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If you would like to
understand the true profit potential of the system please read this page. You won't
be disappointed.
I
would like to make a comparison between traditional charting and my techniques. Let
us look first at a older but highly volatile situations. The Nasdaq 100 index, when
this index was really flying. Two key levels had been established on the weekly
chart. A peak at 2070.6 and a low around 1656, a 25% range measured from the low.
Technical analysts would consider these levels as being of significance, even if
not major levels. We had the same levels with one HUGE difference.
We had forecast the important levels
between 8 and 12 weeks before the market traded at the
prices.
Our numbers were 2066 (actual high 2071) and
1656 (actual lows 1657 and 1655). Markets are not random, they are predictable.
Spotting highly profitable targets, days and weeks before the event, is normal.
Spotting them months before is less common but not that unusual.
So what else did we predict well in
advance? Here just a few
examples of the major ones that I can remember
(there are thousands of
examples from day trading).
The lows of the 2009 stockmarket
crash (See our
Dow
Special page)
The October 2000 low in the
Euro which was publically
predicted at the Futures and Options World Expo in Zurich, in front of a large
group of Swiss bankers and fund managers.
More Recent Trades (2011)
EuroFX futures. A 15m
chart
Predicted range, which lasted for
the next 2 hours, was 1.3950 down to 1.3923.
Actual trading - Three tests on
the top. 1.3950, 1.3952 & 1.3951. Average error 1 tick ($12.50 per
contract).
One test of the low - 1.3923. No
error - Exactly correct.
EuroFX futures. A 60m
chart
The following day the market was
near its recent highs around 1.3970. Predictions were that
support was at 1.3938 and a high
probability that it would be tested. 14 hours later and no test had been seen but no
significant new highs were made either. Then the U.S. unemployment figures were
released and the market exploded upwards, as expected by many,
BUT then unexpectedly (for them)
it reversed
sharply and made new
lows. It touched our
forecast level of 1.3938 EXACTLY, was
confirmed by our key reversal point (error less than 2 ticks but let's call it 2
ticks = $25 per contract), and then exploded back to the upside to make
new highs.
Now you might think this story
has a happy ending for the Euro "Bulls". The fact is that we had predicted the
new highs would fail to hold and we were right again. The market stayed within
that hour's trading range for the next 18 hours without going 1 tick
higher.
Previous Longer Term Forecasts (Proving that it's not a
fluke)
The Dollar/Yen top in 1998 was
forecast as a major multi year top and we had a major risk level anywhere above
146.50 The high was 147.62 and that level hasn't been seen since, with the
market having fallen around 45%. That is almost 13 years below this predicted
turning point. Economists were virtually unanimous in seeing a rate of 165 to
175 within 3 months of the 1998 high, instead it went to 101.30 and it went
there fast. At the time of writing we are trading at 82.88.
Unexpected Major Events (Black Swans)
Even the September 11th 2001
terrorist attack didn't create any major problems for our forecasting
techniques. We had targets well below where the stockmarkets were trading
before the attack and even the Nasdaq 100 only closed below our downside target
for just two days before starting a major rally. Then we were ready for the
major rally with accurate upside targets already in place.
2008 (Stockmarket rallied 6.3% in 4 days)
The July 2008 S&P e-mini low
we had forecast correctly within 1 tick. That is a downside of risk of just
$12.50 per contract before a major rally. You could have also traded the July
lows in the Dow which had a different pattern but very similar
outcome.
The Euro in 2006 - forecasting a sharp
reversal
At the end of 2006, the Euro
rallied sharply against the Dollar and closed almost on its weekly highs after
a rise of 260 points that week. This was the second week of strong gains. This
move was touted by many economists as being the start of a major rally which
would be extensive and immediate. Notice the word immediate. The macro view was
correct but the timing was awful. Our methods showed that there was a real
danger that the market could fall nearly 300 points from the highs and the
danger of a fall was focussed upon the market touching a rate of 1.3350. That
week's high was 1.3349. The next week saw an insignificant rally (less than 20
points) and a sharp fall. Within two weeks of touching 1.3350 (high 1.3369) we
fell 300 points to 1.3053. In fact just to show you that the lower level we had
forecast was really significant, the market then bounced 190 points. The level
that the market pulled back to and bounced from was known by us before any of
the initial downside reversal had even taken place. It was marked on our charts
even as the market traded at its highs.
Day trading using timed trades
This is taken from a type of trade that I use
over and over again. The methods show me levels in a falling market that are
much safer to buy at and also how long it is safe to hold the position for.
Imagine that the market is falling and falling fast. For example, the Dow is
trading around 11750. Every bid seems to be getting hit hard and the system
says either buy at 11733 and you can hold it for 8 minutes from now or buying
now is too risky. Now 8 minutes might sound like no time at all but in a fast
moving market it is a lifetime. Often I could buy the 11733 level, see a minor
move against me (which is always covered with a stop) and sell within 2 or 3
minutes for 20 or 30 points profit. If the market comes down lower I can now
see whether the level is safe to buy at again or the next level I should wait
for and repeat the profit taking operation (perhaps this time with more time to
hold the position for a larger profit). One client told me that in a strongly
rising market he had decided to sell the market 11 times during the day and had
made money on 10 of the trades. The 11th had been a minor loss. The trend may
be your friend but if you know where the trend makes short term reversals and
why it reverses, you can make significant profits with minimal risk. Remember
these are actual key price levels you are seeing not an indicator saying that
the market is oversold below 30 (and even more oversold at 20 while you lose
more money).
_______________________
Intra-day highs and lows are forecast correctly
every day. What do I mean by correctly? A significant change in trend takes
place with an insignificant price move against your position. In other words
very low risk trades. Are we ever wrong? Of course we are, but making money is
about recognising any mistakes quickly. As we know the levels in advance we can
proactively monitor the activity, as it hits the critical levels, and not be
reactive to a loss. The long term result is then higher profits.
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