In trading, the market can only go two directions. It can go up and it can go down. So if we were to close your eyes, put a blindfold on, flip a coin and guess the direction, we got a 50/50% chance of being right or wrong. So what we do as traders is we will look for and search for patterns that repeat themselves over and over and over again. Usually these patterns will work more than half the time giving us that edge and then we will build what’s called an entry strategy around it, where we look at entry strategically, minimize our risk, and then look to maximize reward based upon that overall pattern. Now, what I want to do is share with you, introduce to you the strike rate or the pattern of what’s called money magnets.
What is strike rate?
Now the strike rate is not the win loss ratio. It’s just basically asking the question, “Hey, how often does the pattern, the underlying pattern actually perform? “So if we were to do this 10 times, does it work seven out of 10? Does it work eight out of 10? Does it work 10 out of 10?” Like, what’s that pattern and then from there we can build the entry strategy around it. So what is money magnet? So basically money magnets, what it does we use it inside of the stock market and we will find symbols that begin to touch the same price points over and over and over again. And what that basically means is the market can only move so much without having to retrace. So it’s not like the markets moves in a straight line forever, falls in a straight line forever. It needs to wave. So it’s going to exhaust itself and come back up or it’s going to form a really high price and the come right back down. We call those wave movements.
Running the pattern
So what money magnet says, it’s a pattern recognition technology. It will take the previous one week worth of information of the characteristics of the market. It will find the high price, low price, closed price, and it’ll run a formula. And then what it’ll do is it’ll place some dots on our charts. So you’re going to notice that right here above the live mark, we have these dots. That’s the money magnet and believe it or not, we have up to a nine out of 10 chance of the price increasing to those dots. Now that’s the pattern. I just want you to see week by week how this works and what I’m going to do is I’m going to put a blue line on the money magnet, so this way, our price hits it we can say, “Hey, that’s been hit.”
So here we go. So market begins to move. Notice how price increase fulfilled that money magnet. Now when the market itself rallies up and fulfills the money magnet equals the price, the trading opportunities over. So the buying opportunities now whether you bought the stock outright, or if you did like a call option and we took advantage of the upward movement, once it hits it, it’s completely done. Now let’s go ahead and we’re going to wait for the following week. Let’s go ahead and delete everything on the chart. We’ll wait for the following week. And the equation is going to take place where it’s going to take the previous high, previous low, and previous close, and look what we have here. So now we have the previous high, the previous low, the close, that formula and it’s going to forward project where the market may go next.
Looking for the upward movement
So what we do is we look at this information and we say to ourselves, “Okay, we needed to strategically look to take advantage of the upward movement,” whether that’s buying the stock outright or buying like a call option and taken advantage of the upward movement. Now watch to see how the market reacts. Look how the market rallies up and bingo. It fulfills the overall money magnet. So any buying opportunity, any upward movement that took advantage of that, that one’s done. So let’s kind of speed this up a little bit. Let’s go a bit faster. I want to show you how the mark reacts. Here’s another one. So let’s go ahead and see. This one was fulfilled. See how the market equaled it. Only a little bit of opportunity, but the pattern itself still repeated itself.
Entry Strategy
So you have a money magnet below the live mark. We’ll mark it, and we’re going to anticipate that the market’s going to fall. Now, it may not fall right away and that’s okay. So it’s going to be important that we have what’s called an entry strategy, so we’re not just like blindly entering into the market. Now you’re going to notice that we do have additional money magnets that gave us opportunity along the way, but we’re absolutely going to anticipate that the market’s going to decrease in value and fall down to this bottom blue level simply because we know that we have up to a nine out of 10 chance of that fulfilling itself. And bingo, notice how the market falls down equals the price. So taking advantage of any downward movement, maybe buying a put option or selling a stock outright or just protecting yourself or being aware of the sellers taking control.
Now, remember in trading, the market can only go up and the market can only go down. So when you have these money magnets and it kind of gives you the ability to understand what the market may do next and we understand that the performance works up to nine out of 10 times based upon our research, you can begin to really build a strong entry strategy around here. So for example, we have another money magnet above the live market. We can look for counter trend line breaks bullish, we can look for the market entering to the buy zone, look for up Fibonaccis, realistically anything that we need to be able to understand the market’s going to rally.
Now, here in this scenario
We have a money magnet below the market and the money magnet above the market, so we have up to nine out of 10 chance that the market’s going to touch both price points. Let’s see what happens. Okay? So the market fulfills this money magnet. That one’s done and over with. You also have another money magnet below this market and what this does is it helps guides us. So this one was fulfilled. This one was fulfilled, and we also have another one still down below. So let’s go ahead and we will delete this one. And you’ll notice how the mark is just hitting these left and right. It really is a nice sequence that we’re utilizing. We have one above the market, one below the market, and that gives us the ability to help us understand what the market may do next. Now notice how this money Madden was just fulfilled right here, so that one’s done and that one’s been fulfilled. Now we’re going to anticipate the market to rally and head up to this money magnet and what this does is when you understand the concept of the market going up or going down you get a 50/50% chance of guessing, if you can utilize something like this in your favor, you can really build a strong entry strategy.
So so far, all money magnets have been fulfilled. We’ll keep going. We’ll bring up to the live market. And here we currently are right now, and this is the most recent up-to-date live mark, which is a little bit above the market. So we’re going to expect price to increase. So let’s go ahead and just kind of look at the overall statistics of the strike rate and we’ll see the overall performance kind of give us an idea of what’s happening here. Okay. So you get one money magnet a week. So it’s one, two, three, four, five, six, seven, eight, nine, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22. Out of the 22 money magnets, 21 have been fulfilled. What that means is if you were to place one trade at a time, one trade a week at a time, you would have won thus far 21 out of your last 22 trades, assuming you traded each opportunity individually.
Now that’s just the strike rate. That just means we’re utilizing a pattern that has worked 21 out of 22 times in this example. It works very similar in other market conditions. Now we just want to make sure that we’re monitoring symbols that are touching the same price points like we have here and that happens more than you think. Okay. So that’s the reason why we say up to nine out of 10 times. You can see this working more than nine out of 10 times, 21 out of last 22 times, which is great.
This is Joshua Martinez, and I will see you in the upcoming live presentations or demonstrations, or even in the next live video. This is Joshua Martinez. Hey guys, if you enjoy this video and you want to stay up to date to my weekly content, go ahead, subscribe to this channel tradersagency.com. If you want to be notified every time I post a video, go ahead and click on that bell down below. If you want even more information, don’t forget to visit my website at tradersagency.com and subscribe to my free weekly newsletter where I send out my research on market opportunities. Thank you for the opportunity. Have a wonderful day.
