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markus heitkoetter trading strategy

The PowerX Strategy is Markus Heitkoetter’s personal strategy that he used to become a multi-millionaire. In this episode of How To Trade It, Markus shares his background in trading. We also talk about the challenges he’s experienced and what he’s done to overcome them. He also shares the 3 indicators he uses as part of his PowerX trading strategy. This episode is packed with actionable strategies—don’t miss it.

Markus started trading in 1989—when he was still in high school. He took the 50 Deutsche Mark he had to his name and bought one share of Volkswagen at his local bank (listen for this hilarious tale). He went on to graduate college and worked at IBM. In 2002, he quit his job and left Germany for the US with $30,000 to his name. Now, he’s a multi-millionaire. He coined the phrase “Trade what you see, not what you think”. He’s passionate about trading and helping others learn to trade successfully. Don’t miss out on his expert advice.

Markus Heitkoetter talks about his #trading philosophy—The PowerX Strategy—in this episode of How To Trade It. Check it out! #stocks #StockMarket #Investing #DayTrading #StockPicks Click To Tweet

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You’ll want to hear this episode if you are interested in…

  • [1:20] Markus’ background in trading.
  • [4:43] Challenges he’s experienced along the way.
  • [8:12] Developing a successful trading strategy.
  • [12:11] Handling being wrong.
  • [14:27] Markus’ favorite indicators.
  • [19:42] Using indicators to sell.
  • [22:45] Why Markus is trading options.
  • [27:45] YouTube: Coffee with Markus.

The 3 BIG mistakes Markus learned from

Markus pinpointed 3 mistakes he made when he was new to day-trading that he hopes you can benefit from:

  1. Don’t buy the “hot stock tip”. By the time a hot stock is announced, brokers are selling out of it and you’re behind the trend.
  2. Stick to a consistent system. Losses are normal—you can’t switch strategies or systems every time you lose. Be consistent with what you know works.
  3. Decide your maximum losses. Mitigate your losses to a certain percentage (Markus limits his to 2% of his portfolio). Know at what percentage you take your profits. You’ll never suffer huge losses that psychologically impact your ability to keep trading.

To start making smarter decisions with his trades, Markus dove into technical analysis and learned everything he could about indicators. He calculates his risk vs. reward before entering a trade. He knows his stop losses and where he’ll take a profit. This is the best starting point for any trader.

Develop a successful trading strategy

To be successful, you have to eliminate analysis paralysis. Markus points out there isn’t one magical indicator that can 100% point you where the market is headed. Instead, he’s developed his PowerX strategy, which includes using 3 indicators to identify trends. If you don’t set a core strategy you will always find a way to talk yourself out of a trade.

Markus states: “I needed to be able to find a way to trade that makes me confident enough to pull the trigger when there’s an opportunity”.

So how do you build your confidence? One method that Markus uses is analyzing the history of the stock he’s considering buying into. If his PowerX strategy shows that over the last year trading in one stock he’d make 16 trades (9 winning and 7 losing) and end net-positive, then he’d buy into that stock. Listen for more detail on this strategy!

Markus Heitkoetter points out the need to develop a successful #trading strategy. Hear what his strategy is in this episode of How To Trade It! #stocks #StockMarket #Investing #DayTrading #StockPicks Click To Tweet

Markus’ 3 “magic” indicators

The THREE indicators Markus uses every single day include:

  1. Relative Strength Index (RSI): Markus looks at the RSI on a setting of 7 and the last 30 days. If the RSI is oscillating above 50 Markus points out the market will likely trend up. If it’s running below 50 it will likely trend downward.
  2. Stochastics: Markus uses the default setting of 14 3 3—If this indicator is oscillating above 50 the market will likely shift upward. If it’s running below 50 it will likely trend downward.
  3. Moving Average Convergence/Divergence (MACD): Markus uses the standard settings of 12, 26 & 9. If it is above its moving average the market is likely to trend up.

Markus uses the 3 indicators to gauge whether or not he will buy into a stock. He walks through examples of how this strategy works using Netflix and Tesla (which both skyrocketed at different points this year). Check it out!

The PowerX Strategy in play

Markus points out that trends are short-lived and markets turn around on a dime. That’s why you must calculate your stop-loss and profit. Markus calculates his stop loss at 1x his Average Daily Range (ADR). He takes profits at 2x the ADR. He gets out quickly, but emphasizes that “Nobody ever got broke taking profits”. At the very least he takes partial profits at the 2x ADR and sometimes allows another portion to ride the trend.

Do you want to hear what he’s doing now? HINT: it involves options trading. Listen to the whole episode to hear his current options strategy. We also chat about his YouTube channel and the book he’s giving away for FREE.

Check out this episode of How To Trade IT to see Markus Heitkotter’s PowerX Strategy in play! #stocks #StockMarket #Investing #DayTrading #StockPicks #trading Click To Tweet

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