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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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  • When Your Money Is On The Line... When Your Money Is On The Line...

    The winning market timer is cold, calculating, and unemotional.

    Sound a bit unreal? Maybe it is, but the reality is that it is important to control your emotions, rather than let them interfere with your trading decisions.

    We have written many, many times about fear and greed and how they are the true motives behind market behavior. Fear and greed may control the masses, but if they are allowed to control you, you become one of the millions who can't understand why they cannot make a profit when, supposedly, everyone else is.

    There are also other emotions, such as anger and disappointment, that can influence your decisions. Emotions may interfere with discipline and sound decision-making.

    But, they are not "all-powerful". You CAN master and control them.

    Fight Or Flight

    It is reasonable to be fearful when your money is on the line.

    That is why winning market timers protect themselves by trading with a detailed market timing strategy. Timing strategies are NOT affected by the emotions of the masses, and they are also designed to manage risk.

    When you KNOW your strategy works over time and also is designed to minimize risk, you can execute the buy and sell signals effortlessly and with less fear. You do not fret over the inevitable losing trade.

    Instead you are excited about the next trade. You KNOW that next big winning trend is coming. Whether it begins tomorrow or in several months you trade with the knowledge that when it begins, "you" will be one of the winners who capitalize on it!

    This is why trading with a specific timing strategy is critical. The moment you deviate from the strategy, you become one of the masses. But if you stay with the plan, you USE those same masses to your advantage.

    Anger And Disappointment

    Anger and disappointment are two additional emotions that powerfully influence trading decisions.

    Both emotions concern expectations about our market timing performance and how we expect the market to behave.

    We become angry when things don't go our way. Because we want to win, we hope that the market will behave in a manner consistent with our timing strategy.

    When we feel that fate, or some unidentified external forces (i.e. news events) have created a situation that thwarts our plans, we become angry.

    When we think we ruined our own plans because of our incompetence, we feel disappointed.

    Regardless, there's a natural inclination to want to control our destiny, and when it comes to market timing, we want to control the market.

    We may want to impose our will onto the market.

    The market, however, can not be controlled. One must accept what the market has to offer. You cannot make the market do what you want it to do.

    Acceptance Is Key

    If you accept that you are powerless over market action, you will be less angry or disappointed. If you anticipate and truly accept the fact that the market can, and often will, go against your timing strategy, and that it isn't personal, you will not be fazed by it when it happens.

    You will just accept it, and move on.

    If, on the other hand, you expect the market to move in your favor, you will feel angry and disappointed, which often leads to feelings of revenge or despair.

    These emotions can be paralyzing. It is better to accept the market for what it is. Accept the results you achieve, good or bad, and just move on to the next trade. A good timing strategy is not profitable on every trade. No strategy is.

    But if you quit because you are angry or disappointed, think how you will feel when the next trade is the start of the next big and profitable trend!

    Emotions are a natural part of trading. The markets don't always meet our expectations. If you accept this fact, you will be able to minimize the influence of emotions.

    You will then follow your timing strategy and over time, will achieve the results you desire.

    Those Who Leave Never Achieve

    Those who leave never achieve. All they do is chase the promises of supposed market experts who will take their money, but seldom ("never" is a more accurate word) give them the profitable results they desire. There are hundreds of them out there making promises so ridiculous we are embarrassed to even print them.

    Fibtimer does not post inflated (or back-tested) timing results like so many of our competitors do. We have years of trading behind us as well as years of posted real-time trading history. All subscribers have full access to all trades and trading history.

    Our posted results have actually been realized by those subscribers who faithfully followed our trading signals in real-time trading.

    Stick with the plan and you will succeed.

    Jul 03 12:44 PM | Link | Comment!
  • Making Sense Of The Stock Market

    When a person decides to enter the financial markets, he or she brings years of personal experiences with them. Those experiences are usually a detriment to profiting as they are based on one's life experiences. The financial markets, as well as all freely traded markets from stocks to commodities, from currencies to tulips, behave in a much different manner.

    Typically, when we first learn how to trade, we study the markets and try to develop our own personal theories about how the markets work. Because we don't actually conduct formal experiments though, we fall prey to psychological biases.

    Those same personal experiences, built over a lifetime, which helped us to advance and learn in our world, wind up being the very reason many traders fail to profit.

    False Consensus Effect

    One of these psychological biases is the false consensus effect... we tend to wrongly think that others believe what we believe and do what we will do, but that's only our perspective and it can mislead us.

    Why is it difficult to anticipate what people will do? Part of the problem lies in the fact that we are mere mortals. Humans have a limited capacity for understanding complex information. In some ways, people can process information better than a computer, but in other ways they cannot.

    The false consensus effect is one of those rules of thumb that may bias our decisions. No matter what decision you ask people to make, no matter how important the issue, and no matter what choice is made, social psychologists have demonstrated that people over-estimate the number of others who agree with them.

    There is a natural tendency to believe that our decisions are relatively normal, appropriate and similar to what our colleagues and peers would do in a similar situation.

    We use our decisions as an "anchor" and evaluate what others would do based on what we would do. Decisions based on "our" life's experiences. Our biases. Our interpretation of events and their consequences.

    This decision-making bias can contribute to feelings of over-confidence. Once we make a decision, we tend to be confident that we are correct and that others will agree with us, but had we seen the situations from their perspective, we may see that they would behave quite differently.

    Anticipating What The Masses Will Do

    Many market timers try to anticipate what the masses will do. Will they buy or will they sell? The crystal ball method of timing.

    But this method has a long history of lost fortunes behind it. In fact this is the method that gives market timing a bad name. No one knows the future and even though they may make a lucky pick, getting the future right again and again is impossible

    You cannot predict precisely how people will react to world events, economic changes, etc.

    But there is a method of timing that has worked for many years and will continue to work.

    The Very Best Timing Strategies

    The very best market timers follow market trends. They wait until the trend in confirmed and then climb on board, riding it as long as it lasts. If the trend fails, and some always do, they exit quickly and await the next trend.

    This follows the old market saying, "cut your losses short and let your winners run." Everyone has heard it but so few are able to adhere to it.

    That is why we follow trends here at Fibtimer.com. We do not try to forecast the future like other timers do and usually fail at. We identify trends and take positions accordingly. If the trend fails we exit quickly. If it continues, we ride it to the end. That could be weeks, or even months as profits accumulate.

    Following a carefully defined trend following strategy is the only sure way to be certain you will be in the right position, at the right time, when the markets take off in one direction and stay in that direction.

    Emotions should have no place in your decisions and they absolutely have no place in ours.

    Unemotional buy and sell decisions, generated by tried and true trend timing strategies, are the certain road to profits.

    Jun 27 12:20 PM | Link | Comment!
  • Aiming For The Moon!

    We have all seen the various headlines, ads and marketing hype.

    "Use Japanese Candlesticks to spot reversals!" "Learn the secrets of the Pros." "Learn when to take profits." "Learn how to forecast reversals before they occur!"

    The problem is that you cannot spot reversals or changes in trends until "after" they have occurred. No one can, although many profess to be able to do so.

    Those who profess to have the ability to call reversals and changes in trends "ahead of time," also expect you to believe they have the ability to "predict" the future.

    After well over 20 years of market timing experience, please take our word for this... No one can predict, with any certainty or consistency, what the market is going to do.

    Of course with so many analysts making predictions on a daily basis, someone will get a prediction right. But doing it consistently is something else again.

    No one can predict, with any consistency, the future.

    All we can predict with any certainty is... the markets will constantly change.

    So if there is no way to predict what the markets are going to do, how do we time the markets?

    By trading the medium to long term trends that are inherent in free markets and always will be. Based on hundreds of years of history, markets will usually be in an up trend or in a down trend for sustained periods of time.

    Look at any long term chart and it will be obvious.

    That is a fact. From that fact, a winning strategy can be created.

    The Question Of Time Frame

    How do we establish a trend has started?

    Simply put, all we can depend on in the stock market is price. Price will change either up or down. Change is constant. If price moves higher for a sustained period of time, we are in an up trend. If price moves lower for a sustained period of time, we are in a downtrend.

    The question of time frame quickly enters here as mutual fund timers cannot, by definition, be day traders. So a change in price to the upside, lasting several hours, while it may be an up trend to a very short term oriented trader, is useless for a fund timer.

    The time frame for fund timers is in weeks and months, with an emphasis on "months." There is no way around it. If a fund timer trades more frequently, he or she will face a much larger percentage of losing trades because the markets change so quickly from day to day that short term trends are much harder to trade.

    But remember what we said previously... history shows that trends do occur in the markets that last months and even years. In fact, the stock market is trending in measurable medium to long term trends about 80% of the time.

    Long term trends that are easy to see on historical charts. They can also be traded with a high degree of profitability, over time, by using trend trading strategies.

    As Trend Traders We Aim For The Moon

    Trend traders, as we at Fibtimer are, do not try to catch exact tops. Nor do we try to catch exact bottoms.

    We do not believe that anyone can.

    Of course with hundreds of different opinions available at any time, someone will always be lucky and call an exact bottom or top. The financial news media is quick to go with the hype.

    But try and do it over and over and over.

    So how do trend traders know when a trend and begun?

    The answer is... "after" it has started. Using prices, which are the only measurement of the markets that can "always" be depended upon, we can create specific trading rules that define when we are in a trend.

    We could say that if the market rises a specific percent from a low, that we are in an up trend. At that point, we can take a long, bullish position.

    But when do we exit? Do we exit after we have a 10% return? Or maybe set a goal of 20% and cross our fingers?

    No... as trend timers we aim for the moon. If a trend goes 200% we want to be on board it from our entry point, right to the 200% point. We want it all.

    But, then how do we know when to exit? The answer is simple...

    Going For The Home Run

    We exit "after" the trend has ended, and not until then. That means we stay until "after" the trend reverses.

    When we start the trade, we go in looking for a home run. The sky is the limit.

    We do not exit the trade until the market reverses and "prices" have moved far enough in the "opposite" direction to tell us a "new" trend has likely started.

    That means we usually don't get in an exact bottom. It also means we usually don't get out at an exact top. It means that sometimes we take small losses when our requirement is met for a new trend, if the trend fails (and they do... remember the 20% of the time when the markets are NOT in a trend).

    But most importantly, it means we "never miss" any substantial trends, and we ride every trend as far as it will take us! All identified trends are traded. All of them.

    This is where market timers make their big profits. They do go through occasional boring sideways markets, but when the market does trend, they are "always" on board for the majority of that trend.

    By always going for the home run, trend traders, like baseball players, may have some strike outs (small losses). But those strike outs are obliterated by the home runs which we ride for all they are worth.

    In the aggressive strategies, we make money in both up trends and down trends. These are the strategies that score big during bear markets. But sometimes bear markets are far apart... this is where our active and conservative strategies do best. They go to cash (money market funds) during down trends.

    And importantly in all our timing strategies, we cut our losses when a trend does not follow through.

    Great fortunes are made trading trends. It takes a strategy. It takes discipline because you must stick to the strategy in all market conditions knowing that no one knows when the next trend will start.

    But by trading trends, you know that over time you will beat the markets and be hugely profitable.

    Jun 20 7:07 PM | Link | Comment!
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