Are you a SMART trader?

March 23rd, 2017 by VantagePoint Software

Smart Trader

Trading is difficult for many reasons. But, that does not mean you can’t do it well, especially if you trade intelligently. Trading intelligently is about the decisions you make before, during, and after your trade. But, trading SMART is about how you think and behave as a trader.  Traders should make it a goal to be both intelligent and SMART. Here are a few characteristics of a SMART trader and some tips to improve your own trading style.

S-mooth

Trading has a way of getting under your skin if you let it. Don’t let it. A SMART trader always keeps their cool and do their best to not get ruffled feathers. Volatility in the market can pay off for a trader. But, it will never pay off if your volatility keeps you going up and down with your trade. Don’t be that trader who freaks out when the opposition scores; rather, be the smooth trader who remains calm under pressure and keeps both eyes on the ultimate prize.

M-echanical

Trade as if you are a mechanic – follow a process. There is room for creativity in trading, but not much. Being successful is all about keeping the machine running well. To do this, one needs to build and execute trades with the idea that every screw is important, and all the parts need to work together to make the engine hum. Define your strategy precisely and then stick to the plan.

A-daptable

Be disciplined in following a process. But when that process is failing, smart traders need to adapt. Maybe you need to research a new sector, acquire new information about your market, or find a new time to set up your trades. Or maybe it is just the market going screwy and it may be best to sit out for a time. But whatever your trading plan, if it is not working, you must adapt. You must change and be willing to try and new strategies with an open mind.

R-isk averse

The most important thing to always be thinking about when trading is avoiding risk. Now, there is always a risk when trading, you’ve seen the disclaimers. But, the goal of trading is to minimize that risk as much as possible. This way you can win more than you lose. Behave as if every trade is the only trade you will make, and you desperately want to win.

T-ool oriented

Trading is long past the days of hand-drawing charts, and it is well into the days of software-based trading, which means having the right tools is about software. But not any software will do. A SMART trader needs a smart software. VantagePoint, for example, uses artificial intelligence to sift through massive quantities of financial data, uncover the hidden patterns and relationships in that data, and use that information to predict market trend changes in advance.

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Market Risk – Moving the Odds to Your Favor

February 17th, 2017 by VantagePoint Software

Market Risk and Reward

There is an inherent market risk when trading. An obvious statement, we know. But why, then, do so many play the market as if risk does not exist? Why do so many traders lose more then they win and, eventually, lose it all?

The answer is just as obvious. Perhaps it is because many believe market risk can be overcome, when, in reality, it can only be reduced, mitigated, or otherwise tempered.

The market IS risk to varying degrees, nothing more, nothing less. It is people (and people programming computers) making bets. There is only one certainty. The market will go up or the market will go down. You can reduce the probability to an even bet. There is no overcoming market risk – it will either go up or down. Flip a coin.

Every trade has an element of risk, but you can lessen it while increasing your chances of picking which way it will go. If you understand this, you are ahead in the game.

There are those who think that there is no need to lessen your market risk. They believe they “know” which way a given market will go, or they believe someone else “knows” which way it will go and they can listen to that person. We say that blind faith is a coin toss. At best, you will win more than you lose. At worst, you will lose all you have playing with that strategy long enough. It is not even luck – it is the law of probability. It is guessing and putting you at the mercy of inherent market risk.

Try to mitigate your market risk instead. If you do, you can bend the law of probability in your favor. There are three easy steps you can take to start limiting your market risk:

3 Steps to reduce Market Risk

  1. Learn the market you want to trade. Identify past patterns that will repeat over time.  Study them and you will be better served to see repeatable patterns you can act upon.

If you study the market from May 2009 through the summer of 2016 you will see identifiable patterns attached to repeated events. For example, in 2009 there was a repeated event – the potential collapse of the euro. A market pattern developed as that event was repeated ad nauseum in the news. We have a current event that mirrors this in the Fed’s “will they or won’t they” discussion on raising interest rates. Study the movements around this event and you will begin to see a pattern.

  1. Understand the psychology of the market and The Market ‘R Us people making emotional decisions.

The psychology of the market is correlated to the above, but it is less specific and harder to pinpoint. Nevertheless, if you track global events, stay tuned into the global consumer. Understand economic fundamentals and you will soon learn to better “predict” emotional market responses from the greater population of traders. This will allow you to be in a better position to make moves for your own portfolio.

  1. Supply yourself with software that helps you reduce market risk and help you win more often and defy the law of probability.

Understanding that market analysis software is here and ready for you to use it as a solid way to mitigate market risk. The best way to capture these benefits is to find software that works, software that has a track record of helping users determine short-term market movement. VantagePoint uses artificial intelligence to predict market movement 1-3 days in advance with up to 86% accuracy. We eliminate the coin flip approach and help you focus on markets that are more likely to produce winners and reducing market risk and volatility.

If you learn nothing else regarding your trading in 2017, understand that market risk is always present. However, with the right education, market understanding, and analytical tool, you can manipulate it to be more in your favor.

Reduce your market risk with VantagePoint

Make sure you have all the best tools available to you that will reduce your market risk. Sign up today to receive a free demonstration of VantagePoint and see how our predictive technology can help you gain an advantage over the markets and make 2017 your most profitable year yet!

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Big Trends and Big Trades after ‘The Big Game’

February 13th, 2017 by VantagePoint Software

Big Game Big Trades

The financial world is full of big trends and trendy indicators, predictors of future market value. But, one would be hard-pressed to find one as wild as the Super Bowl indicator.

According to the “Super Bowl” indicator, a win by an American Football Conference team, like the New England Patriots, means stocks are more likely to see big bearish trends.  The indicator, which was first introduced in the 1970’s, has an 80% accuracy rate according to Investopedia.

LPL Financial crunched the numbers further and found that in the year an NFC team wins, the average return for the Dow Jones Industrial Average is just under 11%, compared to just a 4.3% average return in the years an AFC team wins.

Theoretically speaking, this is interesting, and it sparks thought about probability, randomness, and cosmic forces beyond our control. But on the practical side, traders should ask the question, “Is this an indicator that I should utilize to capture big trends and utilize to risk your money?”

Putting aside the 80% accuracy rate of the above, the odds are good the market will drop substantially this year. For no other reason than the Schiller P/E ratio for the S&P 500 is extremely high. Shiller P/E at 28.6 is 71.3% higher than the historical mean of 16.7

Factoring in the current U.S. and global economic fundamentals, one does not see the precipitous danger. But, they are also not pointing toward momentous growth, which brings us to the Fed.

Janet Yellen will disclose their thinking next week. It would not be surprising to hear her say (once again) that the Fed is considering raising rates. Why? Perhaps it would be the big trends that led to an escalation in jobs and the slow rise in wages.

Combine an interest rate hike announcement with a market that has ridden big trends to new highs that may be too good to be true, and add the geopolitical wobbliness, and you have the ingredients for a snowballing effect in the market. One thing the market deems “bad” and we see a push of the panic button. Once the stampede starts, the market could easily see big trends to the downside and see a 10-15% fall rather quickly. It is that far out of balance.

While this still falls into the “possible” category, one thing that is fairly certain. According to historical terms, the market is due for a correction. The DJIA has climbed approximately 11% since the election. The “President Donald Trump Rally” looks to be weakening. When you take Trump out of the equation, there is no substantive reason for the recent market run in place since November. Which then leads to every credible market analyst pointing towards any reason it would continue.

The Patriots came away from last weekend’s game as champions as an AFC team. You can decide how much merit you will place in the unrelated “Super Bowl” indicator.

Catch the big trends BEFORE they happen with the help of VantagePoint

If you want to find a more reliable way to analyze the markets, then look no further than VantagePoint Intermarket Software. It utilizes artificial intelligence to forecast market movements 1-3 days in advance with up to 86% accuracy. If you want a specific example, then check out the chart below of the E-mini S&P 500 that demonstrates how accurate VantagePoint can be.

VP blog -Big trends after The Big Game

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Pokémon or Profits: Technology is a Game Changer

July 15th, 2016 by VantagePoint Software

Pokemon or Profits

“Pokémon Go” debuted last week and already millions of people have downloaded the app. The game has teens and adults staring at their phones, using technology to chase virtual monsters through parks, streets, and even off cliffs. Nintendo’s ($NTDOY) stock price has nearly doubled. This adds roughly $7.5 billion to the market cap of a game-maker that had previously lagged in mobile gaming. While the concept of augmented reality is nothing new, this is the first commercial breakthrough. 

Nintendo Stock

Technology has forever changed many industries from retail and automotive, banking and financial services. Being ahead of the curve and applying new technologies that improve current products, processes or experiences is what allows companies to flourish in today’s fast-paced, interconnected world.

Over 37 years ago, stocks trader and technical analysis guru, Louis Mendelsohn, identified an opportunity to take trading software to the next level. By applying an Artificial Intelligence system that analyzes global market relationships and transforms traditional lagging indicators into predictive, market leading indicators, in 1991 VantagePoint Intermarket Analysis Software became the first trading software that could forecast market direction and strength with up to 86% accuracy. To date, over 15,000 traders have utilized this cutting-edge technology to gain an edge on the stock market. And while it won’t help you catch a Pikachu, it will help you catch major profits.

Forecasting Technology in Action

VantagePoint Technology - DR. Horton Stock

VantagePoint forecasted a move to the upside (indicated by the blue line crossing over the black line) in D.R. Horton ($DHI). This stock rose 8.01% in the last 9 trading days. This equates to $2.52 profit per share.

VantagePoint Technology - E-mini DIJA
VantagePoint forecasted a move to the upside (indicated by the blue line crossing over the black line) in the E-mini DIJA D.R. Horton ($DHI). This market moved up $3190 per contract.
VantagePoint Technology - USD/JPY
VantagePoint forecasted a move to the upside (indicated by the blue line crossing over the black line) for USD/JPY. This market went up 257 pips, equating to $2550 per standard lot.

The similarities between VantagePoint Software and “Pokémon Go” extend well beyond the technology. Unlike conventional computer and console games that demand a player’s full attention, “Pokémon Go” can be consumed in bite-size increments throughout the day. This mimics a pattern that already matches most people’s phone usage habits.

Recognizing that most people don’t have all day to spend on their investments, VantagePoint was also built to be a time-saving tool. By requiring just a few minutes each day, the software fits well with the busy lifestyles of traders.

Instead of just augmented reality, how about augmenting your income?

Don’t let this one get away. Request a free one-on-one demonstration today and see for yourself how this trading software is a complete GAME CHANGER.

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Why Traders Shouldn’t ‘Sell in May and Go Away’

May 26th, 2016 by VantagePoint Software

Don't Sell in May and Go Away
Veteran traders have heard it before. Sell in May and Go Away. The idea behind the catchy strategy is warning traders of increased volatility and lower trading volume during summer months.

Some would argue this summer is the proverbial poster child for this strategy. An uncertain and highly divisive U.S. political landscape, a likely rise in interest rates this June and international turmoil such as the Brexit are just the tip of the iceberg. It’s no wonder long-side traders are thinking of pulling money from the market and sticking it in their mattresses.

But, the fact is that even the most bullish bulls can make money from the long side during the summer months. A blind strategy is a poor strategy unless you’re trying to leave money on the table.

If not ‘Sell in May and Go Away’ then what?

The quick answer is that there’s always an opportunity to make money with the right tools and understanding.

On the economic front, there are bright spots that could drive the market higher. The U.S. economy is stronger than the breathless media contends despite their efforts to suggest an apocalyptic recession is on the horizon. New U.S. single-family home sales surged to an eight-year high in April and home prices hit a record high. The usually strong spring housing market could even be stronger if only there were more homes for sale.

While all this positive economic news is great, it doesn’t mean that traders should blindly buy the SPY or other long market ETFs this summer for the sheer fun of it. Understanding which opportunities are strong stocks that have an established upward trend is the other half of this equation. Utilizing the proper tools and strategies to navigate expected summer market volatility will be how traders can use this positive news to create personal financial gains.

Instead of taking the “Sell in May and Go Away” approach, you may want to capture stocks that are in a short-term uptrend. As more of a swing trader, traders will typically hold a position for a few days up to a couple of weeks. Summer is no time to force your desires on the market. If the market tells you to get out, then do it. Light volume can exacerbate moves. Your timing will be more important than ever

Having a tool that can help your timing and give you an accurate forecast 1-3 days in advance will be crucial to your timing strategy. VantagePoint Intermarket Analysis Software provides that forecast with up to 86% accuracy.

The proprietary and patented market-leading forecasts put bulls ahead of the rally to get you in an upward trending stock before most other traders know what’s happening. How is this possible? By utilizing artificial intelligence to identify intermarket relationships and analyze the strongest drivers and pullers for a particular market.

By using the right tools, and modifying your strategy to adapt to the market conditions, you don’t have to “Sell in May and Go Away.” Instead, you can put yourself in a position to find profitable positions in any given season. Smart traders find ways to make money. And we all want to be smarter traders don’t we?

VantagePoint Forecasting in Action

We’ve captured a few examples of growth in the below video to demonstrate how bullish trends do happen in May. You just have to know where to find them, and when to do something about them.

In this video we review the following recent moves:

  • L3 Communications ($LLL) which increased 26.69% ($21.41 per share) over 49 trading days.
  • Boston Scientific ($BSX) which increased 31.82% ($5.67 per share) over 70 trading days.
  • Integrated Device Technology ($IDTI) which increased 11.11% ($2.28 per share) over 16 trading days.
  • Sanmina Corporation ($SANM) which increased 17.62% ($3.91 per share) over 22 trading days.

 

To learn more about how to use VantagePoint and see firsthand how our patented, predictive forecasts can help you, request a free demo.

VPfreedemo

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Man v. Machine – Artificial Intelligence Trading Software

June 26th, 2015 by VantagePoint Software

artificial-intelligence-trading-software

Artificial Intelligence (AI) systems have had varying degrees of success when measured against humans. In problems such as chess, which succumb to sheer computational firepower, the machines have advanced greatly in a short time.

Like chess, financial markets operate under the supposition of rational participants. Humans are supposed to be calculating the odds, maximizing return and minimizing risk.

If this were indeed the case, artificial intelligence trading software would stand a good chance at bettering its human counterparts in making and capitalizing on market decisions. Unfortunately, rationality is not always the best assumption for either humans or markets. One needs to look no further than the current economic situation to observe how irrational human traits like confidence, fear and greed play out in market dynamics. The uncertainty injected by the human participants makes the markets much harder to predict.

Back Propagation Neural Network

However, artificial intelligence trading software can be successfully applied to certain trading functions, specifically intermarket analysis. An invention by Louis Mendelsohn relates to methods and systems for performing intermarket analysis using neural networks. A neural network is a system of programs and data structures that approximates the operation of the human brain. (Learn more about Neural Networks here.)

Mendelsohn’s invention details proprietary methods and processes for selecting from a large pool of available global financial markets. These are the related markets that have the highest relevance in training neural networks to make market forecasts for each ‘primary’ market with a high degree of predictive accuracy. This selection process includes determining ‘key’ intermarkets, ‘general’ intermarkets, and ‘predictive’ intermarkets from the pool of available markets that correspond to each ‘primary’ market.

Neural Network Software

Market data for each of the key intermarkets, the general intermarkets and the predictive intermarkets can then be processed to train neural networks so that when the neural networks process this input data, predictive output data generated by the neural networks for each primary market are as accurate as possible.

After training the neural networks, all relevant market data for each primary market can be processed with the neural networks to predict future market data. That data is then used to arrive at a predictive technical indicator for use by the trader in making trading decisions.

This process drives the VantagePoint software so humans can make rational trading decisions to master the markets.

VantagePoint Software Demo

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5 Things Every Trader Needs to Know About Trend Forecasting

April 7th, 2015 by VantagePoint Software

Trend Forecasting for Traders

Trend followers in fashion can be fickle and flighty. It is tough to predict the whims of the fashionistas as to what the “hot colors” or who the “in designers” will be for next spring.

And while it is also tough to know where IBM or AAPL stock will be trading a year from now, there are some basic truisms that trend forecasters can use that apply to all markets.

Here are five basic concepts about trend forecasting that can help set you up to be potentially profitable in the markets.

  1. All Trends are NOT Created Equal – Stock Chart Patterns

If you are looking at a stock chart, examining the price movement over 30 minutes versus 30 days will yield dramatically different results. First and foremost, you need to understand what time period you are considering.

Trends can be classified as primary (long), intermediate and short term. However, markets exist in several time frames simultaneously. As such, there can be conflicting trends within a particular stock depending on the time frame being considered. It is not out of the ordinary for a stock to be in a primary uptrend while being mired in intermediate and short-term downtrends. This also applies to almost any asset class including commodities and ETFs.

Typically, beginning or novice traders lock in on a specific time frame, ignoring the more powerful primary trend. Alternately, traders may be trading the primary trend but underestimating the importance of refining their entries in an ideal short-term time frame.

A general rule is that the longer the time frame, the more reliable the signals being given. Once the underlying trend is defined, traders can use their preferred time frame to define the intermediate trend and a faster time frame to define the short-term trend.

But that doesn’t mean that each trend should be viewed in isolation. Taking a holistic approach to trend analysis can be very beneficial. Greg Firman, market analyst for TraderPlanet.com who spoke at the VantagePoint Power User Seminar in February, likened trend trading to automobiles. 

  1. There are Two Main Types of Trend Trading – Following and Fading

A trend-following strategy is one used to identify entries in trending markets. The goal of a trend-following strategy is to buy and close a position at a higher price in a bull market, and to sell and close a position at a lower price in a bear market. The most simplistic definition of a bull market is a price pattern of higher highs and higher lows. The most simplistic definition of a bear market is a pattern of lower lows and lower highs.

But according to Firman, markets trend only 20 percent of the time. Therefore, trend following strategies are not always applicable.

A trend-fading strategy is one that is used in sideways or choppy markets. Trend-fading strategies identify opportunities to sell highs and buy lows (the opposite of a trend-following strategy). With trend-fading strategies, traders profit if a position is taken and the market moves back to an established range.

  1. Moving Averages – What Every Trader Needs in Their Trend Trading Toolbox

Moving averages (MAs) are among the most popular tools for trend followers and for good reason. The technique is very effective at identifying trends and enabling traders to maintain their positions until the trend is over. Moreover, by varying the lengths over which the MA is calculated, the sensitivity to smaller price changes can be adjusted to suit traders’ preferences. Shorter MAs involving a smaller number of days or weeks are more sensitive and provide quicker and more numerous signals than longer moving averages.

Traders like moving averages because they smooth out the peaks and valley in prices, are easy to use, and are easy to interpret. To learn more about moving averages watch our recent video here.

These are the positive qualities. The problem is that MAs are a lagging indicator. That is why in 1991, after years of research, VantagePoint’s team developed technology that forecast trends based on moving averages while retaining the positive qualities and reducing, or eliminating, the lag, which is the negative quality.

VantagePoint’s Predictive Moving Average (PMA) takes actual data and predicted data to forecast market trends.

  1. Support and Resistance – Where Market Trends Can End

So how can traders tell when a trend is coming to an end?

“Key support and resistance is the biggest teller – knowing where the buyers and sellers are,” said Firman.

Support and resistance are magnets that draw the market to them. As with any magnetic field, the closer the market gets, the stronger the magnetic pull, and the more likely it is that the market will reach the target. Also, as with a magnet, the market often accelerates when it gets close to the magnet. This momentum often results in either a breakout or continuation of the trend, or a trend reversal. Once the market reaches the target, the magnetism usually greatly decreases. It is as if the market turns off the magnet once it is reached.

If the market reverses or breaks out, it then moves to the next support below or resistance above. In a strong bull trend, resistance usually results in a pause because of profit taking or attempts to pick a top, but the trend then resumes up to the next resistance level. In a bear trend, the market usually falls through all support, although it often pauses at each level because of profit taking or attempts to pick a bottom.

All bull trends end at resistance and bear trends end at support, and if traders know how to read the changes in buying and selling pressure, transition can provide several trades in both directions.

  1. Trend Forecasting – Artificial Intelligence Can Improve Your Success

Many technical indicators, such as moving averages, attempt to filter out short-term price fluctuations so that the underlying trend can be observed. As mentioned earlier, trend traders rely on moving averages because they smooth out the movement in prices, are easy to calculate and understand, and depict the underlying trend.  However, a side effect of doing this is that the technical indicators like moving averages tend to lag behind the market and fail to spot the end of a trend.

Such technical indicators are referred to as lagging indicators. This lag effect typically causes the trader to respond late to market changes, resulting in lost profit opportunity and risk of increased losses.

VantagePoint’s research team has invented proprietary computer processes which address these limitations and overcome the lag effect through the development of methods, systems, and devices that combine both actual and predicted data derived from the application of neural networks to intermarket data found to be most influential on each specific primary market.

What that means for trend forecasting is that the artificial intelligence in VantagePoint gives traders a jump on the market. This is a priceless technological edge for traders looking to maximize the trend.

Take your trading to the next level with VantagePoint’s predicted moving averages that forecast trends ahead of the market. Request a free demo here.

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Market Forecasting Methods for the New Age of Trading

February 26th, 2015 by VantagePoint Software

Are your Market Forecasting Methods Ready for the New Wave of Trading?

market forecasting trader

As a trader you have probably thought to yourself “How can I get my moving averages to be predictive instead of lagging?” In other words, you’re looking for ways to improve your timing so that you stop leaving profits on the table. The answer could be as simple as reevaluating your current market forecasting methods.

Moving averages can be modified to incorporate intermarket data and even constructed so that they become leading, rather than lagging, indicators. This step ahead in crucial in today’s market forecasting as it gives traders the edge needed to get ahead during times of low confidence or volatility.

This can be accomplished in a number of ways, one of which is through a mathematical tool called “neural networks” that can be used to forecast moving averages based upon both single market and intermarket data.

Through the use of Artificial Intelligence, these neural networks function like a brain to “learn” relationships within and between similar networks to recognize hidden patterns and make predictions about the market with a high percentage of accuracy.

neural networks chart for market forecasting methods

This technology is employed by VantagePoint to generate Predicted Moving Average tools that utilize neural networks and intermarket analysis to smooth out the price trend. This technologically advanced approach turns what has traditionally been a lagging indicator into a leading indicator, a highly accurate predictor of short-term trends.

By obtaining a 1-3 day jump start on a trends direction or price, traders can enter and exit positions with a high degree of accuracy, proven up to 86% with the use of VantagePoint’s patented science. Don’t take our word for it – listen to what these other traders had to say about their experience with the software.

VantagePoint Software Forecast

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