Happy Friday traders!
After my case study on Tuesday over how well Phoenix works, I had several people email in asking for me to give a specific example.
So today, that’s what I’ll be doing. We’ll be looking at a specific case study involving my trade in TLT. I’ll also present to you a very critical piece of this Phoenix formula… something that I haven’t really talked about yet.
Plus, a free cheat sheet about market correlations…
What’s this very critical piece of the formula?
Analyzing the big picture.And then using that to make trades. That’s why we’ll be looking at my trade on TLT (because looking at the big picture is essentially what I did).
Being able to identify major money flow in the market is critical to trading success. Think of it this way — you wouldn’t want to go surfing if you knew a hurricane was coming, would you?
Well the obvious reason of it being extremely dangerous, but from a metaphorical standpoint… it would make it too difficult to flow in the direction you want to go.
Surfing is about flowing WITH the waves, not against them, and it’s certainly not about getting beat up in a storm.
Trading is the same. Identifying overall market direction, and correlations, is critical.
For a little extra clarification, here’s a cheat sheet I’ve made for you, in regards to market correlations. It shows you index futures, major sectors and ETFs, market internals, correlations we use here at Simpler, and additional expertise from our futures trader, Raghee Horner.
Have you ever wanted a quick way you could glance at the overall market, and see which way it’s flowing? Of course, all traders have.
After all, you MUST be able to do this to be successful.
Check out my Phoenix Finder below, which enables you to do just that.
Phoenix Finder — Big Picture — Daily Chart
This simple grid gives you an overall picture of market sentiment at a glance.
This is what lead me to identify my setup in TLT… the trade I promised to talk about at the beginning of this issue. The dots at the bottom are the companies we’re watching — and the more green the better — and here’s why.
Long trade in TLT
The trade I’m going to show you, I closed out for a 50% profit. 50% is good, but you know what is even better?
The fact that I used Phoenix to get out at resistance BEFORE the trade made it’s full target, and when it began to fail at resistance. Wouldn’t you rather have 50% on target than an emotional profitable trade that eventually went to a loss because you didn’t know when to jump off?
Phoenix showed me the turning point to get in, and it showed me the turning point to get out.
Looking at both upwards facing red arrows you can see the clear turning points of when I decided to get in and out of TLT based on what the Phoenix Finder was telling me.
You know what else is the best part about this? That bonds, the Yen, and Gold were starting to fall, it told me I needed to get more aggressive with my long trades in the aggressive industry groups. So, after taking profits on a trade that didn’t meet targets, I got in even better trades, and didn’t take a loss.
That’s what I mean about analyzing the big picture, and then using that to make better profitable trades.
It’s a pivotal skill for any successful trader, and I’m now blessed with a tool and strategy that highlights just that.
Plus, the Phoenix Finder is easy to use… and also… get this… I’ll be teaching you how to use it during my class.
Hope to see you there!