2017: Another Year of Buying Dips and Selling Rips

January 20th, 2017 by VantagePoint Software

 

Buying Dips with VP

This year promises to be, well, a bit wild. Volatility can be expected not just here in the U.S. market, but all over the globe. So when it comes to picking an investing strategy for 2017 “buying dips and selling rips” could prove to be a profitable one.

Already we’ve seen the pound fall, equities slide and gold climbing on concerns U.K. Prime Minister Theresa May is prepared to lead Britain out of the European Union’s single market and act as a guide for other countries that could break from the bloc. At least that’s what President-elect Donald Trump suggests as a possible outcome. Continue reading 2017: Another Year of Buying Dips and Selling Rips

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Five Trading Questions Every Trader Asks (and how we’d answer them)

January 12th, 2017 by VantagePoint Software

Trading Questions

As we ring in another new year it’s important to keep in mind that nothing changes as much as it remains the same. For example, political power has changed, but the themes remain. Republicans will continue to attack the usual topics including the Dodd-Frank regulations that curtail the healthy financial industry. Democrats will continue to attempt to outmaneuver Republicans in an attempt to stop them.

The turbulence from the political battle will no doubt affect the market (another yearly constant) and cause angst for everyone involved. But, more likely than not, the five trading questions we’ve listed below is what’s really going to keep Joe Q. Trader awake at night in 2017. These trite realities will wreak more havoc on you than politics will on the market. At least it will if you don’t learn one simple thing – you can do nothing about the external realities affecting the market. But, you can do much about the internal forces keeping you awake at night. Nothing changes as much as it remains the same. So without further ado, here are five trading questions traders commonly ask and useful mottos to remember when facing your most common trading angst.

5 Common Trading Questions

Did I make the right trade?

Second guessing your trade is useless. If you researched with forecasts that highlight trend changes and set the trade up properly, you have a high-probability trade with a well-defined in and out based on a reasonable profit/loss. Let it ride. Motto: The trade is made, move on.

How could I have been wrong?

Trades go south. Figuring out what went wrong is important. Beating yourself up over it after the fact is not. Learn from those mistakes and protect yourself with the proper tools. VantagePoint provides a clear crossover on its charts indicating trend changes that can be used to improve your timing on entries and exits.  Motto: The trade was made, move on.

Check out this video to see how VantagePoint identifies trend reversals before traditional traders even know what’s going on.

Why did I lose money?

Again, trades go south, which usually means a money loss. But, this is an integral and necessary part of the game. No one wins all the time. The trick is winning more than you lose. See your losses as learning opportunities, nothing more. Utilizing tools like VantagePoint’s Intelliscan will help find trades that are in a better position to move in a given direction. It can also help you identify markets with high volatility that you can avoid until the market becomes more favorable. The goal is to improve your win/loss ratio, not worry about your past losses. Motto: “Fogetta boud it …”

What will the market do tomorrow?

Truthfully, more pundits/analysts get this wrong than right. The market is the collective conscious of millions of humans, so consistently predicting with accuracy the daily behavior is unlikely. VantagePoint’s patented neural networks analyze intermarket relationships and predict market movements with up to 86% accuracy. Utilizing technology will help you sleep at night because it doesn’t have to. Motto: Technology is your friends, let it help you.

Should I even be trading?

For many beginner traders, this question will cause the most sleepless nights. Second guessing your trades, beating yourself up after a poor decision, fretting over losing trades, and betting on what others think the market will do tomorrow will all lead you here. Master the answers to trading questions 1-4 and you are less likely to end up contemplating this question. Something to also keep in mind; trading, like any other skill, takes time to learn. Stay calm and learn from your losses. Utilize the tools available to maximize your potential. Do these things and the answer to question five will more than likely be yes. Motto: Do it right, sleep at night.

Trade confidently with the help of VantagePoint

Don’t leave yourself unprotected and answering these trading questions on your own. Sign up today to receive a free market forecast from VantagePoint and see how VantagePoint can help make 2017 your most profitable year yet!

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Profit From Negative Market Reactions

January 4th, 2017 by VantagePoint Software

Neagitve market reactions to profit from

Here we are, another holiday season coming to an end and another end-of-the-year market with nowhere to go but down. Yes, it’s a gloomy way to look at generally bullish market reactions. The U.S. economy is picking up steam in all the right places – wages, inflation, jobs, manufacturing, and housing. U.S. homebuilders’ confidence soared this month to the highest level in 11 years, reflecting heightened expectations of better sales now and well into 2017.

So, why would the bullish U.S. economy market trends of 2016 turn bearish? Simple, the immediate market reactions to The Fed raising interest rates is wrong, all wrong, and there will be a correction coming. Continue reading Profit From Negative Market Reactions

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Taking Advantage of Sector Rotation in VantagePoint

October 1st, 2015 by VantagePoint Software

sector rotation

Birds of a feather flock together, right? The same can be said for sectors of the market. This phenomenon, commonly known as sector rotation, allows traders to take advantage of economic cycles in which sectors tend to move in the same direction at the same time. By being able to identify sectors that are able to start trending, traders can gain a significant edge in the market.

Watch the video below as we identify the downward trend of the Basic Materials sector as well as some recent swings to the upside in the Healthcare sector.

Profitable trading opportunities exist everyday but traders must know where to look and when to move. With predictive trading software such as VantagePoint – you’ll never miss a beat.

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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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Trend Forecasting to Predict the Next Bubble Burst

April 2nd, 2015 by VantagePoint Software

bubble

The Dotcom bubble in the 1990s, the housing bubble and credit crisis in 2007-2009. Every trader wishes they could have known exactly when these bubbles were going to burst.

Going forward, what trading tools can help predict the next speculative boom and bust?

Bubble Basics

To clarify, an economic bubble (sometimes referred to as a speculative bubble, a market bubble, a price bubble, a financial bubble, a speculative mania or a balloon) is a “trade in high volumes at prices that are considerably at variance with intrinsic values.” It could also be described as a situation in which asset prices appear to be based on implausible or inconsistent views about the future.

Because it is often difficult to observe intrinsic values in real-life markets, bubbles are often conclusively identified only in retrospect, when a sudden drop in prices appears. Such a drop is known as a crash or a bubble burst.

Bubbles go up beyond all sense and come crashing down with violence. Bubbles are invisible to most while they inflate and are not obvious when they collapse. Everyone claims to have seen them after the fact.

Trading Technologies to Predict the Next Bust

So can traders get out before a market collapses? While trying to pick market tops is a fool’s game, there are ways to recognize significant trend changes. VantagePoint’s Predicted Moving Average (PMA) tool combines actual data and forecasted data to give traders a two-day jump on the market.

This can be a huge advantage when a bubble bursts and the markets have a precipitous decline. Think about the violent moves of the NASDAQ in the 1990s.

Don’t become the victim of the next bubble burst.

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