The main products where our trading strategies have been positively beta-tested are Crude Oil, Gold, Bitcoin, and the major FX Pairs – USD/CAD; USD/JPY; GBP/JPY; GBP/USD; EUR/JPY; & EUR/USD.
Sculpting
We invented and perfected a trading practice known as Sculpting, not to be confused with scalping. Scalping is taking advantage of small price movements by opening then closing trades in seconds or at most a few minutes. Sculpting is a skill where trade depends on price movement and can vary from seconds to hours but still termed as day-trading as trades are closed before the end of the trading day. Sculpting is much more surgical and precise and depends on proprietary procedures and the instincts of the trader. These unique methods work in any time zone, giving flexibility to trading.
Candlesticks
Originating in Japan but brought to us by Steve Nison, candlestick charts are one way of looking at price action.
So, what are they?
A candlestick is made up of four prices: a high, a low, an open and a close.
A green candlestick represents a Bullish run, where the closing price was higher than the opening price for a given period.
Whereas a red candlestick represents a Bear run, where the closing price is lower than the open price for a given period.
These candlesticks form patterns that can generate trading signals.
The company reviewed the recommendations and comments by each beta testing trader to translate these into programmable algorithms covering:
when to execute a trade.
how to choose 'Buy' or 'Sell’.
how long to monitor.
when to close each trade.
when to use ‘scalping’
when to use ‘sculpting’
when to use 'trailing stops'.
when to use 'take profit'.
how to react due to geopolitical events.
In addition, how to synchronize a trade on the Master terminal such that it duplicates the trade on all other traders' terminals and enables a one-click closing of all such trades. This means that each trader would have the benefit of a Master trade on his daily results.
Our Key Trading Strategies
An exceptionally large part of Neil’s trading strategies is following his instincts which have proven to be extraordinary.
Key Trading Strategy No 1.
Utilise 50% of opening balance for margin – thus leaving 50% for hedging when necessary but monitor all Trades closely and Hedge only where and when appropriate. Also set your Lot size so that you only have one trade open at a time. Set your stop loss at a maximum of 10% of your margin.
Key Trading Strategy No 3.
Sculpting often brings a stream of Bankable profits. This is essential when trading any volatile product.
Key Trading Strategy No 5.
Keep a close eye on the European Markets opening - typically they set the scene for the US Markets opening later in the day. Do this at 07:45 for the European markets and 08:45 for the UK markets when trading certain Commodities like Crude Oil.
Key Trading Strategy No 7.
Close unprofitable positions quickly (every trader makes judgemental errors) – do not allow them to hurt you. Set your loss level before you open a trade and stick to it. Do not wait for your stop loss to close your trade if you know you made a bad call. Then place a new trade in the opposite direction. This will enable you to get back the loss immediately.
Key Trading Strategy No 9.
Try to leave as few Trades as you can, open, overnight and never on Wednesdays because this is when brokerage firms apply their mid-week swaps. Then before the market closes set your trailing profit and stoploss so that you do not return to a disaster. Alternatively, watch the market opening at 01:00 UK time, then act accordingly. There always is a spike at opening. The spike can go in either direction and can be minor or major.
Key Trading Strategy No 11.
When Buying Crude Oil - Buy Brent
Key Trading Strategy No 13.
Hedge your positions but only if it is wise to do so, taking profit and holding positions until the next price swing in your favor. Doing this, however, will place you in a position where some trades will have to be closed at a loss. However, by monitoring this closely you should still be able to finish your trading day in profit.
Key Trading Strategy No 15.
Have the courage to open a position – bet on your instincts which will sharpen and become enhanced as you continue to work on your two products.
Key Trading Strategy No 17.
Close Trades at the end of your Trading Day, where possible and practicable, even if it means you must take a loss on some trades. Losses are part of your trading day so do not be reluctant to take them when pivotal. The key is to ensure that the profits made beforehand can absorb the losses and still leave you with a profit for that day.
Key Trading Strategy No 19.
Take full advantage of special incentives provided by your Brokerage Platform – for example, the Platform may offer bonus funds to trade with – use them.
Key Trading Strategy No 2.
oncentrate only on one product at a time and become an expert in that product – do not allow the 'white noise' of other products to interfere.
Key Trading Strategy No 4.
Monitor Far Eastern Market Movements first before starting your trading day. This will give you a taste of what is likely to come in the European and US markets.
Key Trading Strategy No 6.
Monitor the impact of the US Market for the first hour of the Trading Day, then jump in as opportunities arise. Pre-Market monitor from 14:00 UK Time, then Market opens at 14:30 UK time when trading Commmodities like Crude Oil.
Key Trading Strategy No 8.
Utilise important indicators like Bollinger Bands, Pivot Point, Oscillators, then follow them to closely to take your profit and consider placing a new position either in the same direction or in the opposite direction, depending on the colour of your candlesticks. Typically, when the colour of the candlestick changes - the change may not hold for at least a further minute - so be wary of this before committing.
Key Trading Strategy No 10.
Do not lose sight of the fact that profitable Trades include both Buy & Sell. It is a misconception that profits can only be made during a Bull market.
Key Trading Strategy No 12.
When selling Crude Oil if sculpting, sell Brent, otherwise sell WTI.
Key Trading Strategy No 14.
React fast to geopolitical events. These can cause immediate spikes for day-traders.
Key Trading Strategy No 16.
Use trailing stops and stop losses when you cannot watch the screen every second. If you must step away that is the time to ensure trailing stops and stop losses are in place. Prices move in milli-seconds and profit-taking opportunities arise instantly and then can dissipate as rapidly.
Key Trading Strategy No 18.
Aim for a loss rate of less than 10% of trades. For example, one from every ten trades.
Key Trading Strategy No 20.
Set yourself goals like profit percentages and profits per day. For example, if your fund is $500,000 then aim for $25,000 profit as your minimum. Target a monthly profit of 100%.
Our Trading Tools
Automated Trading
Under Automated Trading, we benefit from superior execution and pricing along with our overall Strategies, thus enabling a strategy to fit around our requirements. Trades are executed automatically. With this, we can then set up the rules desired for the Automated Trading system to follow. These are based on standard variables like Price and Volume or Technical Indicators like Moving Averages or Bollinger Bands or others.
Bollinger Bands
Bollinger Bands, invented by American financial analyst John Bollinger, are one of the most popular indicators around.
Bollinger Bands are a popular technical Indicator used by us. There are several uses for Bollinger Bands. These include determining ‘overbought’ and ‘oversold’ levels, as a Trend Following Tool, and monitoring for breakouts.
Bollinger bands are composed of three lines. The indicator consists of three lines: the lower band, the middle band, and the upper band. One of the more basic calculations of Bollinger Bands uses a 20-day simple moving average (SMA) for the middle Band. The upper Band is calculated by taking the middle Band and adding twice the daily standard deviation to that amount. The lower Band is calculated by taking the middle band minus two times the daily standard deviation.
Bollinger Bands can indicate trading breakouts when the upper and lower bands begin to converge. This means the price could be heading for a big movement in either direction.
Day Trading
A Day-Trader is a Speculator in Securities, explicitly buying and selling Financial Instruments within the same trading day, such that Positions are Closed before the Market closes for the Trading Day.
Traders who Trade in this capacity with the motive of Profit are therefore Speculators, in contrast with the long-term trades underlying buy and hold and value investing strategies. Day-Traders normally exit Positions before the Market close to avoid unmanageable risks - negative Price gaps between one day's close and the next day's price at the open.
Rarely, a Trade may over-run the close of the business day, but ordinarily, Trades are Closed before the Trading Day ends.
Moneyflow Index
The Money Flow Index (MFI) is a momentum indicator that measures the flow of money into and out of a security over a specified period. It is related to the Relative Strength Index (RSI) but incorporates volume, whereas the RSI only considers the Price.
The MFI is calculated by accumulating positive and negative Money Flow values, then creating a Money Ratio. The Money Ratio is normalized into the MFI oscillator form.
We use this Indicator where and when appropriate.
RSI
The Relative Strength Index (RSI) is a technical indicator used in the analysis of financial markets. It is intended to chart the current and historical strength or weakness of a stock or market based on the closing prices of a recent trading period. The indicator should not be confused with relative strength.
The RSI is classified as a momentum oscillator, measuring the velocity and magnitude of directional price movements.
Momentum is the rate of the rise or fall in price. The RSI computes momentum as the ratio of higher closes to lower closes. Such, too, has its value in considering taking Positions in Crude Oil, so we use the RSI where and when appropriate.
Sculpting
We use a trading practice known as Sculpting, not to be confused with scalping. Scalping is taking advantage of small price movements by opening then closing trades in seconds or at most a few minutes. Sculpting is a skill where trade depends on price movement and can vary from seconds to hours but still termed as day-trading as trades are closed before the end of the trading day. Sculpting is much more surgical and precise and depends on proprietary procedures and the instincts of the trader. These unique methods work in any time zone, giving flexibility to trading.
Trailing Stops
A Trailing Stop order is a specific type of ‘Stop-Loss’ that automatically follows the Position if the Market rises, securing a Profit, but it will remain in place if the Market falls – Closing out the Position if the Market moves against the trader.
A Trailing Stop Order does not set the Stop Level at a specific price, but at a certain distance away from the current Market price. It would be placed below the current Market price if we are opening a 'BUY' Trade, and above the current Market price if we are opening a 'SELL' Trade.
A Trailing Stop is set at a percentage level or a certain number of points away from the Market price – this distance is the Trailing Stop – and the Stop will move to maintain that distance from the current price.
Set your trailing stop at 25 points then when the trade 'lights up' change this to 6 points to preserve maximum profitability.
Our style is to place a ‘Trailing Stop’ after the trade has been placed. The difference between these is that a ‘Trailing Stop’ comes into effect once the position reaches the level of points set in the ‘Trailing Stop’. Thereafter, the Stop follows the trade and as it increases the profitability of that trade the stop follows by the number of points set. When a reversal occurs the ‘Trailing Stop’ cuts in and stops the trade preserving the profits earned to the number of points lodged which continuously follows the price. As a result, if the price is working for you the amount of reserved profit increases.
Force Open
Force Open enables the Trader to maintain his exposure to a Market while Opening a New Position in the same Market, which can be a useful tool for hedging.
Without the Force Open function, most platforms will net off the Trader’s Positions. In a netted off Trade, automatically a current Position is Closed if the new Position would cancel it out (unless a Stop or a limit is in place, in which case it will keep both Positions Open). Placing two Trades of the same value using the Force Open function will create a net exposure of zero – the same as having no open Positions.
We always use Force Open where and when appropriate and prudent to do so.
High-frequency Trading
High-Frequency Trading (or HFT) is a form of Advanced Trading that processes high numbers of Trades very quickly using powerful computing technology. It can be used to either find the Best Price for a single large order or to find opportunities for Profit in the Market in real-time.
The algorithms behind High-Frequency Trading tend to be extremely complex, allowing the program to Trade across several Markets at once as conditions permit. However, in our case, the algorithms are not complicated, so we use HFT where and when appropriate and prudent.
Leverage
Leverage is a concept that can enable the Trader to multiply his exposure to a financial Market without committing extra investment capital.
In investing, the amount needed to open and maintain a Leveraged Trade is called the Margin. Trading using Leverage is Margin Trading. Leverage is available on several financial products, including CFD's. When Trading using Leverage, the Trading Platform will only ask us for a fraction of the total value of the Positions: the rest is effectively loaned to the speculator by them.
The Leverage offered to Professional Traders is 1:100.
Oscillators
An Oscillator is a technical analysis tool. A technical analyst bands an Oscillator between two extreme values and then builds a trend Indicator with the results.
The analysts then use the trend Indicator to discover short-term ‘Overbought’ or ‘Oversold’ conditions. When the value of the Oscillator approaches the extreme upper value, analysts interpret that information to mean that the asset is ‘Overbought’, and as it approaches the lower extreme, analysts consider the asset to be ‘Oversold’.
We use this Technical Analysis Tool where and when appropriate.
Scalping
Some Day-Traders use an intra-day technique known as Scalping that usually has the Trader holding a Position for a few minutes or only seconds. A Scalp in Trading is the act of opening and then Closing a Position very quickly, in the hope of Profiting from small-Price movements.
Traders who practice this tactic are referred to as Scalpers and tend to make many Scalps each day.
Spread Betting
Spread-Betting is a form of derivatives Trading that allows the Trader to take a position on whether he thinks a Market will rise or fall, without having to buy the underlying asset. Importantly, Spread-Betting is a Leveraged transaction which means the Trader only puts down a small deposit for much larger Market exposure. Retail traders often use spread=betting whereas professional traders use CFD's.
Using Leverage means there are significant benefits and risks: the investment capital can go further, but the Trader can also lose more than its initial deposit. Spread-Betting is flexible as it is possible to take short positions as well as long Positions in all Markets.
White Noise
White Noise is the mass of material affecting a Market that is not relevant to the specific Market of interest to the Trader – the Market where the Trader specialises.
White Noise can and does often act as a distraction and is counter-productive to the Trader’s objectives and goals. For this reason, we rely on our inherent ability to separate White Noise from our key decisions on Trading, thus avoiding undesirable distraction and its unwelcome consequences.