5?
Just wanted to say, I love your channel, love your style of teaching. I have seen a lot of these types of videos, and I keep coming back to yours. Thank you for doing these!
Hi David Rizzo, thanks for watching. And thanks for your feedback. Much appreciated. "See you" in the next video 👍
@@rockwelltradingservices aaas
Very clear and understandable presentation and removes emotion from trading activity! More More! I am 3 mnths into trading. Eating it up!
Thanks, best introduction to practical trading I have found on UA-cam. Thanks so much!
Hi James Welsh, thanks for watching. And thanks for your feedback. Much appreciated. "See you" in the next video 👍
Markus you do the best job explaining everything in great detail! Wish there were more people like you on youtube. Keep up the good work, your work is invaluable!
Thank you for your support, Replica! :)
I love your teaching style Markus. Thank you for not being greedy and sharing this with us for free. I’m going to be watching a few more of your videos to get a little more understanding of the markets, than I’m buying whatever you’re offering.
You are welcome! I am glad that this helps! :)
Your videos always answer every question I ever have, your such a great teacher and I send many blessings your way!! Your a godsend!
Hi laura BOTELLO, thanks for watching. And thanks for your feedback. Much appreciated. "See you" in the next video 👍
Wonderful presentation for new viewers and great refresher for members of PXO. Thanks for sharing.
Hi Tom Morrow, thanks for watching. And thanks for your feedback. Much appreciated. "See you" in the next video 👍
Hi Markus this is one of the best videos I have seen about trading! well explained, well structured and you even went into the details that makes it for us easier to follow and copy this strategy! Thanks again Markus!
I am glad that you like this mike ballast. ;) What do you like about my strategy?
Excellent. Very good teacher. Intro, content demo, and summary.
Awesome! Thank you for watching! :)
By far my favorite strategy yet! Very straight forward I can't wait to try it out
Thank you! :)
Thank you Markus for the helpful video.
You are welcome! I am glad this helps.
Excellent teaching style and easy to follow strategy. Highly recommend this tutor.
Thank you! ;)
Very clear presentation no doubt you are a good educator, thank you very much Markus !! I'm still reading the book.
Hi Edgar Leon Sr, thanks for watching. And thanks for your feedback. Much appreciated. "See you" in the next video 👍
Markus, you are great teacher! I've been trading for a while, learning the hard way. For the first time I get a crystal clear rules in my sights. Last few days I've been binge-watching your videos, and I'd like to buy both of your books. I love your UA-cam channel. Thank you.
That is awesome! Here is the link to the bundle bit.ly/49pGuEp
Great video Markus! This review was awesome and always very useful and helpful. I must say I'm doing well with your strategies and hope to become a Mastermind Member soon! Thanks for all you do for us Markus!
That is awesome, Super Dave. I am happy to read success stories like this. :)
Soooooo educational and helpful basic rules. Life saving and money saving..! I’ve set up my whole trading platform with the mechanicals that I learned from here, Thank you a lot!
😊 You are welcome! I am glad that this helps!
I’ve had a horrible time grasping some concepts. Your stuff is so easy to follow and understand.
I also trade the Wheel strategy with a group on Fridays. Two of us found you and started sharing with the group (eg, $20k loss into $6k profit, etc.) Great material all the way around.
Looking forward to climbing the value ladder here!
That is awesome! Let me know how it goes for you guys! ;)
Great presentation Markus! Thank you.
Hi Francesco Pipino, thanks for watching. And thanks for your feedback. Much appreciated. "See you" in the next video 👍
thank you for a wonderful info, can't wait for my scheduled app with your team
Awesome! Thank you! :)
Marcus Thank you for a clear & precise presentation.. Easy to understand. You did an excellent job.
Thank you!
Thank you Markus. Your presentation clearly illustrated that part in The Power X Strategy book. I get it now.
Hi Pete M, thanks for watching. And thanks for your feedback. Much appreciated. "See you" in the next video 👍
Another spectacular video! Thank you Markus!
You are welcome! I am glad that this helps! :)
👏🏾👏🏾👏🏾👏🏾👌🏾 as a beginner trader this advise is golden , I will paper trade first and learn to sit on my hands ☺️
I am glad that this helps! :)
I have the book and it's very thorough. Great presentation. Thank you
😊 You are welcome! I am glad that you got the book. Enjoy learning.
Excellent presentation. You are a good trainer
Thank you! :)
Excellent! Thank you , Markus!
You are welcome! I hope this helps.
I feel like I got a financial college education all wrapped up in an hour. Thank you so very much!
😊 You are welcome! I am glad that this helps!
The book is great. I really enjoyed this video. Thank you!
You are welcome, Larry. I am glad that you like the book! ;)
Excellent Presentation Markus. Thank you.
😊 You are welcome! I am glad that this helps!
this information you give us is golden . thanks
😊 You are welcome! I am glad that this helps!
Very informative indeed! Thank you
Hi Muhammad Zafran bin Naharrudin, thanks for watching. And thanks for your feedback. Much appreciated. "See you" in the next video 👍
Great video. Thank you
Thank you for making these great videos. I love your channel.
You are welcome! I am glad that this helps! :)
Would really like to see a Monte Carlo simulation running with your strategy and parameters
Really appreciate your overall energy 🙂
thank you so much for your videos, I am a beginner thank you again for helping me understand the chart, I'm no longer blind and confused when I see the chart
Awesome! Thank you for watching! :)
Great info. Thanks Markus 👍
Hi Jimmy James, thanks for watching. And thanks for your feedback. Much appreciated. "See you" in the next video 👍
Very simple and clear!!!
Thank you! ;)
Fantastic Presentation!
Awesome! Thank you for watching! :)
Great presentation!
Thank you! ;)
Very Informative ,I would love to try the Powerx Strategy software and is on my radar to do things .Just waiting for the right time
Awesome! Thank you for watching! :)
I just found your channel and love your videos! This was super helpful. I have a question about the chart. How do you make the red, green, and black bars appear?
Thank you Markus.
You are welcome! I hope this helps.
Thank you for your sharing! It seems that those indicators little bit lag from both entry and exit. What can we do on this lag problem?
Thank Your very clear and understandable
Hi Farhad Rafiepour, thanks for watching. And thanks for your feedback. Much appreciated. "See you" in the next video 👍
I liked your explanation very much.... thanks....
😊 You are welcome! I am glad that this helps!
Dear Markus, thank you for everything you have put together to help us in this endeavor.
Based on your PowerX strategy, I have created a spreadsheet file calculating it all. After doing a TD paper trading, I have found that, if a stock's ADR is very low, then the number of shares to buy (risk/SL) based on your strategy sometimes suggests that you to
buy so many shares that end up using your whole account's total or more, leaving you with no funds to invest in another stock until this investment is realized - either at a gain or a loss.
In other words, the shares to buy based on PWX's OR/SL is only worth it if the ADR is consistently high enough. Please let me know if this makes sense? I may be wrong.
Same issue, I try with an entry of 417.6 and an account size of 21,000.00, with an 7.69, I end up that I should buy 55 share but, 55 * 417.6 = 22,968 which is more than the account size.
Amazing video .
Thank you!
Always helpful Markus
Hi Wes Guild, thanks for watching. And thanks for your feedback. Much appreciated. "See you" in the next video 👍
Excellent video Markus thanks. Brilliant way to trade!
you have another video talking of your power X strategy applied on options trading? (With options exemples)
But I would say for now that I like a lot the way your are doing the Wheel Strategy. I am practicing on my paper trading account to see how I can apply it the correct way in real account.
Cheers
Awesome! Thank you for that feedback. 😊
I just bought both your books in description for $10, looking forward to reading them.
That is awesome! Please let me know when you are done reading the books. 😊
Great episode
Hi This IsFootball, thanks for watching. And thanks for your feedback. Much appreciated. "See you" in the next video 👍
Thank you!
😊 You are welcome! I am glad that this helps!
Thanks Markus for this video, very easy to understand and concise. i will be applying this as a newbie. Thanks
again you are God sent.
That is awesome! ;)
Good job sir 👍🏻
Thank you! 😊
Regarding position size and total account value:
How would a $10,000 account that's risking $200 / trade ever buy 6 shares of TSLA at $850? That's putting up 51% of your $10,000 account. Even buying 500 shares of the $8 stock you discussed gives me the impression you'd risk a large percentage of the account value to make a signal trade...Even with the stop loss in place.
I understand the stop loss safety net and how that equates to $200, but it seems like you are a smart, conservative investor. Would you ever tie up close to 50% of your total account value for a single trade?
I am an older investor that has a low income and small account...learning, and trying to understand the psychology or comfort level professionals like you develop.
Thanks for you videos and this channel.
Great presentation. Can we use ADR stop-loss for options, like you explained in the video? or it is only for stocks? Thanks.
Well if you're selling a contract you're kind of locked in to the position, so you would have to buy to close for potentially an even bigger loss. In other videos he has said not to panic if the stock drops a bit. I mean, you're making premium by holding onto the stock so if it's staying in that daily range or even dips a bit below that's actually what you want. If buying an options contract I'd assume you would just exercise once your price target is met and would ride out the contract if it isn't met (you can't lose more than the premium anyway).
... great stuff...
Awesome! Thank you for watching! :)
Much appreciated you make it easy for me to learn n especially understand now. So I will start trading bull debit spread on any stocks I can identify in the market.
Thanks brother
Paul Kamakande
Papua New Guinea
Awesome! Thank you, Paul. Have you watched my other video?
The wheel is just brilliant. Just getting into this video though
Awesome! Thank you for watching! :)
Hi, Marcus,
Great video thanks for the information and the strategy.
Question,
If we are using 1:2 Stop loss - Profit
What happens when the bar turns black before we have 2:1 Profit? Do we sell the shares? or we wait for the red bar?
or the red bar is only for a short position?
Let me know,
Great question. In the book it says you should sell at the first black bar but I’ve found this is often not a good idea as you end up losing money only to see the price rebound on the next bar.
So what I’ve found works well is this. If you are in profit, then yes, sell on the first black bar. If your trade is losing money, let it run until the first red bar and exit then or exit when your stop is hit or when your profit target is hit. You’ll find that a lot of stocks that are trending up will rebound from a black bar. You’ll find that a black bar is caused by whipsaws of the RSI above and below the 50 line. Same with the MACD. So hold out until you really do need to get out or you will end up selling on minor pullbacks.
Thanks Markus. Priceless lesson. question regarding the indicators: my broker platform (TD Bank) shows 2 Stochastics; one is fast stochastics and the other one is slow. which one I should use? and I appreciate if you briefly explain the difference. Thanks
Hi Markus. Great video. I ve really been enjoying your content and teaching style. One question... Don't RSI and stochastic measure the same thing? Thanks
Hi Jodi, great question. They are both oscillators, but one of them is measuring the strength of a trend and the other one is trying to identify overbought and oversold situations. In my experience, they complement each other. 👍
Thanks Markus. Just a question; when we check 3 indicators, we should look it in what time frame? Day, week , month or doesn’t even matter?
Thanks for your strategy. The stochastic has two lines %K %D. You only show one line. Which one should we use?
Thanks.
You are welcome! I am glad that this helps! :)
How would you apply this to an options example in terms of the price of a contract?
Hey Markus! Huge fan of your videos. I have one question.
If you have multiple stocks that fulfill the criteria of first green bar, which you would have more often than not, how do you prioritise which stock to trade?
Hi Gagan, great question: I like to trade up to 5 stocks at the same time, and in the past, there hasn't been a problem selecting these 5 stocks with PowerX Optimizer. I'm mainly checking: "How well would I have done if I had traded this stock according to the rules of the PowerX Strategy over the past 2 years?" And THIS makes my choice very easy. Does this help?
Fantastic video. You did awesome job to explain it super easy👏👏👏
I couldn’t find ADR chart? Does it have any other name?
ATR
Bobby Brown thanks! I checked ATR as well. It shows a range but what Markus referred to what an exact figure for each trading day
Sei molto simpatico e il tuo inglese lo capisco bene. complimenti.
Thank you! ;)
Watch came across this video. Great n clear presentation!
Wonder anyone has tried this strategy for a period of time? Can share with me what's the successful rate of getting 1:2 profit ratio with the 3 Indicators aligned for entry signal?
Appreciate for the fellows feedback
I can not find Stochastic Oscillator - but it lists different labels - Stoch. RSI, Full , fast moving slow moving, sto. momentum etc.
Stoc. momentum looks almost identical MACD. Appreciate if you could clarify please.
I watched this and loved it, especially regarding the indicators. My question is that when you are trading options, how can you the risk management if the minimum number of shares has to be 100 for the contract? Also can I ask graph you use? Or would any graph have the same on the bottom for your 3 indicators. Thanks Markus!
I am using the Wheel Calculator in my software the PowerX Optimizer. If you want to learn more you may schedule a tour with our expert, Paul. Just reach out to support@rockwelltrading.com and look for Cristy.
Very good video. You do "tilt" my math bias by subtracting incorrectly, as a general rule an odd number say 8.11 minus an even number say .40 cents will always give you an odd number, so the answer is 7.71 at 34:39. But this is an unfair nitpick. More substantially I was wondering how setting your stop (loss or gain) to trigger when one of your three indicators moved negative compared to using ADR? (I know this is an old video, but really interested in your content, great job!)
Use margin account
My stoch indicator on tradingview has two lines. A blue line and an Orange one.. Please advice
I'm wondering if the Stochastics indicator was all that useful, given that the illustration used had an indicator that was lagging behind the RSI but otherwise nearly matched the RSI in direction.
HI Markus,
Thank you for the great presentation. I alos bought your book the Power X Strategy. But there is someting different in the video you use 1* ADR for the risk calculation but in the book you suggest to use 1,5* ADR. So I have 2 questions: Which one are you prefering right now and are some other differences between your videos and the book.
Thank you :-)
Since Version 2.0 of the PowerX Optimizer, we are using 1.5 and 2.5 for the stop loss and 2.5 to 7.5 for the profit targets, Have you seen the latest version of the software?
Amazing explanation. Still trying to understand where do I find this charts.
You are welcome! I am glad that this helps! :)
Hi Markus, I have subscribed this channel today I watch few videos also, I feel it's really useful, but I have a question, can it be used in day/Intraday trading?
Hi Vinod, I personally only use it for end-of-day, but I have head from some traders that they use it on 5min and 15 min charts.
Thanks for subscribing! 😀👍
THANKS FOR VIDIO I LIKE 👍
Hi Atriana Atriana, thanks for watching. And thanks for your feedback. Much appreciated. "See you" in the next video 👍
Question please, i’m confused between the ADR to be used as Stop Loss & using the 2% overall as risk stop loss. Should i exit the trade based on the 2% or ADR?
what if they don’t match, let’s say I bought a $10 share and ADR was 0.5, should I put a stop loss at 2% $9.8, or $9.5?
Mathematically, all 3 of those indicators (rsi, stoch, macd) are measuring the same thing, you're just doing different periods. RSI7 is a normalized version of EMA7 (first derivative average), Stoch14/3/3 is a normalized of the EMA3 minus EMA14 (go ahead and program it, you'll find it matches visually), and finally, the MACD12/26/9 is just the conjunction of EMA12 minus EMA26 exponentially averaged over 9...which, technically, is just a long arithmetic form of the more simple EMA6 minus EMA13 (rounded).
So what you are technically doing is having EMA3/6/7/13/14 on your chart, and you are looking for them to pretty much be in order (no crossings)....but the EMA3 will always be first to cross any other line, while the EMA14 is the slowest....the 3 is tangled with the 7 on the short scale, and the 14 is tangles with the 3 on the long scale....this means you can cut all of that down to just EMA3/7/14. If 3>7>14, buy trend; if 3
Hi, could you elaborate this a bit more, for somebody who is completely new to this?😅 Do i input these values in a charting software, how do i do it, and what software would you recommend? Thanks so much🙏
@@omgmrtea Most charting software has EMA functionality, any of them will do. It could be under the name "moving average" or "exponential moving average" (EMA is the acronym for it).
I prefer TOS because I ca program whatever I want, but that's broker specific. A lot of people use tradingview.
Wow thats even simplify our work.
Anyways, does that work? You tried that out?
@@elynno9911 I don't use any of these. I am a premium seller making over 120% per year. I pick companies that I like, and that's about it. I use strict math that I've come up with to determine position, I see chart indicators as tarot cards.
How do you get the green and black bars on the chart?
Very nice presentation, Markus! Gratuliere! Can you share with us which charting program are you using? It doesn't seem to me that you are using your trading platform.
The charting platform that I am using is TradingView: bit.ly/2The5LI
@@rockwelltradingservices Thank you, Markus!
Where does the ADR come from and how to set up?
great
Awesome! Thank you for watching! :)
A Great Teacher, even a 10 year old could understand but unless I practice i can't remember it, though it looks so simple. I understand the risk that is too good. I know my target Profit. You have not mentioned time span for the trade. The other parts that are not covered is the what if the price doesn't reach the target price and how to find the right stocks to trade. I just recieved your two free books on The Wheel Strategy and the Powerx strategy hope I find infprmation in there. If I want to trade the indian market would your software works for those markets?
Hi Shanker, the software works for US and Canadian stocks as of the moment. We are continuously updating it to suit the international market in the near future. I am glad that you are learning from my books! ;)
Hi. This seems to be best used for day trading, correct?
Hi Doug, I'm using it on DAILY charts, i.e. for SWING TRADING. Does this help?
Unfortunately, you would have lost with the TSLA trade... easy to say in hindsight on Feb. 3rd!
Marcus! when putting on call options or puts can we use this same stratetgy and how will this affect our profitability since the option pricing does not move in sink the same way? can we simply buy the calls that correspond to the pricing we come up with here or would this not work? thanks much
Hi Mark, YES, exactly: Instead of just buying the stock, you can simply buy a CALL option. 👍
@@rockwelltradingservices thanks so much for your videos they are topps! The value is big time intrinsic like an option that goes my way!!!!
LOL - Thanks! Love the analogy 😎
I must of missed something (not uncommon with me). I did not find where you defined your indicators, i.e., simple, exponential, weighted, etc.
You can go to mytradingroutine.com and the video about them there. :)
What is the best time for result ?
And is this strategy work in short time like one minute or five minutes ?
I heard of traders who trade this strategy on 15 mina nd 60 min charts. I personally trade it on DAILY charts.
Thanks for your teaching, Markus! I made 170% gain on a day trade today with BIDU that was set up for the PXS. Do you use the Power X strategy on the daily time frame only or does it work on smaller time frames, e.g. 5, 15, or 30 minute?
NICE! I personally use the PowerX Strategy on DAILY charts only, but I have heard from several day traders like you that they use the indicators on a smaller timeframe with very good results. 😀👍
@@rockwelltradingservices Sounds good! I'll study it and see. I typically swing trade but I like to day trade on my day off.
Awesome! Thank you for watching! :)
Hello again, Markus! I received your PXS book late last week & read it over the weekend. Very well done! Unfortunately, I’ve bought some trading books that aren’t so well done. Yours is excellent! Question: Do you trade PXS against the overall market? For example, if the overall market is bullish but you see a bearish PXS set up, do you take it or do you look only for stocks moving in the same direction as the SPY, QQQ, & DIA? Thank you!
What is a difference between ADR and ATR average true range?
I believe the ATR includes only the daily range (from high to low) of each bar whereas the ADR includes gaps as well. But as the strategy advises you not to trade GAPPY stocks there’s really very little difference. And in any case ATR is readily available on most platforms, and ADR is not. ATR is also what most traders use.
Hi Markus! Great video as always. In my Power X Strategy book. It says to set the stop loss at 1.5 * SDR and profit target at 3 * SDR. I see you are recommending 1 and 2 respectively now. Is there a reason for the change? Thanks 👍
This video is a very good summary of the book; there is still a difference with the coefficient for stop loss : a change in the strategy?
HI Markus, Do you have any presentation on Forex trading?
This strategy is specifically for stocks and options. Markus believes that FOREX trading is a scam. The problem is that that FOREX has no exchange where you can trade so your broker is taking the other side of your trades. You lose, your broker wins. The other problem with FOREX is that the value of currency pairs are manipulated by the banks to take out your stops. Currency has no intrinsic value so indicators like RSI and many others that were designed for stocks and commodities are meaningless. The vast majority of scam brokers are FOREX brokers because they know it’s easy to cheat FOREX traders. Do yourself a massive favour and stay away from FOREX if you want to be successful.
Can someone tell me the Chart type used here? I am unable to find out what it is! Area + *** What type bar chart give red, green and black sticks?
Thanks in advance.
I was wondering the same thing.
You need to use a line, not a candle or a bar. Then go into the line setup and turn down its visibility so that it cannot be seen. Then apply the ‘Power X’ indicator by Rockwell. This indicator gives you the coloured bars.
@@davidhaylett1810 is he running his proprietary software on this presentation? Not sure what you mean by applying the PowerX indicator
The ‘Power X’ indicator is a custom indicator produced by Rockwell. It’s available free on Tradingview charts so you can add it to your charts. You must do this if you want to get the coloured bars.
Your book recommends 1.5 x ADR for the risk, but this video has changed to 1 x ADR. Can you explain the reasoning behind the change, please? -Thx!
I am also curious about this!
I think the video is just showing the principle and uses 1 ADR to simplify the numbers. In reality use either 1.5 ATR or up to 3 ATR’s. 1.5 ATRs works but you will find that you get stopped out 50% of the time.
I’ve done quite a lot of backtesting on this with various ATRs and found that 3 ATR’s work better. The total profit is similar but the % of wining trades increases a lot so psychologically it works better and will give you more confidence that the strategy is working. But it’s a personal choice. You might feel more confident following the book exactly. But expect your winning trades to be around 50%, perhaps a bit less.
But don’t use 1 ATR as a stop. This is simply too tight, especially for stocks.
@@davidhaylett1810 Thanks very much for taking the time to explain. If I'm understanding you correctly, you prefer a maximum stop-loss factored at 3ATR. If you wouldn't mind, please share what your backtesting resulted in as winning percentage at that level. Thanks Again :-)
@@davidhaylett1810 Also, are you still going with a 2:1 target Ratio when using 3ATR as the stop-loss? Thx!
I’m using 3 ATR profit target and a 3 ATR stop loss. This does generate a bigger total profit but the main advantage was the higher winning %. So my winning trades were twice as many as my losing trades. So out of 1200 trades across the S&P 500 stocks in one year I was getting around 800 winning trades and 400 losing trades. But my selection criteria include quite a few extras on top of the Power X criteria, essentially to pick out momentum stocks that are rising, No point in trading stocks that have only moved 5% all year so I exclude those type of stocks, etc.
When using these 3 indicators are you only looking at a daily chart?
Hi Greg, yes, I look only at a daily chart. I used to day trade, but not any more. Here's why: ua-cam.com/video/lJSNGR1A50Y/v-deo.html
Does this help?
The daily chart is the most profitable and easiest to trade so stick with this if your are a newbie.
Does it work with option ?
I use The Wheel Options Trading strategy for options. This strategy is also integrated in our software.