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Frank started market timing in 1982 when the Federal Reserve cut interest rates and sparked the 1980’s bull rally. Realizing that this rally could have been forecasted, he began to search for indicators which had similar forecasting ability. Within a year, his first newsletter was launched,... More
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  • Successful Market Timing With FibTimer 0 comments
    Oct 15, 2010 11:34 AM

    FibTimer's success depends on "your" success. We want you to be successful. To achieve this requires not only a successful market timing strategy, which we provide, but subscribers must also follow that strategy correctly.

    One of the most difficult tasks for us at FibTimer, is trying to make sure that subscribers understand what is required to achieve success in market timing.

    We can publish the reports, but if the strategies are not followed correctly, the odds of being profitable diminish.

    Subscribers should use the strategy that suits them best. We have aggressive, active, as well as conservative timing strategies. Make sure you know what sort of timing strategy you are emotionally able to handle.

    A novice market timer, who jumps right into our aggressive Pro Timer strategy, might have a difficult time when facing several trades in a fast market. If you are conservative, use a conservative strategy.

    Another concern is for new subscribers who trade immediately. Entering a new position before a new bullish or bearish signal has been issued. We understand the urge to jump in and get started, but in reality, mid-signal entries add risk.

    Our strategies are designed to manage risk in volatile, or sideways markets, and to correctly place us in bullish or bearish trends when they occur. In the aggressive strategies, small losses are a normal part of trading. The aggressive strategies are the most profitable over time, but if you exit the strategy after a small loss, you will not be profitable when the strategies catch a strong trend.

    It is amazing how many subscribers will cancel after a 3-4% loss or a period of months with no gains. Then after we have a 20% or 30% gain six months or a year later, they all come back. But they return when they see the profits and that means it was "after" the gains were made. You have to stay to make the profits we show in our trade history pages.

    Finally, there are those subscribers who wait to see if a signal is correct before following it. This again diminishes the ability of our risk management, built into the strategies, to work correctly. The prices we enter at, can be quite different than those realized with an entry made two or three days later.

    Know Yourself

    Before using any of our timing strategies, be sure you know yourself. What type of investor, or trader, are you?

    a. Are you looking for a timing strategy that will keep you in bull markets, and protect you from bear markets, with few timing decisions that have to be faced? Are you close to retirement and just do not want to risk having a bear market, such as we had in 2000-2002 and again in 2008-2009, decimate your savings by 50-80%?

    If this is you, use the Conservative S&P Timer, which trades infrequently, and only goes to cash to avoid potential long term declines.

    b. Are you an active trader, but uncomfortable with taking bearish positions (betting the market will go down)? Are you unable to trade bear mutual funds because they are not available to you? Many subscribers cannot make bearish trades. If you are one of them, but want to market time with those funds available to you, use one or several of the active strategies. The Sector Fund Timer being one of the most popular.

    If you have access to sector funds, which are available in several fund families (we use Rydex Funds), our Sector Fund Timer is one of the best timing strategies we have ever developed. It is meant to be traded with at least 8 positions (diversification) and is less volatile than you might think. If a sector has a large sell off, it only affects 1/8th of the portfolio. If a sector get whipsawed, again only 1/8th is affected. Which of the 16 covered sectors funds are best? Usually the first funds that turn bullish outperform the rest. Trading the first eight is a good approach.

    Sector funds, when they trend, often move faster and farther then the market in general, and usually further than anyone expects. The potential of the Sector Timer for future profits is huge. We consider this an "Active" timing strategy, but not an aggressive one. Sectors move to cash during declines, adding stability to the strategy.

    c. The Gold Timer, Bond Timer and Small Cap Timer strategies are all "Aggressive". They are single industry timers and should only be used for a "portion" of your investment capital. They should NOT be used for all your trading capital. Gold bugs take note...it is not a good idea to trade only gold funds. They can move against you 10% in a single day.

    Yes, a great deal of money can be made in the Gold Fund Timer when it trends, and over time, gold funds are big winners for market timers. But, if you put all your eggs in one basket, a sharp swing in the wrong direction may scare you out of the strategy. The next move will probably be the one with the huge profits, but you will not be there.

    d. The ETF and Stock Timer strategies are only for traders who understand "Aggressive" trading strategies. If you are such a trader, read the trading instructions on each report. If you are not, do not use these strategies. They often trade every day, and must be actively followed.

    Correctly Using Our Timing Strategies

    Below we will detail a few of the most important rules for successfully trading our timing strategies. We have been market timing for many years and know that following the strategies correctly is critical to success.

    If you, as a new subscriber, follow the rules and give the strategies "proper time" to work, you will not only be profitable, but you will do something few others achieve. You will "beat" the markets.

    a. Commit to a realistic time frame. We suggest one to two years. While your first buy or sell signal may be profitable, it also may "not" be. Often, in a volatile market, the aggressive strategies will have small losses. That is a small price to pay for being certain to catch the big (profitable) trend when it finally materializes.

    b. Try to avoid mid-signal entries. Jumping the gun and entering in the middle of a trade can lessen the effectiveness of the risk management that is built into our strategies. One exception of course is the Conservative S&P Timer. Directions for entering this mid-trade are at the bottom of the Conservative S&P Timer report page.

    c. Take all trades. You cannot pick and chose according to how you feel the market will do. That adds emotion to an unemotional trading strategy. Almost without doubt, you will lose money. You must take ALL the trades so that when the big trade occurs, the one that makes most of that year's profits, you are on board.



    Disclosure: no positions
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