What Makes a “Perfect Trade”

Buy low, sell high, and do it with confidence… [TradeSmith Daily]( Note from Michael Salvatore, Editor, TradeSmith Daily: In one hour, TradeSmith CEO Keith Kaplan will go live with what we call “The Perfect Trade.” “Perfect” is about as strong a word as it gets. So, what makes a perfect trade? In short, for a trade to be “perfect,” it needs multiple confirmations from time-tested indicators. A hunch is nowhere near enough. Historical data, probability tied to the type of year and market we’re in, and one more unusual thing need to agree before we pull the trigger. Keith demonstrates some recent results of finding “Perfect Trades” below. And mere minutes from now, in an urgent webinar, Keith will reveal the three core elements that contributed to each of the 32 Perfect Trades our algorithms have found so far. [Sign up for it with one click right here]( – and be sure to claim a free bonus report with three stock picks backed by our Perfect Trade algorithm before it comes down. What Makes a “Perfect Trade” By Keith Kaplan, Contributing Editor, TradeSmith Daily Buy low, sell high. That’s the one investing tactic everyone knows... for as long as the stock market has existed. Even people who don’t invest know “buy low, sell high.” They’ve heard it in movies, TV shows, and in conversations about how stocks cycle through highs and lows – especially when the move is dramatic. Stocks are, after all, a creation of the human mind, which is a deeply emotional entity. As long as we are hostages to our greed, fear, overconfidence, biases, nostalgia, anxiety, and excitement, stocks will fluctuate. They will go up and down... often for reasons that have more to do with our emotions than numbers on a balance sheet. And breaking away from the herd – playing it smarter than everyone else – is easier said than done. So how do we do it? Mean Reversion in Action Over both the long term and the short term, the market’s ebbs and flows are often the subject of mean reversion. In other words, after a financial instrument has experienced a huge move in one direction, it is likely to “revert” from this abnormal state to a more normal one. So, you can expect the price to “snap back” in the opposite direction... much like a rubber band snaps back when stretched. For example, you may know the 1990s were one of the best decades ever for stocks, capped by a “mania” rally in 1999. This meant by the year 2000, stocks in general sported valuations that were much, much higher than their normal levels. So, it was no wonder the S&P 500 “reverted to the mean” and experienced a major down move. In one of the worst bear markets in history, stocks lost 41% of their value. Then, in 2008 and 2009, one of the worst bear markets in history eventually made stocks abnormally cheap, begging for a more normal market. After reaching those lows, the S&P 500 went on to bottom and stage a huge “mean reversion” rally. While it doesn’t look too “normal” on a stock chart, note that most of this recovery simply represented stocks returning back to where they had been in 2007. As you can see, the major opportunity to sell stocks in 2000 and the major opportunity to buy stocks in 2009 were both driven by valuations. In the currency markets, for example, prices can also be intentionally pushed back to the “right” level by central banks. RECOMMENDED LINK [1970’s computer coder Issues Shocking A.I. Warning]( Louis Navellier has spent four decades building a billion-dollar empire on the back of big data and technology... Now he’s stepping forward with a shocking warning about how A.I. will soon impact the wealth of everyday Americans. [Click here to watch his new video ASAP]( Bank of Japan Created the Perfect Trade in 2023 At the end of October 2023, the Japanese yen priced against U.S. dollars (JPY/USD) fell to $0.00658 – but refused to break down any further. Just below that was the price level that the Bank of Japan had defended previously in October 2022 (orange line below), and it was considering raising interest rates as well. 1,000 JPY/USD For those of us who are into technical analysis of our stock charts, that’s a classic “double bottom” play. We were able to confirm the yen trade a couple of other ways, too: - When we plugged the Invesco CurrencyShares Japanese Yen Trust (FXY) into our Trade Cycles tool, we found that the yen ETF was trading at the largest volume (red and green bars below) of the last three years. It made sense to see such a wide volume bar there, given all the past buying from the Bank of Japan at that level for the yen, and large volume tends to support prices from there. - Plus, our Trade Pattern Indicator showed FXY moving from a valley zone (blue shading) to a peak zone (orange shading) over the next few weeks. This was looking like our idea of “The Perfect Trade.” Or, to use that old cliché, a chance to “buy low, sell high.” Sure enough, that “double bottom” play on the yen nabbed over 130% with FXY calls from Oct. 31 to Jan. 2 And our indicators have kept turning up fresh opportunities to “buy low, sell high” ever since. Like this one... A Big Fintech Move Could Be Coming Intuit (INTU), the fintech company that's best known for its TurboTax and QuickBooks software, is looking good in our Trade Pattern Indicator now. As you see below, INTU is expected to move from a valley area (blue shading) to a peak area (orange shading) over the next few weeks – just like FXY had been. That peak profit area runs from April 29 to May 22. And during that time, we expect the season to turn bullish for INTU as well: As shown below from our Probability Indicator, INTU has a pattern of gaining 10.89%, on average, from May 6 to July 25. And those types of gains have played out 92.86% of the time during the past 15 years. I’m proud to say that, in the first six months of deploying this strategy, our analyst William McCanless ended up finding 32 Perfect Trade opportunities that resulted in 475% average annualized gains. We’re preparing a full briefing on the strategy for our Perfect Trade Event tonight, at 8 p.m. Eastern – likely just minutes from now. Join us for tonight’s broadcast to learn more. [You can RSVP with one click of this link](. All the best, [Keith Kaplan]Keith Kaplan CEO, TradeSmith Get Instant Access Click to read these free reports and automatically sign up for research throughout the week. 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