Stocks, ETFs, Options, Commodities & Currencies

Silver, Gold & Miners About To Sell Off Again

A couple weeks ago I posted these same charts talking about the pending breakout (in either direction) with silver, gold and mining stocks. Fast forwarding to this week its clear this sector continues its struggle to rally. Key support levels are now being tested and if these levels fail prepare for a sharp correction with mining stocks showing the most downside potential of roughly 25% for the GDX ETF trading fund.
Let’s take a quick look at what is going on.

Gold Trading Chart:

The chart of gold shows price being wedge into the apex of the down sloping resistance trend line and the rising support trendline. Gold was trading below this level but has since bounced. But if gold closes the week below this line in the sand the price could start to fall quickly and test the $1200 per ounce within a week or two.



Silver Trading Chart:

Silver is under performing gold and trading below its support level currently. If silver does not recover by Friday’s closing bell then things could get ugly for a few weeks as investors start to exit their positions. That being said, I need to point out that silver is more of a wild card when using trend lines like this. Both gold and gold miners should be confirming this breakdown in silver if it is the real deal.



Gold Mining Stocks ETF:

The chart of gold miners I like the most. I like it because it’s pointing to lower prices, roughly 25% lower if the breakdown takes place. Gold mining stocks could be a fantastic long term investment if we see the $17.50 level reached on this GDX etf.




See more here.

We all know quantitative easing devalues the Dollar but contrary to that general statement it looks as though we could see the dollar index continue to rise for a few more weeks.

If we analyze the chart of the Dollar ETF (UUP) it is clear that the short term momentum has turned up. The break above the down trend line and recent bounce off support bodes well for the dollar index.
The bull flag chart pattern that has formed in the past month has a measured move price target of roughly $22.30. The level also happens to be a key pivot point on the chart along with high volume resistance.
I expect the dollar to continue to work its way higher over the next week or two with $22.30 being the line in the sand where sellers will jump on price and drive it back down, or at minimum force price to consolidate for a few days.

US Dollar ETF Trading Strategy – Daily Chart Analysis




See more here.

Pre Algorithmic Trading System Analysis: This week has been a little wild as stocks pulled back due to headline news. The two big drops which took place on heavy volume sent market participants into an emotional state liquidating their long positions on fear of a collapse. Even though the stock market shows no sign of the trend reversing down, traders are jumpy and quick to lock in gains with any negative new. Sounds like a “Wall Of Worry” to me.

Taking a look at the ES mini futures chart below which is a ten minute intraday chart. It is clear the recent pop in price is testing high volume resistance as seen on the chart with the blue horizontal bars.
Also the previous pivot highs and consolidations on the chart highlighted in red also confirms there is price resistance at this level. Thursday’s rally is likely ready for a little pullback or sideways consolidation at this point based on this information.



If we take a look at the Barchart Market Momentum index which is something I follow closely because it tells me when stocks have moved to far too fast in either direction. In simple terms, the market is either overbought or oversold when this chart reaches either extreme.

When the market closes with this indicator in the overbought or oversold zone, you should expect a pause or 1-3 day reversal in the opposite direction.

But keep in mind, when the trend is up, the only high probability zone to focus on is the oversold. We want to buy dips within an uptrend, and take partial profits or tighten our stops when the stock market is over extended to the upside. This is exactly what members and myself did today, locked in some profits and tightened our stops, well my Algorithmic Trading System told us to do it…


Logical Market Analysis Combined with Automated Algorithmic Trading System

Reviewing the charts for high volume resistance levels, previous pivot highs and lows, and a close eye on the Barchart momentum index like we just did in this report is only the tip of the iceberg when it comes to complete market analysis.

There are many other things one should analyze for precision market timing of the broad market. The stock market has several different forces at play which move price and using a type of analysis which I call INNER-Market Analysis allows us to capture all the market moving forces within one indicator. This February when my book is published on INNER-Market Analysis and algorithmic trading systems all this information will be available if you would like to learn more.

Some other areas of the market which must be analyzed are trends, active cycles, volatility, volume flows, and market sentiment to name a few.

Over the years I have been converting the way I analyze the market into an algorithmic trading system that catches each overbought and oversold market condition on specific chart timeframes. I have also implemented position and money management rules for the algorithm to trade in my brokerage account completely hands free which I must admit is the coolest feeling thing to experience.

What is an algorithmic trading system?



A trading algorithm is nothing more than a bunch of rules which you create (your trading strategy) converted into a computer language so a financial charting platform can run your trading strategy automatically. Everything is done for you including the trading. The only thing the system creator needs to do is monitor the algorithmic trading system for technical issues and possible tweaks here and there.

Take a look at the 30 minute algorithmic trading results

Since Oct 30^th the S&P500 index has been chopping around and shaking traders out of their long and short positions with intraday price whipsaws (nominal new highs and lows which runs the stops of the average market participant). The index is only risen by 1.2% in the last 23 days while my algorithmic trading system which trades the S&P 500 index futures (ES Mini) and/or (3x Leveraged ETFs UPRO & SPXU) has been pulling money out of the market at an incredible rate.


Conclusion About Using an Algorithmic Trading System:

Trading or investing for that matter is no easy task. And I know firsthand that even if one has a proven winning strategy it’s almost impossible follow the rules and catch every trade setup generated. I do not know how many times I see perfect setups about to unfold and then miss them because I was reviewing other charts, sending an email, going to the washroom or grabbing a bite to eat.

These missed opportunities along with a few other reasons I will explain in my next post, is what got me started programming my trading strategies to do exactly what I showed you here.
I will admit, it has been a major learning process, ridiculously expensive to create and I can safely say that I now know several of the main stream programmers available. I also know who can make miracles happen and who cannot.

This post is to share with you some new and exciting things unfolding based around my index trading strategy. Over the next week I will share my story of how algorithmic trading became my focus, passion and automated income stream and how you can do it also.

Chris Vermeulen

See more here.

Precious Metals ETF Trading: It’s been a week since my last gold & silver report which I took a lot of heat because of my bearish outlook. Friday’s closing price has this sector trading precariously close to a major sell off if it’s not already started.
On a percentage bases I feel precious metals mining stocks as whole will be selling at a sharp discount in another week or three. ETF funds like the GDX, GDXJ and SIL have the most downside potential. The amount of emails I received from followers of those who have been buying more precious metals and gold stocks as price continues to fall was mind blowing.
If precious metals continue to fall on Monday and Tuesday of this week selling volume should spike as protective stops will be getting run and the individuals who are underwater with a large percentage of their portfolio in the precious metals sector could start getting margin calls and cause another washout, spike low similar to what we saw in 2008.

ETF Trading Charts:

Below are updated with Friday’s closing prices showing technical breakdowns across the board..



Sweet & Sour ETF Trading Analysis:

Just to make things a little more interesting I would like to point out a couple other types of analysis.



Sweet: Through analysis of the CEF Central Fund of Canada Ltd. chart and evaluation it is clear precious metals are falling out of favor at an increased rate. This fund owns physical gold and silver bullion and investors are fleeing the fund so fast that it is now trading at a 7% discount of its asset value. While this may not seem good for metals I see it as a positive.

When everyone is running for one door after an extended moves has already taken place it tends to act as a contrarian indicator. Knowing that some of the largest percent moves in a trend takes place before reversing, I see this information as an early warning that a bottom will soon be put in place.

Sour: While the USD index has not been much help compared to 2012, I feel as though a rising dollar is likely to unfold for a couple weeks which may lend a hand to pulling the precious metals sector down.



Precious Metals ETF Trading Conclusion:

While I am starting to get bullish for a long term investment in precious metals I know that a bottom has likely not yet been made. But even if it has been, it is better to buy during a basing pattern or breakout to the upside from a basing pattern than to be underwater with a position for an extended period of time along with all the other negatives that come along with it.

I do like the idea of CEF as a long term investment when I feel the time is right. I have invested and traded it many times in the past. The key to trading the fund is to be sure you are buying it at fair value or a discount from the net asset value. You do not want to be buying it when it is trading at a 5-7% premium. The fund owns both gold and silver making it a simple diversified precious metals play.

See more here.

The fundamental backdrop behind the ramp higher in equity prices in 2013 is far from inspiring. However, fundamentals do not matter when the Federal Reserve is flooding U.S. financial markets with an ocean of freshly printed fiat dollars.

As we approach the holiday season, retail stores are usually in a position of strength. However, this year holiday sales are expected to be lower than the previous year based on analysts commentary and surveys that have been completed. This holiday season analysts are not expecting strong sales growth. However, in light of all of this U.S. stocks continue to move higher.

Earnings growth, sales growth, or strong management are irrelevant in determining price action in today’s stock market. In fact, the entire business cycle has been replaced with the quantitative easing and a Federal Reserve that is inflating two massive bubbles simultaneously.

Through artificially low interest rates largely resulting from bond buying, the Federal Reserve has created a bubble in Treasury bonds. In addition to the Treasury bubble, we are seeing wild price action in equity markets as hot money flows seek a higher return. Usually fundamentals such as earnings, earnings estimates, and profitability drive stock prices. However, as can be seen below the U.S. stock market is being driven by something totally different.



The chart above is beginning to illustrate that fundamentals are becoming irrelevant. The only thing that matters in today’s marketplace is the flow of fresh liquidity out of the Federal Reserve and into the banking system. This process helps to fuel more risk taking and pushes longer-term investors away as hot, speculative money flows into high risk assets.

The chart below, which came from Thomson I/B/E/S demonstrates that the future outlook is clearly not any better.


As can be seen above, over 90% of the S&P 500 companies have already reported negative 4^th quarter 2013 pre-announcements. Essentially, these companies are warning equity investors that earnings expectations are going to be lower than expected.

Normally this would be seen as a headwind for equity prices particularly because the ratio is the worst on record. However, equity prices have rallied straight through the dismal earnings data.

In addition to earnings, global leading indicator analysis from Goldman Sachs is also issuing warning signals. The Global Leading Indicator Swirlogram is showing decisively that global leading indicators are slowing down and are moving toward possible contraction presently.


On top of consistently lowered earnings estimates and forward guidance in S&P 500 companies at the worst levels on record, we are seeing evidence that would suggest the global economy is slowing down. In light of this information, how can risk assets be rallying?

The weekly chart of the S&P 500 Cash Index (SPX) going back to the beginning of 2012 tells a rather compelling story. The S&P 500 Index in that period of time has rallied by more than 43% as shown below.


However, readers should note that the past 6 – 8 weeks have seen prices move higher. In fact, the last time the S&P 500 Index had 7 consecutive weeks of higher prices was back in 2007. In light of the negative fundamental data, this is the price action we are witnessing in real time.

How can anyone realistically purchase risk assets here? I realize that prices could go higher and likely will go higher if the Federal Reserve continues to accommodate the U.S. capital markets.

However, as prices move higher and bears continually get run over at some point a correction or possibly worse could be initiated. Clearly a bubble has formed in Treasuries, but if this type of price action continues a bubble will form in equities as well. Several famous financial pundits are already beginning to discuss this very real possibility.
Financial pundits and asset managers are beginning to come forward to discuss their views that equities are at full value and are forming a possible asset bubble. Famous investors and portfolio managers like Larry Fink and Carl Icahn have stated recently that they believe the U.S. equity market is moving into dangerous territory where large corrections could loom in the future.

Furthermore, in a recent interview with Fox News, renowned economist and political pundit David Stockman made the following statements:

“This is the fourth bubble the Fed has created through easy money and printing press expansion.”
“The Fed has taken itself hostage.”

“This is a destructive poisonous monetary medicine that is being put into the system that is distorting all kinds of economic mechanisms with mal-investments on a massive scale.”

Stockman concludes that “its like 2007 – 2008 all over again.” Whether the bubble exists in the Treasury market or in U.S. equities is hard to say. In fact, we maybe witnessing bubbles in both asset classes and history says the endgame will likely end badly.

I want to be clear that many times bubbles are viewed in hindsight and we may be months or even years from the top. What I do know is that the Federal Reserve has a horrible track record. They have reduced the U.S. Dollar’s purchasing power incredibly since their inception. Additionally they have always reduced economic stimulus too late and inflation has ravaged markets historically.

While I do not know when the bubbles will burst, what is known is that recently the mere mention of a possible tapering of the Fed’s Quantitative Easing program sent U.S. stocks considerably lower.

All eyes are on the Fed and when they finally taper, they will find out that they are trapped. While prices may continue higher for months or years in the future, history suggests the endgame will be ugly for those who chased the speculative bubbles.

In closing, I will leave you with a quote from a recent interview with legendary investor Jim Rogers, “The Fed will self-destruct, before the politicians realize what is going on.”

See more here.

How to turn your trading into a simple automated trading strategy: you know the difference among a winning and losing trade – we have all experienced both and know the excitement and the frustration associated with it.

The brutal honest truth is a tough pill to swallow. The fact that most of the time it’s not the strategy that has failed; it’s you (the trader) which is why you need a simple trading strategy drawn out on paper with detailed rules for you to follow.

In today’s report I am going to talk about how you can stop losing money and become a successful trader. We all know that before you even enter a position, you must know where you place your stop-loss order.*If you don’t know where you stops are to be placed then you are trading with a major disadvantage.
Your position entry is not complete without having a stop price figured out. It blows my mind why so few investors use stop-losses. If you are guilty of not using stops, you need this information. It might be the difference between retiring on time with a big nest egg or retiring later and still just churning your account.
If you plan and place stops you are planning to win, but prepare to take losses because you will get stopped out and you will have to get back up, brush yourself off and trade another day. So with that said we need to look at the psychology around taking losses because it’s not easy to manage, and is the main reason individuals do not use stops. Being proved you were wrong flat out SUCKS!

Successful traders understand they must know where they are going to be stopped out before they enter a position. They have to know ahead of time what a wrong trade looks like so they can exit it quickly. This is a rudimentary fundamental that EVERY trader knows the answer for.

Do You Have A Trading Strategy That You Can Trade Like a Robot?

Can You Answer The Following Questions?

1. How do you know when to sit tight or cut your losses?
2. Do you have rules to tell you when to sell a losing position?
3. Do you have rules of when to move your stop to breakeven?

If you cannot answer these questions properly, you are not alone. And what it means is that you need to establish some rules for yourself. All the trading rules in the world are meaningless if you do not use them. That is why I am telling about what’s really going on with you when you refuse to manage your risk in a proactive and professional way.

Most traders refuse to take a loss for two basic reasons:

1. They cannot admit they are wrong.
For most traders, this is just too painful to admit. It’s interpreted as failure or feeds a persistent, negative self-image which none of us enjoy feeling.
Humans by nature prefer to remain in denial instead of acknowledging their losses are causing them pain. This type of trader often has to lose it all before he begins to change (or gives up trading).*I know this very well. I lost it all twice when learning to trade. It was not until the second time that I hit rock bottom (financially and emotionally) that I embraced trading rules and hired a mentor to help keep me inline with my trades.

2. The loss is too big relative to their overall portfolio size so they can’t afford take the loss.*
Know this, there’s no such thing as just a paper loss. The investment (stocks, etf, options or futures contract) is worth what it’s quoted whether you realize it or not by closing the position.
Both of these examples are a form of self-delusion that millions of investors, both large and small, suffer from.
If what I am saying here is making you uncomfortable or bringing up feelings of anger or powerlessness, then that is a good sign. It means you have enough common sense and self-awareness to change what you are doing.

Example of How You Can Make Your Trading Strategy To Be More Automated:



A successful trader uses a different strategy from that of a losing trader (you) by looking at the pain from the loss in an impersonal way. They know the loss as a sign that something went wrong with their approach, or their execution, but NOT that something is wrong with them.

Winning traders separate who they are from what they do. They learn and know, that their trading losses lie in their approach to trading the market and not a reflection of whom they are as a person. The pain they feel is quickly transmuted into motivation, which fuels their desire and determination to become a better trader through refining their trading strategies to better navigate the financial market place.
Both are learned responses and within your control. The opportunity for growth from the pain of our losses are the same. It’s what we do with this emotional pain of a loss that matters, not the loss itself.
Chris Vermeulen
See more here.

Good Morning,
I just want to touch on two things… the market and my new charting with*NinjaTrader
Today’s video covers the SP500 in a little more detail along with natural gas and precious metals.
It is a big day for the financial sector (banking stocks) and if they turn around and rally expect the SP500 to post some solid gains.

Precious metals may keep selling off. Trend is still firmly down.
Natural Gas is looking lofty… I am starting to drool over a short play or inverse ETF play for that. I am keeping my eye on it.

Financials are on fire this morning, they did gap lower but have posted some big gains this morning. Anyone who got long in the past three days with me should be at breakeven or in the money now. Let’s hop this is a key pivot low and prices rally/grind higher into the holiday season/year end.

Below is a daily chart of the SP500 index using the*NinjaTrader platform. Over the last few months as you likely know, we have been completing our fully automated SP500 trading system so that it will be available to our followers. Over the next month we will be phasing all our charting analysis, tools, indicators and systems to run on the NinjaTrader platform. Reason? because*NinjaTrader*Rocks! and supports all our custom indicators and*automated trading systems*much better than what we are using now.
Anyways, back to the chart below… As you can see there is potential for the SP500 to pullback several percentage points. As long as it stays above our blue support line and short term high volume zone we will remain long the market adding on dips.



NinjaTrader Platform for Automated Trading Systems & Charting
Talk soon,
Chris Vermeulen
NinjaTrader Partner

See more here.

When it comes to becoming a successful investor or your, automated trading system development process*for that matter, there are some big picture things that you must have figured out.*Here are some tips that will help you get started in becoming a long term consistent and profitable trader, investor or automated trading system developer.

Having A Master Plan

I’m not talking about a detailed trading plan, but a plan on what strategy or automated system you want to develop over the next 3-6 months. For example, you might have a goal to develop two trading strategies over the next 6 months. One strategy for uptrends and the other for downtrends.
Making money in both market conditions is crucial for long term success and these two strategies you should be focus. All your strategy development should be focused on reaching these two primary goals.
This master plan does not*necessarily*need to be detailed. It is simply your reminder*to keep you focused and on the right path. You should probably review your master plan on a*weekly bases. For more information on why having a master plan and treating trading as a business is important see Brian’s course which I took myself also…

Trading As Your Business.
The Trading System Development Step-By-Step Process

If you’re like most people you are developing your trading strategies and automated trading systems without following a well-defined process and understand the steps and order things need to be executed for trading system mastery. If this is you, then you need to focus and figure this process out before doing anything else. You are probably missing*trading opportunities, wasting time and spinning your wheels wondering*why you are not seeing progress. I’m going to give you a recommendation that can really boost your effectiveness as a strategy or automated system developer.


You must create a process on how you build and test your trading strategy. Your system development process should explain how to test and what to test. It should describe the order and flow of your development process along with check-lists on what types of orders should be used for stops, targets and exits.
Using a documented system development process will provide structure and discipline so you can get your trading system built, tested and making your money in a much shorter period with less frustration.

In short, it will do wonders for your system development process. “Trading System Mastery – by Brian McAboy” is a fantastic starting point on building your own trading strategies and automated trading systems. I took his course a few years ago to help refine my trading goals, rules, and automated trading system blue prints for my programmers. Brian and I now talk weekly and are good friends.

I’m also working on explaining this development process in more detail. When I finish I will send you an update.

Don’t Get Distracted, Have Laser Beam Focus

Distractions and procrastination is a big problem for many of us. We get*distracted*from what we are doing very easily. Anytime you find yourself starting to wander from your task of building, testing and running your first system, ask yourself if what you are doing is getting you closer to your goal.
Don’t start chasing every new trading idea, concept or indicator you read about, I know… It’s easy to do and exciting but DON’T! Do what I do, make a detailed note with all the thoughts you have on that idea so you know that when you finish with your first system, you can go back, review your notes and look deeper into that idea you had. Trust me, this will do wonders to your progress and mind frame.
There is no better feeling than seeing progress on a trading system and knowing you have 5 -10 other great ideas on paper to work on next… The sky is the limit, but focus on one idea/strategy at a time.

There Is No Get Rich Quick Trading System – Not many…

We all know there is no consistent get rich quick trading system, but there are some that can make you wealthy within a year if the stars align and you are extremely aggressive. What I am referring to are the futures compounding strategies some of the lucky traders were blessed with.
Yes there are some traders out there who actually turned $10K or $50K into $1, $2, or $4,000,000 within a 12 or 18 months. But they are few and far between. This type of trading requires 100% risk capital and you more or less win huge or lose it all, although I am working on a very exciting project now on how to do this with very little downside risk using one of my intraday futures trading systems. I will update on this in a few weeks once I have more solid numbers.
Anyway, back to NOT getting rich quick…
You need to expect the journey to financial freedom to be painful at times but if you follow your proven systems your success can be consistent and that is what is important. You will make mistakes and the markets will humble you at times. There are no free lunches and you will work for a strong return on your investment.

Money Management – Manage it or Lose

Once you have a solid performing trading system, you will need to start learning and testing out the best way to manage positions. This is also known as money management. Doing so can really leverage your system or simply be the difference between it making money or not. I recommend read a book or watching videos on money management on how to scale in and out of positions as that is the key to success I think.

Don’t Wait Until It’s Perfect

Perfection does not exist with any trading system. The financial markets are always evolving and you will have losing streaks and winning streaks. Just make sure the system is working correctly. Test it in simulation mode and start trading it with small amounts of money. You are system will never be perfect and it does not need to be perfect in order to make money.

Do Not Ever Fool Yourself – Fudging the Numbers is a NO NO

Do not attempt to fudge numbers while testing your trading system. Be honest in your backtesting reports and manually review all backtested trades for completeness and accuracy. General rule of thumb… double your commission costs, and factor in 25% slippage. This may sound crazy but you will be amazed at just how accurate these numbers will be with your real-time results with real money.

If your automated trading system does not post gains with commission fees and a 25% slippage, then continue to improve your trading strategies. Set Goals, Reach, Repeat… and nothing less…
Talk soon,
Chris Vermeulen

See more here.

Tis the Season for the most powerful seasonality trade of the year!



With the stock market up big in 2013 and most participants are speculating on a pullback in the next week or two, I have to say I am on the other side of that bet. Being a technical trader I focus on patterns, statistics and probabilities to power my ETF trading strategies. So with 37 years of stats the seasonality chart of the S&P 500 index paints a clear picture of what is likely to happen in December.
If you do not know how to read a seasonality chart, I will explain as its very simple. The simply shows what the index has done on average through each month over the past 37 years. December typically has the strongest up trend and probability of happening any other time of the year.

The Big Board – NYSE

The NYSE also referred to as the Big Board, is an index with the largest brand name companies. Most individuals do not follow this, but to me its as close to the holy grail of trading than anything else I know. I use many different data points from this index (momentum, order flow, trend) for my ETF trading strategies.
You must follow the trend of this index if you want to be on the right side of the market. While I follow and track the New York Stock Exchange closely and it has its own fund NYC but it’s an ETF trade I do not use. These big stocks are what really move the market (S&P 500) I think so I always trade with this index trend in mind.



S&P 500 Weekly ETF Trading Strategy – Bullish

The chart below is self-explanatory I think… But let me recap.
The overall trend is up, so your ETF trades should be to the long side buying on the dips. The chart below goes back three years so the candles are a little condensed and small, but what you need to know are these two points:
1. After a correction within a trend, probability says that price is more likely to continue rising than it is to reverse. Notice the market just had a running correction through the summer months.
2. A reversal candle on the weekly chart (bullish reversal candle) generally indicates a 2-3 week rally is likely to happen.
Conclusion: Seasonality says higher prices, weekly chart below shows bullish reversal candle… Oya!


The Bigger Picture: 3 -6 Months Out…

This is a quarterly chart and BIG picture outlook. Over the next 3-6 months we could see the stock market start to become choppy and rollover into a minor bear market for a couple years. That is the best case scenario I think… The other scenario is a major crash back down to the 700-1000 level on the SP500 which would cripple the baby boomer’s from retiring and getting a job would be impossible for almost everyone – full blown recession way worse that what everyone is saying we are in now.

Things are going to be really interesting over the next few years and things for south you better be prepared to make a killing during the next bear market or life will not be fun. The nice thing is that you can take advantage of these moves without ever having to lift a finger with my automated trading system.



ETF Trading Strategies Holiday Conclusion:

In short, I think we have a couple good weeks ahead of us. Holiday season, quality family time and a rising stock market paints a nice picture in my mind.
Anyway, I hope this report was helpful and somewhat educational. I always appreciate feedback and things you would like me to write about how I interpret, trade or analyze things. I am here to help and new topics to write about are always welcome!

Cheers,
Chris Vermeulen

See more here.

Algorithmic trading is not something I ever thought I would be doing and it did not really exist 15+ years ago with I started investing. Fast forwarding to today all we seem to hear about is “HFT” high frequency trading, automated, black box trading, and algorithmic trading and how they are making people a boat load of money or almost bankrupting companies overnight like Knight Capital…

Since 2001 I have been sharing my technical analysis, knowledge, and trades with fellow traders online. And over the years through one-on-one coaching, or through financial newsletter it became very clear that emotions and human tendencies will never change when it comes to emotions (fear & greed) along with ones commitment to stick with a plan/strategy without deviating off course no matter how boring or slow it may be.

“The financial industry wants you to think investing is complex,
but the truth is: investing is and must be kept simple
and the best way is through algorithmic trading!”

After five years of personal coaching and newsletter writing for swing and day traders trying to help with their habits, techniques of what I knew worked very well for me, was not something most clients could not succeed at even when they had every step/rule identical to what I was doing to make money. This problem led to me thinking outside the box to figure out why and how I could get others to mimic what I do best so they too could enjoy the freedom and peace of mind knowing they are in control of their life.



After several few months communicating with clients, professional traders and educators across the globe and covering many different topics on education I found what I was looking for. The problem lies with us being human. You see, people are very emotional and during heightened times of excitement or fear they tend to react from instinct rather than to follow a set of rules.

People have the tendency to stop doing a task over time that is repetitive in nature, even if it’s making money for them. And it was this conclusion that triggered my thinking to build a system that will trade my strategies using my rules and execute trades automatically without myself or clients having to do anything. This is when my focus on algorithmic trading became my new passion and the driving force of my automatic investing system for individuals.

What is My Simple Automated Algorithmic Trading System?

In short, an algorithmic Trading System is a set of rules and formulas programmed into a trading platform. The algorithmic system places trades automatically according to the sets of rules we create. These rules are built to allow investors to have increased income potential that a properly traded strategy can provide without the need to watch the computer screen all day and manually enter and exit positions when you think the time is correct.

With the use of technology we can now benefit from our strategies by converting them into computer formulas and optimize them for specific investments and make complete automated algorithms. My S&P 500 algorithms were designed and built so I could have more free time while still making the same amount of money if not more and to trade without my emotions getting in the way. This strategy has worked extremely well over the year and I now want to make it available to a select group of individual investors to get the full benefits of what my system provides me with.

Investors BIGGEST Problem and How to Avoid It With Algorithmic Trading

In short, the problem we all have as traders is the fact that we are human. Riddled with bad investing habits, and responding to market fluctuations emotionally rather than logically is why we have trouble making money consistently over the long run.

Here is a recent screen shot of my trading systems intraday algorithmic trading strategy used during an uptrend. Trading the ES mini futures this algorithm pulled $3,425 in two weeks when most traders were getting shaken out of trades. No keep in mind this is one strategy out of the twelve that are traded with my complete algorithmic trading system. Other strategies are based on the various time frames, trends and volatility to be sure we have all types of market fluctuations covered.



The rich do what’s hard;
that’s why their life is easy.
The poor do what’s easy;
that’s why their life is hard.

Next I want to show you how to trade like an emotionless robot, how it works, why, what to trade, and how much capital is required to have this algorithmic trading automatically traded in your brokerage account to make a decent living trading the S&P 500 index which is the least volatile and most liquid investment available to traders and investors. A really exciting part about it is that you do not need to learn or installed anything. It is a truly 100% hands free investing system that provides annual results that will make your financial advisor envious!
Stay Tuned For Part II Of How & Why You Should Be Algo Trading…

Chris Vermeulen

See more here.