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Loss Aversion: A Mental Trap Every Trader Needs to Know

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Traders,

Check out this 2-minute video on Loss Aversion attached below.

Loss Aversion is one of the mental traps that even the best traders fall victim to. Daniel Kahneman and his associate Amos Tversky won the Nobel Prize for identifying it.

In short, Loss Aversion is the tendency for people to irrationally risk more money (“double down”) in order to avoid a loss. The [bad] feeling of a loss is physiologically more powerful than the [good] feeling of an equivalent gain.

Sign up for Chart Wizards if you’re serious about trading. It’s the best deal for traders, and Factor members get a special discount.

Thank you for watching, and safe trading,

#JK – ChartWizardsNFT

Also: See my bold interest rate outlook and latest market update here (VIDEO).

Three Day Trailing Stop (Video)

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One Year Later: GE, Classical Charting, and Avoiding Dead Money

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One year ago, July 2024 – ChartWizards Report #53 highlighted General Electric (GE) at $150 per share, breaking out from a 25 year range and with a price target more than 30% higher. That move just happened.

Report #53, July 2024

The chart told the story:

  • G.E. was one of the first twelve companies to go public on the U.S. Dow Jones Index, in the late 1800s

  • It became an American blue chip, but G.E. peaked in 1999 and spent the next two decades in decline; “doing too much”, diversifying into mediocrity.

  • Post-2020, we saw an inverted Head and Shoulders bottom nested within a broader structural pivot – the company was divesting losers, leaning back into core aerospace.

  • The breakout above ~$150 was clear, decisive, and confirmed on both log and arithmetic charts (see Report #53, July 2024)

  • The measured move objective of ~$260 was derived from Edwards & Magee-style target projection using the depth of the pattern

Here’s the General Electric chart today – target reached at $265.

The log chart looks as if the move from $150 to $265 isn’t huge, but it is!

HAPPY 1-YEAR ANNIVERSARY: X post, July 23, 2024

The Alpha of Avoiding Drag Money

The real alpha in avoiding GE’s 20-year sideways slog (2000–2020) was opportunity cost management. Here’s how I think about it:

1. GE paid dividends, yes, but at what cost?

From 2000 to 2020, GE:

  • Lost 75%+ of its peak market cap 😱

  • Flatlined while the S&P 500 tripled 😩

  • Burned two decades of investor “patience” ⏳

Avoiding this sinkhole means your capital was free to ride Apple, Amazon, Tesla, ten years of Bitcoin, or any of the other 10x moves in energy, cloud, semis, or healthcare. That’s the alpha of trend following, classical charting techniques, and risk management.

I will NEVER hold a position that digs into my pocket and/or drags down my returns.

2. The GE Trade Was Inevitable

The range was long. The breakout was obvious. The post-split restructuring was public. You didn’t have to guess the bottom. You could have read Report #53 while drinking your coffee on a Saturday, and still caught the entire move.

This is enhanced participation, that is avoiding the drag without missing the meat of the move.

3. Emotional & Cognitive Alpha

Avoiding GE during the dead years was financially beneficial, but it also kept your mental capital fresh and ready for better setups.

In nailing this breakout, we dodged two decades of drawdown disguised as dividend yield. A masterclass in discretion and discipline.

Traditional financial advisors will not give you this edge. They are trained to avoid specificity and hedge their views – speaking in abstractions instead of clean, well-defined setups with asymmetric risk and reward. They don’t say “30-50% upside.” They say “potential for long-term growth.” That’s the difference between asset gathering and actual trading. 

At Factor Research, and in ChartWizards reports, trading education is based on the charting principles of Peter Brandt, rooted in the techniques of Edwards, Magee, and Schabacker. No noise, no hype, just disciplined risk management combined with decades of pattern recognition.

  • Clean technical setups

  • Macro and structural context (GE’s transformation)

  • Precise risk-reward framing

That’s what made this GE trade possible.

This is why ChartWizards Reports exist. Sign up here if you haven’t – this is the last month to lock in Year 1 pricing: 

The entire Report #54 from AUGUST 2024 is pasted below. Its insightful for me to read what I was thinking this time last year, examining where prices were, where my P&L was, where Bitcoin was, etc., and I encourage other traders to maintain their records in a similar way.

This is my third “thought piece” for July 2025, so my apologies for feeling “wordy”, and thank you for reading.

Trade safely.

#jk

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FREE – Chart Wizards Report #65 (May 2025)

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Friends of Factor, Chart Wizards, and Aspiring Chart Wizards,

In anticipation of releasing the June 2025 Chart Wizards report in the next few days, I present to you this gift: ChartWizardsNFT™ Report #65 (below) is my most complete, candid, and chart-packed breakdown yet. It covers everything from gold’s moonshot to Palantir’s political premium, plus the impact of Trump’s “Big Beautiful Bill.”

If you trade with conviction, manage risk like a pro (or hope to), and want raw alpha instead of recycled headlines, this report is for you.

Get next month’s setups, breakdowns, and battle tested frameworks before the free crowd.

Subscribe to stay sharp.

Factor members get a special discount.

Trade Safe,

jk

(you can follow me on X here)

Report #65 (May 2025)

CWNFT 65 by JK

 

FREE: CHARTWIZARDS REPORT #64 (SAMPLE)

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Greetings, fellow Chart Wizards, future pros, wanna-be’s, and the chart curious,

I’m thankful to call Peter Brandt my friend, but seeing as he’s one of the greatest market tacticians of all time, I’m still humbled and honored when he gives me a compliment like this one:

Markets are changing fast, and I wanted to share some FREE alpha with Peter’s readers and Factor members:

What You’ll Find in My Reports

My reports aim to distill the most important market-moving news and highlight both new and existing trade setups in a simple, quick, and easy-to-digest format. Most importantly, everything is framed through the lens of risk management, with a focus on practical, tactical trading.

In short, this is my monthly trading journal. It’s never financial advice (I’m wrong a lot). Do your own research (DYOR) before investing capital.

Enjoy this FREE SAMPLE of Chart WizardsNFT Report #64.

Note: some full pages and select charts have been removed due to their proprietary nature.

 

ChartWizardsNFT Report #64 – May 5, 2025

What I’m Watching:

Here is a compelling conversation from Dr. Eric Schmidt, former Google CEO, on the intersection of artificial intelligence, biotechnology, and national security.

According to Schmidt AI is “underhyped“. He says it is no longer just advancing computer science and automation, but also reshaping fields like biophysics and materials science. This remark jumped out at me: “The computers are now doing self-improvement… They don’t have to listen to us anymore.”

🔹 Geopolitics, Interest Rates & AI Money 🔹

As markets digest the first U.S. GDP contraction since 2022, a shifting global order is becoming undeniable. A joint U.S.-Ukraine minerals fund, record-breaking container cancellations from China, and rising tariff-driven inflation suggest structural decoupling is no longer just a tail risk – it’s base case.

Fed Chair Powell acknowledged stagflationary pressures and trimmed balance sheet runoff, while Bitcoin dominance and gold prices surged as investors brace for a liquidity pivot.

Meanwhile, OpenAI secured $40B, led by SoftBank, with Trump administration support—marking the largest private tech raise in history. What happens next depends on the Fed, tariffs, and investor resilience.

FactSet: In aggregate, companies are reporting earnings that are 10.0% above estimates, which is above the 5-year average of 8.8% and above the 10-year average of 6.9%.

Torsten Slok at Apollo poured cold water on hopes of getting trade deals done in a timely manner.

🔹 FX 🔹

The U.S. dollar’s global share of global FX reserves has dropped from 72% in 2000 to 58% today. The USD is still dominant, contributing to about 50% of global transactions; however, investors are diversifying away from USD exposure amid rising tariffs and political volatility. In contrast, EURUSD broke out of its multi-month base as Eurozone GDP surprised to the upside while U.S. growth turned negative. The dollar’s relative strength narrative is cracking under the weight of structural trade shifts, fiscal imbalances, and softer Fed guidance. Expect continued capital flows into alternatives as BRICS currencies and gold gain reserve share.

Image

Image

see original eur/usd trade post here

🔹 Crypto Update🔹

Bitcoin Now Positive YTD, Reclaims Key Level as Institutional Demand Surges
Bitcoin jumped to $94.7k following optimism around tariff de-escalation between the U.S. and China, reclaiming the Short-Term Holder (STH) Average Cost Basis of $92.9k – a critical on-chain pivot historically separating bearish corrections from bullish recoveries.

Institutions Choose Bitcoin Over Ethereum
U.S. spot Bitcoin ETFs saw a record $1.54B in net inflows on April 22, dwarfing Ethereum ETF flows, which remain below 1% of spot volume. This reflects a widening institutional preference for BTC, reinforced by macro uncertainty and clear digital gold narratives. For Bitcoin, reclaiming and holding the STH-Cost Basis is pivotal. If this level holds, it could mark the transition to a sustained bullish regime. If not, recent gains risk being another dead cat bounce in a still-fragile macro backdrop.

  • $IBIT is a good proxy for charting BTC too (I remain long).

full report below

-JK

SAMPLE_May 5 2025 CWNFT 64_JK

ChartWizards Report #64 was released earlier this week for subscribers. If you’re interested in receiving at least one report straight to your inbox for less than $20/month, sign up here: https://www.peterlbrandt.com/chart-wizards/  

March Madness 😡

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🔹 What I’m Watching, Reading & Listening To 🔹

  • Surviving Black Hawk Down (documentary) on Netflix
    • Not just another war documentary— this is a raw, unfiltered, deeply human examination of one of the most infamous battles in US military history. What makes this series groundbreaking is its commitment to telling both sides of the story. For the first time in a major documentary, we hear from both the American Delta Force operators and Rangers who fought for survival and also from the Somali fighters and civilians who lived through the chaos.
  • Principles for Dealing with the Changing World Order by Ray Dalio

    • Dalio again showcases his ability to break down complex ideas into clear, digestible insights. In this 40-minute summary of his latest book, he explains how studying history provides a framework for understanding the future, recounts being on the stock market floor the day after President Nixon took the U.S. off the gold standard, and discusses how growing gaps in incomes and values is reshaping society in today's world resembling the period from 1930 - 1945.

https://www.youtube.com/watch?v=xguam0TKMw8 Dalio's Bridgewater Fund (+$200 Billion AUM) just partnered with StateStreet Advisors to launch the AllWeather ETF ($ALLW) to replicate the strategies and positions of the famous hedge fund. AllWeather is arguably the most well-known example of risk parity, an investment approach that allocates to different assets based on their levels of volatility. Rather than pile predominantly into a riskier asset class like stocks to get big returns, the idea is to achieve similar results with a more diversified, safer portfolio, often combined with leverage.
  • Disclosures in early March 2025 showed a bet against Australian stocks and bonds.

🔹 Geopolitics, Tariffs & Market Volatility 🔹

Russian President Vladimir Putin, wearing military fatigues, stated that Russia needs more clarifications before agreeing to a 30-day ceasefire with Ukraine, which was endorsed by the U.S. and Ukraine earlier this week.  Putin took a less hard-line approach than his foreign policy adviser, Yuri Ushakov, who dismissed the terms of the ceasefire as a mere "breather" for Ukrainian troops to regather strength. Putin with paper Ushakov reiterated these demands: Ukraine must recognize Russia's annexation of Crimea and four southeastern regions, withdraw troops from lands claimed by Russia and pledge never to join NATO. He said he "hopes [the United States] knows our position and wants to believe that they will take it into account as we work together going forward." The U.S. restored military aid to Ukraine after ceasefire talks this week in Saudi Arabia.

What’s Next? Negotiations in Moscow happening now between Putin and U.S. envoy Steve Witkoff could determine whether Russia agrees to a ceasefire or requires further concessions before halting hostilities (I think we already know the answer to that).

🔹 Inflation, Labor Market & Fed Outlook 🔹

This week we got inflation and labor market data. Next week we get an FOMC meeting with a press conference and interest rate decision (NO CHANGE EXPECTED). “February’s CPI report flags weakening consumer demand for discretionary items, echoing the pullback in spending evident in other data. But disinflation in certain goods that are highly exposed to tariffs – cars, home furnishings, apparels – has stalled." - Bloomberg Economics
  • The Truflation U.S. Inflation Index dropped to 1.35%, marking a continued decline from February’s 2%+ level (see below)
  • Bloomberg reports Walmart asked Chinese suppliers to lower prices, aiming to absorb the new tariff burden at the supplier level rather than passing it on to consumers. Good luck.

Truflation

Following Wednesday's slower-than-expected rise in consumer prices (CPI), on Thursday it was confirmed that input costs for producers fell more than expected, too. The increase in food prices, mostly due to increases in the price of chicken and eggs, was offset by lower gas prices and prices for automobile parts and machinery (Bloomberg). 

Interest rates

US Federal Reserve chairman, Jerome Powell, signaled that the Fed will take a wait and see approach regarding the impact of the Trump admin tariffs before making definitive decisions on monetary policy. The Fed is now expected to cut interest rates three times in 2025, beginning in June 2025.
  • Barclay's expects just two rate cuts, specifically in June and September on labor market weakness.
The European Central Bank did not disappoint, cutting rates for the 6th time in a row. Monetary policy is becoming meaningfully less restrictive, as the interest rate cuts are making new borrowing less expensive for firms and households and loan growth is picking up. The Euro/USD fx cross quickly reached the minimum target implied by the Ascending Triangle bottom pattern (reversal).

Days before, taken from Chart Wizards Report #62 and X post.

🔹 Commodities: Trends & Trade Setups 🔹

Oil Market Update: Optimism vs. Reality 

Houston’s annual oil and gas conference was buzzing with optimism under a pro-fossil fuel Trump administration, but major oil traders, including Vitol and Gunvor, are beginning to turn cautious on crude prices. Welcome to the dark side.

Vitol and Gunvor don't expect an oil price crash, but instead a slow grind lower as supply outpaces demand. OPEC+ is ramping up production, U.S. output remains steady (though slower than before), and South American supply is growing—all adding downward pressure on prices.

crude oil futures (continuous) $/bbl

 
🪙StoneX broker talks physical gold shortage 🪙
One of the best multi-chart pattern breakouts and trend continuations I've ever seen.

Gold futures $/oz

  • London vs. New York Gold Markets:

    • London operates as an OTC (over-the-counter) physical gold market where traders hold physical inventory.
    • New York is a futures-driven market where traders hedge their physical holdings by selling equivalent futures contracts.

  • Recent Developments:

    • A significant volume of gold (~2000 tons) has been shifting from London to New York, causing logistical constraints.
    • Flights across the Atlantic were fully booked due to gold shipments.
    • Refineries (especially in Switzerland, Singapore, and the US) are backlogged for 6+ weeks due to demand for converting 400-ounce London Good Delivery bars into smaller 100-ounce or kilo bars required for COMEX delivery.

  • Market Impact:

    • The heavy movement of gold has created a short-term supply squeeze in London.
    • The gold futures market in New York is seeing increased demand for physical delivery.
    • Traders are stockpiling physical gold in anticipation of possible tariffs (though gold, as a monetary asset, is unlikely to be targeted).

  • Price Structure Shift:

    • The London gold market, typically in contango (where future prices are higher than spot), has flipped into backwardation (where spot prices are higher), indicating short-term supply tightness.

  • Risk Management & Strategy:

    • Traders are securing inventory in New York to mitigate risk.
    • The geopolitical environment (e.g., Trump administration’s policies) adds uncertainty, prompting preemptive moves by market participants.
US refinery companies with potential trade setups: Royal Gold (RGLD) confirmed a breakout of a multi-year continuation pattern. Freeport-McMoRan (FCX) may soon complete a falling wedge continuation pattern. The former is much stronger.   https://www.youtube.com/watch?v=jvxQJBQidy4&t=1s

Silver Related Stocks Show Promise

First Majestic Silver Corp - $AG (NYSE) - Five point reversal triangle potential that breaks out above $8.00. I've had my eyes on this chart for a few weeks now and will buy the breakout - if and when. Check out this symmetrical triangle in $DBB - Invesco Base Metals ETF. Diagonal boundaries are not ideal. See previous Peter Brandt posts on horizontal vs. diagonal boundaries.   🔹 Other Strong Commodities Trends 🔹 Cattle & Coffee - new all-time highs for both in recent weeks, and both look to continue the upward momentum on rising costs and worsening supply.

🔹 Stocks & Crypto: Market Movers & Setups 🔹

The S&P500 is down more than 10% from its all-time high seen just last month.
  • Costco is down 15% from its 2025 high.
  • SOFI is down 40% (we took profits at target). 
  • Tesla is down 50%. (we took profits at target). 
  • Apple is down 18%  (stopped out).
  • Amazon is down 21%.
For astute investors, long-term investors, and students of history, we're in the midst of what is likely a generational buying opportunity. In times like this, I look to my friend Peter for wisdom. Peter has traded actively through FIVE DECADES🐐 . I have a simple approach when it comes to my long-term portfolio: And on that note, let's get back to the  charts. Relative strength is a great way to discover alpha during broad market corrections, and I'm looking at several stock charts for new positions. I am flat most of these today but have alerts and orders resting in the system.

... To be continued for Chart Wizards subscribers...

Read More

[FREE PREVIEW] ChartWizards Report #62

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🚀 Free Preview: Q1 2025 Review & Outlook Report (#62) 🚀

Exclusive insights from ChartWizardsNFT, released March 3, 2025, for Peter Brandt’s subscribers.

📉 Markets are shifting fast. Are you prepared? 📈

💡 Subscribe today for less than $20/month and gain full access to monthly macro & tactical trading reports.

🔗 Join now → HERE.

PREVIEW_CW62_Q12025_JK

 

Chart Wizards Report #59 November 15, 2024

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Greetings All,

I mistakenly posted my latest market report, which was intended exclusively for paid subscribers, on the public blog. Consider this a gift. If you find the report valuable, I invite you to support my work by subscribing to Chart Wizards’ Actual Alpha reports here:

https://www.peterlbrandt.com/chart-wizards/#section-subscribe

 

Chart Wizards Report #59

Report #59 reviews my YTD performance. Every trade discussed here has been shared with you.

 

Crypto Front & Center

  • Bitcoin: Broke above $90,000, just shy of $100K. My next target is…
  • Solana: Now trading above $200, up from $20 in 2023 = 10x. Continues to outperform ETH

Tactical Moves

  • Locked in profits on  [BTC, SOL], $GOOGL, $TSLA, $VRT, $PLTR, $SOFI
  • Initiated a bold short position in Kellogg

Key Macro Themes

  • Fed rate cuts (50bps Sept, 25bps Nov + 25bps coming in Dec)
  • Pro-crypto/less regulation policy to boost BTC

This report dives deeper into emerging setups across crypto, equities and commodities, from the latest moves in gold, coffee, and crude oil to high-conviction plays in crypto and tech stocks.

Markets move fast. We’ve got you covered.

Safe trading,

JK

ChartWizards59_November2024_byJK

Sweet, Sweet, Sugar

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In the battle between bulls (buyers) and bears (sellers), both the falling wedge and bull flag are continuation patterns signaling a continuation of upward trends.

  1. Falling Wedge: This pattern usually forms after a strong rally, but bulls are temporarily pushed back by bears, creating a waning series of lower highs and lower lows within a narrowing downward channel. Most falling wedges are formed between 3 weeks to a few months, so I am breaking that rule here. When price rises above the upper trendline, it signals that bulls are regrouped and ready to resume the uptrend​​. The target of a breakout of a falling wedge pattern is the previous high of the wedge. In this case, the high is28.00 cents/lb of Sugar #11.

    bullish falling wedge continuation pattern

  2. Bull Flag: Also often found after a strong upward move (the “flagpole”), bulls consolidate in a tight, downward or sideways channel, creating a price chart resembling a “flag.” This brief pause shows bulls consolidating gains, not surrendering. A breakout above the flag confirms bulls’ renewed strength, ready to push higher and continue the prior uptrend​​. The target for a flag pattern is found by applying the distance of the “flagpole” to the breakout point. So, for a flag, the formula is:

Target Price = Breakout Price + Flagpole Height

bull flag pattern

It is worth mentioning that the flag is a launching pattern for the bigger falling wedge. This means that the setup creates an asymmetric risk/reward opportunity by establishing a position where potential upside significantly outweighs downside risk. Here’s how it works:

  1. Defined Risk: In these patterns, traders can place a stop-loss just below the consolidation area (the flag or wedge), capping the downside risk to a small, controlled amount if the pattern fails. For instance, if a bull flag fails and price dips below the flag’s lower boundary, it signals that the breakout setup is invalid, allowing traders to exit quickly. Call it a 1 penny stop down to 21.00.
  2. High Reward Potential: The breakout from these launching patterns often leads to a rapid price move that can target the length of the initial rally or more. This gives traders a clear profit target that is often several times the stop-loss amount, creating a high reward-to-risk ratio. For example, the wedge projects a move to 28.00, or 6 cents.

That is a 6:1 setup — almost double what I normally search for.

Bull flag on a “flagpole”

There’s a time and place for greed, and win or loss — this is one of the best type of bets to make in my trading system.

Track all markets on TradingView

I would risk up to 1.00% of my trading capital on this trade. A little can go a long ways.

Speaking of launching patterns…

… IF the flag is a flag, and if the wedge is a wedge,

can the result complete a double bottom?

Double Bottoms are rare, and often mislabeled, but when they work, they are powerful signals.

Samsara ($IOT) one of the Chart Wizards favorite picks of 2023/24 shown below completed a double bottom in April 2023.

Wedge, flags, (continuation patterns) and double bottoms (a reversal pattern) are defined in detail in Edwards and Magee’s classic work, Technical Analysis of Stock Trends. I’ve annotated the entire textbook for Peter Brandt’s readers — here.

 

Click HERE and improve your trading for $149/yr.

  • 1-2 monthly reports covering macro, commodities, stocks, and crypto
  • Real-time signals and alerts on X and for ChartWizardsNFT members in Discord
  • Actionable, tactical trading tips with accountability and transparency
  • Lock in your membership before prices go up!!!!
**THIS DOES NOT INCLUDE A MEMBERSHIP TO FACTOR. I AM THE AUTHOR OF CHART WIZARDS REPORTS.**

Chart Wizards Reports: https://www.peterlbrandt.com/chart-wizards-reports/

 

Thanks for reading,

Jonathon King

#jk

Twitter (X) | Youtube

ChartWizardsNFT Sample Report – September 2024

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July 25th we announce the launch of the ChartWizardsNFT™ monthly macro letter as a standalone service, available to everyone. Please take a moment to review the following pages for a preview of Jonathon’s most recent newsletter.

Subscribe by clicking here 

 

ChartWizards Offering
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