Algorithmic Trading and NeverLossTrading

 

Not too long ago, the vast majority of the transactions in stock exchanges were executed by humans or required frequent human input along the trading process. This trend has changed dramatically over the last decade, and especially over the last five years, where ultra-fast computers now conduct most of the transactions. The use of computer algorithms, which make trading decisions, submit orders, and manage those orders after submission, is known as Algorithmic Trading (AT), often also called High Frequency Trading.

NeverLossTrading, Your Software and Concept to Cope With Algorithmic Trading (Daily Chart)

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This technological change has taken over most exchanges. In the year 2012, about 78% of the trading volume in the US equities markets is due to Algorithmic-Trading also known as High Frequency Trading.

 

Key Users of Algorithmic Trading Methods

Algorithm Traders Altogether, institutional investors dominate 85% of the financial markets.

How to Beat the World’s Best Institutional Investors?

“NeverLossTrading Spots the Action of Institutional Money, to Copy their Moves.”

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There is no way we can beat the big money by knowledge:

 

  • Institutions have more tools and people to analyze the market.
  • They are insiders by sitting in supervisory boards.
  • Their leaders meet with the key leaders of nations and industries.

 

We are not in the position to beat the financial pros in their game and we do not want to. We benefit by spotting and copying their actions.

 

Even though the SEC (Security Exchange Commission) intends to create an even field by legal rules and regulations, we will never be in the position to compete with institutions, and again:

“Our solution: Do not compete; Benefit from copying institutional action.”

The key advantage of a private investor is:

“We can get vastly in and out of investment decisions, much faster as institutions can and this is how to beat them on the average price in and out of a position.

NeverLossTrading and TradeColors.com are algorithmic based trading systems with human decision making, programmed to constantly reset and calibrate themselves automatically while identifying and following the most prone algorithms used by institutional to trade stocks, commodities, currencies, and treasuries.

With NeverLossTrading, You Trade What You See!

We put the footprint of the big money right on the chart for you to follow!

NeverLossTrading teaches four trading concepts. Each concept considers and constantly readjusts to the today’s high frequency trade environment.

NLT HF-Stock Trading Chart

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What is the role and characteristic of algorithmic trading?

There are multiple trading strategies and algorithms used and we developed specific indicators and studies to make those visible for the NeverLossTrading user.

Market Participants and Trade Characteristics

Liquidity Based Trading

Momentum Based Trading

Methodical: Statistical-,       Technical Trading

 

Regulatory exemption to reduce spreads by quoting both, a buy and a sell price in a financial instrument or commodity held in inventory, with the obligation to buy and sell at the displayed bid and ask prices.

 

 

Monitor for securities, like stocks, which show significant changes in movement and/or volume.

 

 

  • Exploit pricing differentials between correlated securities and markets.
  • Discover technical setups based on predefined recurring patterns in stock prices.

Characteristics

 

  • Profit earned from the offer as well as from rebates for providing liquidity.

 

Characteristics

 

  • Constant monitoring of thousands of stocks for mechanical signs of announcements, rumors, news items.
  • Identifies stocks that meet a threshold level of variance in the rate of change of price action and/or volume and buys/sells accordingly.
  • Identify temporary supplydemand imbalances and trade with shortterm momentum as equilibrium is restored.

Characteristics

 

  • Statistical: Defines maximum range of variance and takes counter trade when that range is exceeded.
  • Technical: Selects stocks that fit particular technical patterns that have been shown to create favorable riskto reward opportunities.
  • Entries and exits are precisely defined price points.

Examples

 

  • Designated market makers (DMMS) with obligation to maintain an orderly market by providing a required amount of liquidity in specific stocks.
  • Supplemental Liquidity Providers obligated to maintain the national best bid or offer 5% volume of the trading day.

 

Examples

 

  • News story causes a spike in price and volume. Algorithm rapidly buy or sell on the news event.
  • Algorithm recognizes a major up tick and trades with or against it.

 

 

 

Graphic Developed by: Never Loss Trading

Examples

 

  • Correlated market happenings: Stock moves with SPY or independent.
  • Trend-following or trend-fading strategies.
  • Arbitrage on highly correlated stocks (Pepsi and CocaCola) or commodities: Gold miners and gold commodity.

 

Liquidity/Order Flow Indicators

 

NLT Nominator,

NLT Purple Zone,

NLT Price Gravitation Lines,

NLT Time-of-the-Day Price Ranges.

 

 

 

 

Momentum Indicators

 

NLT Top-Line.

NLT HF-Indicator,

NLT TradoMeter,

NLT Price-Volume Indicator,

NLT Double-Decker,

NLT Box.

 

Methodical Indicators

 

NLT Top-Line,

NLT CommandoGraph,

NLT Comparison Study,

NLT Wave,

NLT Candle Color.

NLT Seasonality.

 

Our Indicators search and identify institutional action at all time frames and trade strategies and paint institutional market action right on the price chart.

All of the above strategies have common denominators, which we explain in the following:

 

The NLT Price Move Model

A) Prices accumulate prior to a price move and our indicators are identifying this stage by measuring price-, volume- and volatility development, with the NLT-specific market pressure model.

B) Prices test the high/low of a range prior to breakout. Again, our sensors are triggered and alarm us.

C) Breakout to the next price increment. It shows and is highlighted right on our charts and picked up by our scanners.

The price breakout is noticed by key market participants and is either:

Confirmed – and we trade along with it. Not confirmed – and we stay out of the trade

 

 We scan and screen the markets along with “Fund Managers”. When an initial price move is confirmed, “Fund Managers” follow the direction set by the “Institutional Leader” with buy or sell orders. Our indicators pick up the happening and we trade what we see.

A crucial element in our trading is the Speed Unit:

The SPU expresses how much average price movement per observed time unit is expected after a price threshold is surpassed. This is where we enter and trade along with the chosen price direction, with pre-defined exits at:

  • 1-SPU.
  • Prior NLT Box-Line.
  • NLT Price-Gravitation-Lines.  

Using the NLT-Indicators, we catch the waves of the markets to surf along with them, regardless if they are liquidity, momentum or connectional based:

We Trade What We See!

 The NeverLossTrading Method

NeverLossTrading, Coping With Algorithmic Trading (1-Hour Chart)

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Our algorithms and trading methods work for each security and time frame:

Financial Markets

We certainly honor and refer to the work and publications of historic traders. However, times have greatly changed. In today’s microstructure dynamics, we operate in tick-by-tick financial markets: Trading on the back of powerful computers and software, relies heavily on the ability to process and execute large volumes of trades over short periods of time. Some of the aspects of Algorithmic Trading can be gauged in disparate ways including: Volume, speed of execution, number of trades, and average trade size. For example, the SEC reports that in the NYSE between 2005 and 2009, the consolidated average daily share volume increased 181%.

We paint the price action of institutions on our charts using reference periods and specific trading strategies, which are taught in our mentorship's.

NLT Day-Trading Chart and Indicators

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In explaining the key principles of trading, we like to reference historic traders and their methods. However, if we pair their way of trading with today’s algorithmic trading markets, we recognize:

Nicolas Darvas:          His books wonderfully demonstrate how a private investor can succeed in the stock market, where he gained $2 million in18 months. In the market environment of his time, 1957 to 1958, where the stock market went straight up, he never traded an option and never shorted a stock to make his fortune.

Jesse Livermore:        He remains being quoted as a gifted tape reader. In his time as a successful trader (1900 - 1940) , the tape was the only way to get to actual stock market information. In algorithm-driven small and frequent order markets, we rather rely on our vector-based graphic programs to spot what is going on in the financial markets.

Richard D. Wyckoff:    Giving us the conditions of the trading range. Wyckoff died in 1934, when computers were far away from being introduced. Trading with readjusting dynamic wave principles is our modern way of his 1930 market philosophy.

Ralf Nelson Elliott:      He provided us with a wonderful principle of price moves in wave patterns. However, he developed his trading tools in the 1930’s. Still today, many traders try to apply the Elliott Wave Principle in the same way and manner, not considering going into an Indi-Race with a 1930 car, most likely will not win the race.  

By sharing their knowledge and principles, the above named and many other historic traders help us as private investors to gain knowledge about the key principles of the markets. With NeverLossTrading, you find their base philosophies adopted to high-speed algorithms for online trading. Backed by a vector based graphic software, you spot and trade institutional money moves on multiple time frames and for all asset classes.

Our Program Offering (click on the program for details):

NLT Top-Line                         Laser sharp swing- and limited day-trading program. Including market scanners.  

NLT HF-Day Trading           Day trading the fast pace financial markets with: Futures, Stocks, FOREX and Options with an highly advanced algorithmic trading system, allowing you multiple trades per day.

NLT HF-Stock-Trading        Made for stock traders to adapt to the fast pace algorithmic market. Key focus are position holdings for 1-5 days, striving for constant returns and compounding interest by hedging and leveraging positions.

NLT Wealth Building           Trading a basket of pre-defined securities: Stocks, Commodities, Currencies, Treasuries with the NLT principle and own software package.

NLT Income Generating     A program and concept for day trading the world’s financial markets with selected futures and options.

With each and every one of the NLT-Programs, you will be ready to trade for success in our today’s markets and conditions.

contact@NeverLossTrading.com for an introduction.

Good trading!

NeverLossTrading

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Disclaimer

The risk of trading securities, options, futures can be substantial. Customers must consider all relevant risk factors, including their own personal financial situation before trading. In our teaching of how to trade the markets, in our newsletters, webinars and our involvement in the Investment Clubs, neither NOBEL Living, LLC, the parent company of Never Loss Trading, or any of the speakers, staff or members act as stockbrokers, broker dealers, or registered investment advisers. We worked out trading concepts that benefit us greatly and share them through education with our members and clients.

 

 

 

 

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