Having a disciplined trading plan can help traders eliminate the emotions of stocks and prevent them from buying or holding shares of their favorite companies when downtrends are coming.
This was the lesson taught by Christian Fromhertz at the 2022 FinTwit Conference, hosted by Benzinga and Lupton Capital.
What Happened: Fromhertz, the CEO of Tribeca Trade Group, shared a chart of Morgan Stanley MS that showed a sharp decline from 2006 to 2011 to illustrate just how long a downturn for a stock can last.
“One of those situations where you don’t realize just how bad things can get,” Fromhertz said.
Fromhertz now uses the Marketwebs Technical Trading System, based on market profile theories, to help see what a chart says about where a stock could be headed.
“Using volume, time and price to determine a technical roadmap which outlines a significant support and resistance that enables precise entry and exit pivot points,” a slide read during his presentation.
The Marketwebs Indicator is used to help traders maintain a trend and follow discipline.
“What we’re doing here is really trying to take the emotion out of the equation.”
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Why It’s Important: Fromhertz said the system can be used with anything that has significant volume, including equities, futures and forex.
The system also helps “make really good decisions.”
During the presentation, Fromhertz displayed charts and patterns for some notable names, including the SPDR S&P 500 ETF SPY and Coca-Cola Inc KO.
Fromhertz also took tickers from the chat, including Tesla Inc TSLA.
“I would like to see it kind of base,” Fromhertz said, noting that the lower highs coming in are disappointing on the Tesla chart.
Fromhertz said if you would like to get back into Tesla, you can set an alert for when it gets back above value.
Marketwebs is a technical system that is reliable, clean cut and cannot be manipulated by the user, Fromhertz said.
It was noted the Marketwebs system can be great for both bull and bear markets.
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