On Saturday 4th December I attended the WiseTraders 2021 Summit at the Courtyard by Marriot hotel at Heathrow.
Ten years ago, I reviewed and endorsed Guy Cohen’s FlagTrader service, and while there are strong elements of the old FlagTrader in the current service, it is abundantly clear that Guy has improved and evolved the service to be:
- More precise, loading the probability of a successful trade in your favour
- Faster to find stocks of interest
- More consistent, follow Guy’s trade plan and you will have a winning advantage
Furthermore, the service is continually improving and evolving so that, year-on-year, it gets better and better.
As with any service like this, when you subscribe you must take some time to learn the strategies and to practice, practice and practice some more, whether by paper trading or on a demo account. You could be able to hit a strike rate of 70% or thereabouts. A mentorship program is also available if you want more hands-on help.
The weekend prior to the summit Guy Cohen delivered a ‘Foundation Day’; this training day teaches you the building blocks so that you are full prepared to understand the strategies that Guy outlines during the Strategies Day. Therefore, the Foundation Day is more important if you are new to WiseTraders. Furthermore, there is “homework” to teach you the (thankfully few) patterns that are key to using Wise Traders strategies.
The entire WiseTraders premise is built upon three logical ‘Master Keys’.
- Market Timing
- Stock Selection
- Trade Plan
The Stock Selection part of the process depends on several elements:
- The presence of at least two Big Money footprints (I personally look for a minimum of 3)
- The OVI is mandatory … more on this below
- Shrinking retracements (optional, in as much as they are not always obvious or algorithmically filter’able).
The OVI is a patented indicator developed by Guy personally. This indicator is a powerful tool in finding the stocks to trade by showing the current ‘position-building’ sentiment of options traders. In simple terms, you only want to consider buying a stock if position-building options traders are showing signs of being bullish. The OVI is so powerful that Guy’s hedge fund model significantly outperforms the S&P500 using only this indicator and ‘portfolio construction’.
However, Stock Selection is just one of the three Master Keys. Market Timing and a robust Trade Plan are also required, and these are fully covered on the Foundation Day.
Further training in helping you to identify WiseTraders setups is available by using time-lapse charts where a stock’s history is replayed at roughly 1 day every 3 seconds. This helps train your eyes to recognise the setups and is a powerful training tool.
The filtering software helps you scan all USA-based stocks into just a handful for the presence of combinations of these elements. In seconds the TradeFinder application will produce a list of stocks to check for a possible entry.
The whole process takes less than 10 minutes per day. Guy provides advice on how to set up trades and one of his Mentoring team, Chloe, has very useful advice on trading small accounts. In a departure from our standard approach, I will start with $3,000 (roughly £2,300 as I write this).
Why only USA stocks? Simply, because that’s where the liquidity is for the analytics Guy requires for his OVI indicator!
Following Chloe’s rules for trading small accounts, I intend to trade this way for the next 12 months:
• A maximum total of 15% of capital being traded
• No single trade to exceed 5% of capital
• Focus is on LONGS (Buys) only.
• Only trade good ‘AAA’ setups. I expect to trade only an average of 1 trade per week.
• Initially I intend to fully close a trade at ‘Profit Target 1’ (aka P1) because:
o Easier psychologically
o Realistic targets for new traders
o With compounding, should still provide a good R.O.I.
However, there are other strategies for trade management that I will record.
• Out of the five strategies I am only going to look at bullish (buying) setups using the OVI reversals, post-earnings, and short squeeze strategies.
This means I will only be using fast filters 9, 10, 13a and 25. I will amend these filters to look for a positive OVI and to limit stocks where the stock price is below $100. The $100 cap is all to do with margin requirements as I will be using a spread-betting broker.
As my capital increases, I will increase this price constraint.
• Goal. I have set a target to increase the account by 15% every 3 months. However, I do not expect to be trading real money until roughly Easter. Practice, practice, practice remember!
I will only update the blog once a trade is fully closed.
The benefit of attending the Strategies Day part of the Summit in person rather than via the Live stream was the opportunity to discuss the strategies with folks who already use them and have for several years. Everybody I talked to was happy with their results and not one of them was a trading mastermind, just ordinary folks like you and me. This gives me great confidence that this is a high-quality opportunity.
I did well with my FlagTrader review all those years ago and I am really looking forward to this review. At the end of this review, I hope to resubscribe and become a long-term trader using WiseTraders strategies and software.
I haven’t talked about using options. As a new trader, you are encouraged to be successful with the base strategy first. However, at some point, I hope to jet off to Miami for the Options workshop. Options done properly, ie. in the way Guy teaches it, will accelerate my account growth. This may be roughly 5 years hence as it will probably take this amount of time to grow my $3,000 to the point where I have the capital to invest and afford the subscription fees.