r/SPInvestments

I have been investing in stocks for many years and have finally achieved some modest success. However, I certainly wasn't able to generate consistent profits right from the start.

Over the years, I've tried many trading methods, including technical analysis, chasing hot stocks, and investing in stocks recommended by others, but the results have been less than ideal. I gradually realized that the truly effective strategy is to trade with the trend.

I remember when I first started out: I spotted a tech stock that had been falling for several days, assumed it was cheap enough, and took a heavy position in it. Before long, however, it continued its decline. Not long after, it continued to fall. Not only did I not make any money, but because I was afraid of cutting my losses, I delayed and my losses grew larger and larger. That experience completely changed my way of thinking.

After that, I started focusing on trends, only trading stocks that had clearly strengthened, had increased trading volume, and whose prices were constantly hitting new highs and lows.

Once, I observed a small-cap stock that, after several weeks of consolidation, suddenly broke through a key resistance level with increased volume. I didn't immediately chase the high price, but patiently waited for a pullback to confirm support before entering the market. Although I didn't buy at the absolute lowest point, the stock subsequently embarked on a very steady upward trajectory.

I have grown increasingly convinced that the market is always a more powerful force than any individual's predictions. To achieve stable profits, one should not rely on guessing the bottom or on short-term luck, but rather on following trends, controlling risks, and patiently waiting for genuine opportunities.

To this day, I continue to use a trend-following trading strategy, respecting and following the market, rather than fighting against it. In the long run, this approach has provided me with a level of stability that is far more reliable than the occasional windfall of a speculative trade.

If you are only looking at candles, you are looking at the shadow. To see the object, you need Volume Delta.

What is Volume Delta? It is the difference between "Aggressive Buys" and "Aggressive Sells" at every specific price level.

The Sigma Indicator:

• Bullish Delta: Even if a candle looks red, if the Delta is highly positive, it means the "Smart Money" is absorbing the supply. They are buying everything being sold.
• Bearish Delta: Even if a candle looks green, if the Delta is highly negative, the institutions are unloading their positions into retail buyers.

The Strategy: Next time you see a "Support Level," check the Delta. If price touches support and the Delta is massively negative, the support is going to break. If it touches support and the Delta is massively positive, it is a "trap" for sellers, and the price is about to launch.

Stop guessing what the candles mean. Let the volume tell you the truth.

The ATR post showed you how to set a perfect Stop Loss. Now, let’s talk about how to use it to ride a 1:5 R:R trend without getting shaken out by "noise." 📊🚀

The Strategy: Instead of a fixed Take Profit, you "trail" your stop behind the price using a 2.0x ATR multiplier.

The Execution:

1. Once you are in profit, calculate the current ATR value. 🧮
2. Multiply it by 2.0.
3. If you are Buying, move your Stop Loss to Current Price minus (2.0 x ATR). 🛡️
4. Every time a new 1H candle closes higher, update your Stop Loss.

Why it works: This gives the trade enough "room to breathe" during small pullbacks but locks in your profit if the trend actually reverses. It removes the emotion of "Should I close now?" and replaces it with Math. 💎⚙️

Question: Are you still using fixed Take Profits, or are you ready to let your winners run? 👇

Most retail traders see an indicator like the RSI (Relative Strength Index) and buy when it’s "oversold" or sell when it’s "overbought." That is a fast way to lose money. Indicators are lagging; they don't predict, they report. The Sigma Trader uses them to spot Divergence.

The Mechanical Setup:

• Price: Making a "Higher High" (Trend is still moving up).
• Indicator (RSI/MACD): Making a "Lower High" (Momentum is dying).

The Sigma Logic:

Divergence occurs when price action is disconnected from momentum. It is like a car driving uphill while the engine is running out of gas. The car keeps moving for a second, but the reversal is inevitable. 🚗💨

The Execution:

When you see a bearish divergence on the 4H chart, do not sell immediately. Wait for the CHoCH (Change of Character) on the 15min chart to confirm that the "engine" has officially stalled. Then, and only then, do you enter. ⚔️💎

Divergence is not a signal to trade; it is a signal to WATCH for the trade.

In Forex, we have a statistical phenomenon called the "Mid-Week Reversal." It is not a coincidence—it is how the algorithms build the weekly high or low.

The Mechanical Rule:

1. Monday/Tuesday: The market establishes the "weekly range" (often building liquidity).
2. Wednesday: This is the day of maximum volatility. If the market has been trending up since Monday, Wednesday is often where the "Smart Money" completes their profit-taking and causes a counter-trend move.
3. The Trigger: Look for a Liquidity Sweep of the Tuesday high or low during the Wednesday New York session.

The Sigma Logic: If price makes a "False Break" of the Tuesday high on Wednesday morning, it is a high-probability sell. You are fading the weekly momentum to catch the algorithm’s turn.

Question: Did you notice the market shift its character today? Are you catching the reversal or still chasing the trend? 👇

If you open a chart and just see random waves moving up and down, you are watching the matrix without the code. Algorithmic price delivery follows a strict, repeatable three-phase cycle every single day. This is known as The Power of Three (AMD). 🏛️🔄

The Three Algorithmic Phases:

• 1. Accumulation: This happens during low-volume sessions (like the Asian range). The market makers build up a massive inventory of orders by keeping price tightly bound in a sideways corridor. Amateurs get chopped up here trying to trade breakouts that don't exist. 🪙📦
• 2. Manipulation: This typically occurs at the London open. The algorithm violently drives the price opposite to the true intended direction of the day. The goal? Trigger retail stop losses and induce breakout traders to enter the wrong side of the market. 🪤💥
• 3. Distribution: Once the engineering of liquidity is complete, the true trend of the day expands rapidly toward the New York session, leaving everyone who bought the manipulation holding an empty bag. 📈🚀

The Sigma Execution Protocol:

Never buy a breakout during the Asian session. Instead, draw a box around the accumulation zone. Wait for the London Open to aggressively pierce below that box (Manipulation). The moment price snaps back inside and validates a 15min Change of Character (CHoCH), you enter your buy order.

You ride the distribution wave while the rest of the market wonders what just hit them. 🌊🛡️

We talk a lot about Fair Value Gaps (FVG), but there is a far more aggressive phenomenon on the charts that you must master: The Liquidity Void. 🌌📉

While an FVG consists of a three-candle sequence where the wicks don't meet, a Liquidity Void is a single, massive, runaway candle with virtually no trading activity inside of it. It usually happens during high-impact news releases or algorithmic liquidity handovers. 🤯💥

The Mechanical Difference:

• Fair Value Gap: A partial imbalance. The market will often mitigate only 50% of it before continuing the trend. ⚖️
• Liquidity Void: A total vacuum. Because no orders were filled on the way down or up, there is zero structural support inside that candle. Price treats it like an empty tube. It must retrace to fill 100% of that void eventually. 🧲🏛️

[Image comparing an FVG to a total Liquidity Void]

The Sigma Strategy: When you spot a massive, clean Liquidity Void on the USD/JPY 1H chart, do not try to trade inside it. It is a no-man's land. Instead, mark the absolute start of the void and the absolute end of the void. 🗺️📌

Treat the entire void as a giant target. The moment the market shifts character (CHoCH) back toward the void, you can safely enter, knowing the price will sweep through that empty zone like a knife through butter. 🧈🔪

Amateurs get scared of big candles. Pros view them as open highways. 🛣️🏎️

A retail trader brags about making "100 pips this week." An institutional quant fund looks at them like an amateur. Why? Because pips don't buy houses; **Asymmetric Risk Distributions** do. 💎🏢

If you risk 50 pips to catch 10 pips, your Risk-to-Reward ratio is completely inverted (1:0.2). You have to be right over 84% of the time just to break even. One single mistake wipes out weeks of perfect execution. 💀❌

**The Asymmetric Formula:**

Let R represent your exact unit of risk (e.g., 1% of your account balance). Your net profit over a series of trades is calculated by:

P = Σ(W × R_win) - Σ(L × R_loss)

Where W is your winning trades and L is your losing trades. The goal of the **Sigma Trader** is to maximize the asymmetry of R_win. 🎯⚖️

**The Blueprint:**

By utilizing our mechanical **ATR Stop Loss** setup combined with an **Optimal Trade Entry (OTE)** zone, your entry precision increases so drastically that your stop loss can be narrowed down to a tiny window.

* **Your Risk (R_loss):** Always a fixed 1R (1%).

* **Your Reward (R_win):** Always a minimum of 3R to 5R (3% to 5%).

With a 1:4 asymmetric setup, you can lose 7 out of 10 trades, hit your stop loss repeatedly, and you will *still* walk away at the end of the month in massive profit.

Stop playing defense with your profit targets and start scaling your asymmetry. 🦅🏆

Price action tells you where the market went, but Volume Profile tells you where the big banks were fighting. 🥊💰

The "Point of Control" (POC):

The POC is the price level with the highest volume for the day. It acts like a giant magnet. 🧲

The Strategy:

1. Identify the POC from yesterday’s session. 📈
2. If price is far away from the POC, expect it to be "pulled back" eventually.
3. If price is at the POC and shows a 3-Candle Rejection, it is a high-probability reversal. 🎯

The Formula:

Value Area = Top 70% of all volume traded.

Trade outside the value area for breakouts; trade inside the value area for mean reversion. 🏛️⚙️