-->

Anatomy of a Great Trade: NVDA

Post a Comment
 
   
     
   
 
SEPT 15, 2023
 
   
SCOTT WELSH’S ANATOMY OF A GREAT TRADE
A Historical Look At NVDA’s Big Moves
 

By looking at Great Trades, we give ourselves a chance at seeing future winners.

There’s a reason we get better when we watch tennis on TV, and there’s a reason we trade better after studying the great winners of past decades.

So, where do we find big winners?

Yes, there are scans and fundamental analysis and other ways to try to identify winners before they happen.

But there’s a simple rule we can use.

If a stock made a huge move before, it probably will again. 

Take NVDA, for example.

Everyone knows how amazing NVDA has been in 2023. 

And our system would have caught this year’s big move, entering in March ‘23 at $231.92 and still riding it (currently at $447). Our entry would have come after 2 consecutive closes above the 12-month simple moving average:

 
 

But could we have known it was coming?

Yes.

Because it has done it before.

Here’s the trade before this year’s trade.

Entering on two consecutive closes above the SMA and exiting on the first close below the moving average would have caught a massive winner from November 2019 to April 2022, as indicated by the teal line:

 
 

That great trade went from $50 to $185. 

NVDA has done several great trades, and great trades usually lead to more of the same.

We would do well to keep an eye on it far into the future.

Happy trading,

Scott

P.S. As a reminder, these historical lookbacks are based on my longer-term Weinstein Stage Analysis method. The charts above use monthly candles and a 12 month simple moving average. For details on this method, see my explanation on this Ask The Pros episode starting at timestamp 20:45.

Additionally, the teal lines on the chart show the profitable runs.
JEFFRY TURNMIRE
The Hidden Vulnerabilities of Trading Algorithms
 

As you sit down to trade in today's technology-driven financial markets…

You might wonder if it's a battle against flawless machines and complex algorithms.

These intricate pieces of software are designed to execute trades at lightning speed, making millions of decisions per second.

They're the backbone of modern trading, and their impact on the financial markets is undeniable.

But here's the fascinating part: even the most advanced trading algorithms are not immune to vulnerabilities.

Just like any human-made system, they have their weaknesses, and it's these very weaknesses that can be exploited by traders who are quick to spot them.

The world of high-frequency trading (HFT) is where algorithms reign supreme. 

These bots execute trades in microseconds, making it nearly impossible for human traders to compete on speed alone.

But it's important to remember that algorithms are created by humans, and they operate based on a set of rules and parameters.

One of the hidden vulnerabilities in trading algorithms lies in their predictability. 

Many algorithms are designed to follow specific patterns, reacting to market data in a predetermined way. While this can be highly efficient, it also means that skilled traders can anticipate their moves.

By understanding the patterns that algorithms follow, traders can position themselves strategically to take advantage of these predictable movements.

Another vulnerability arises from market events that the algorithms cannot foresee or adapt to quickly enough.

We've seen instances like the Flash Crash of 2010, where algorithms reacted to unexpected events in an exaggerated manner, causing massive market disruptions.

Savvy traders who understand the limitations of algorithms can capitalize on such events by reacting quickly to the algo-driven stampede.

So, you might be wondering, how can one spot and exploit these hidden vulnerabilities?

Well, it requires a deep understanding of how trading algorithms work as well as a sharp eye for patterns and anomalies in the market data.

I'll give you a shocking example:

Near the beginning of 2022, I discovered one of these flaws.

At first I wasn’t sure what I was seeing, but after doing some testing…

I noticed that the pricing algorithm for one particular ticker would consistently misprice options at a specific time before expiration.

The result of that is a “glitch” in the algorithm that has led me and my followers to an astounding 59 consecutive wins with 0 losses.

It's hard to believe, bots aren't flawless — and we’ve proven that for 15 months now.

If you're intrigued and ready to learn how to exploit these hidden vulnerabilities…

I invite you to watch this special video I recorded for you.

Inside, you’ll discover this mysterious 'glitch' I’ve been telling you about.

And I’ll show you how I've been exploiting it again and again since June of last year.

Hope you enjoy,

— Jeffry Turnmire
___________________________________________________
   
 

Related Posts

There is no other posts in this category.

Post a Comment

Subscribe Our Newsletter