Stop orders are essential to staying solvent as a trader. If you don't use a stop loss, for the most part, you are gambling. However, there is an exception to this rule. This trading method will not work for most traders as it involves the hardest task of any trader, and that is doing nothing. Yes, doing nothing is the hardest thing for any trader. If you can do nothing, you can sell a top and buy a bottom.
Being a good trader is difficult as it goes against a core belief that was instilled in us since a young child. The belief that hard work will result in a better pay. If you spend time learning the market and trading every day, then one day you'll be rich, seems like common sense right? Trading rewards those who for the most part, do nothing. Do you have what it takes to do nothing?
The best moves you can make in up-trending markets only present themselves as opportunities once every 1-3 years. Sitting on your hands until these opportunities arise is a very difficult task.
Above is a chart for SPY, Bitcoin, and Apple. These are 3 examples of assets that many people fanatically believe will continue to grow despite their bubble like appearance.
To trade without a stop loss, you have to have a true belief in the asset. You have to believe that one day this asset will be much higher than it currently is now. In other words, you are willing to invest long term into the asset.
If you wish to maximize your gains on these assets, you can trade them without a stop loss. If you were planning on holding them anyway, then why not buy at a potential bottom and hold until the price is extended?
To do this, I recommend using only two indicators, the 200 week moving average (blue) and the 400 week moving average (orange). These are common areas where institutions buy the dip when there is immense selling pressure. Blood in the streets, maximum fear, true capitulation. Remember, the news for the asset will be absolutely horrid during this time. You will question why you are even buying it, and if you ask anyone for their opinion, they'll call you an idiot for buying it and recommend that you wait. In up-trending assets, it's not good news that causes the asset to reverse and go back up, it's simply bad news turning into less bad news, but make no mistake, the news will still be very bad and you WILL question yourself. You will be tempted to take profits early as you will have fear that price will drop again since it's so bearish.
Once you're in your long position, you can choose to hold until price reaches the upper trendline which will appear on a weekly or monthly chart (just connect the tops), OR you can trade all of the bullish moves in the middle without a stop loss. To trade all of the moves in the middle, look for bullish patterns that appear on the daily or hourly time frames. A pattern must span at least 4 days of price action. When the price of the asset reaches the top of the pattern, sell, when it reaches the bottom, buy. If you buy at the bottom of the pattern and the price falls below it, you hold. You were planning on holding the asset anyway and you believe that the price will one day return to the upper trendline, so in this event you just wait for the price to come back up. Once the price comes back up and reaches the top of the pattern that appears on the hourly or daily time frame, you sell again and wait for a dip. If it breaks to the top of the pattern, you buy again on the retest. If the retest fails, hold. It might just be a fakeout, if it's not, remember you were planning on holding the asset anyway and you believe one day the price will be much higher.
If the price drops below the 400 week moving average or the 200 week moving average (your choice as to which one) you can then take your stop an enter the market again if the price goes above. For bullish up-trending assets, the price generally does not stay below the 200 or 400 week very long. If the price happens to stay below, then just wait and do nothing until it goes above. It may take weeks, months. In the mean time, find another asset you believe in and apply the same strategy there.
This method will allow you to make money on a majority of the moves that happen in the middle without the normal fear of a stop loss being hit. I've personally found that it's much easier to trade this way and is very profitable.
See my related idea below as to how I was able to sell the very top of SPY using this same method. Also see my other idea on how I was able to buy the exact bottom of Apple to the cent. It's not rocket science, it just takes a level of patience that most people do not have. If you believe you can do nothing and make a ton of money, then this method may be worth trying.
Thanks for reading! If this helped you in any way please give me an upvote and follow. It'll encourage me to add more content :) Happy trading.
Being a good trader is difficult as it goes against a core belief that was instilled in us since a young child. The belief that hard work will result in a better pay. If you spend time learning the market and trading every day, then one day you'll be rich, seems like common sense right? Trading rewards those who for the most part, do nothing. Do you have what it takes to do nothing?
The best moves you can make in up-trending markets only present themselves as opportunities once every 1-3 years. Sitting on your hands until these opportunities arise is a very difficult task.
Above is a chart for SPY, Bitcoin, and Apple. These are 3 examples of assets that many people fanatically believe will continue to grow despite their bubble like appearance.
To trade without a stop loss, you have to have a true belief in the asset. You have to believe that one day this asset will be much higher than it currently is now. In other words, you are willing to invest long term into the asset.
If you wish to maximize your gains on these assets, you can trade them without a stop loss. If you were planning on holding them anyway, then why not buy at a potential bottom and hold until the price is extended?
To do this, I recommend using only two indicators, the 200 week moving average (blue) and the 400 week moving average (orange). These are common areas where institutions buy the dip when there is immense selling pressure. Blood in the streets, maximum fear, true capitulation. Remember, the news for the asset will be absolutely horrid during this time. You will question why you are even buying it, and if you ask anyone for their opinion, they'll call you an idiot for buying it and recommend that you wait. In up-trending assets, it's not good news that causes the asset to reverse and go back up, it's simply bad news turning into less bad news, but make no mistake, the news will still be very bad and you WILL question yourself. You will be tempted to take profits early as you will have fear that price will drop again since it's so bearish.
Once you're in your long position, you can choose to hold until price reaches the upper trendline which will appear on a weekly or monthly chart (just connect the tops), OR you can trade all of the bullish moves in the middle without a stop loss. To trade all of the moves in the middle, look for bullish patterns that appear on the daily or hourly time frames. A pattern must span at least 4 days of price action. When the price of the asset reaches the top of the pattern, sell, when it reaches the bottom, buy. If you buy at the bottom of the pattern and the price falls below it, you hold. You were planning on holding the asset anyway and you believe that the price will one day return to the upper trendline, so in this event you just wait for the price to come back up. Once the price comes back up and reaches the top of the pattern that appears on the hourly or daily time frame, you sell again and wait for a dip. If it breaks to the top of the pattern, you buy again on the retest. If the retest fails, hold. It might just be a fakeout, if it's not, remember you were planning on holding the asset anyway and you believe one day the price will be much higher.
If the price drops below the 400 week moving average or the 200 week moving average (your choice as to which one) you can then take your stop an enter the market again if the price goes above. For bullish up-trending assets, the price generally does not stay below the 200 or 400 week very long. If the price happens to stay below, then just wait and do nothing until it goes above. It may take weeks, months. In the mean time, find another asset you believe in and apply the same strategy there.
This method will allow you to make money on a majority of the moves that happen in the middle without the normal fear of a stop loss being hit. I've personally found that it's much easier to trade this way and is very profitable.
See my related idea below as to how I was able to sell the very top of SPY using this same method. Also see my other idea on how I was able to buy the exact bottom of Apple to the cent. It's not rocket science, it just takes a level of patience that most people do not have. If you believe you can do nothing and make a ton of money, then this method may be worth trying.
Thanks for reading! If this helped you in any way please give me an upvote and follow. It'll encourage me to add more content :) Happy trading.
My goal is to find the best risk:reward setups. For instance, if you risk $1,000 at a chance to make $5,000, you can afford to be wrong 4 out of 5 times and still not lose money. I hit my targets over 50% of the time.
