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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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  • Are You Trading The Markets? Or Are The Markets Trading You?

    Markets go up and markets go down. It shouldn't matter much, but many new market timers (and traders) find that their own personal mood fluctuates with the markets, moving from extreme euphoria as the markets soar to new heights to deep despair when the markets plunge to new lows.

    Why do market trends have such power over emotions?

    They don't need to, but many new timers have difficulty cultivating an objective mind set. They allow fear and greed to influence their trading decisions.

    They tend to follow the masses, and when they go with the crowd, they soon find that market trends not only influence their moods but their account balance as well.

    Following The Crowd

    There's a strong tendency to follow the crowd. There is a feeling of safety in numbers. When you see a steady upward trend, you feel secure. Everyone is buying. They are all doing the same thing.

    When other people offer confirmation of your decisions, you feel safe and assured.

    In a bull market, it isn't so bad to follow the crowd. When it's a strong bull market, the crowd is often right, and it makes sense to follow them.

    However, when the market turns around, feelings of safety and security can turn instantly into fear and panic. Why? An obvious reason is that many new market timers don't have the ability or financial resources to sell short, and take advantage of a bear market. But there's a psychological issue as well.

    It is difficult to know how to handle falling stock market prices. For example, humans tend to be risk averse. When one is going long and the markets suddenly turn, it's hard to accept losses, and sell off a losing position before more damage is done.

    Denial and avoidance set in. At that point, a trader with a losing position panics, hopes that things will turn around, and waits for events that are unlikely to happen.

    Usually the price continues to fall, heavy losses are incurred, and as expected, disappointment and despair set in.

    Emotions And Decision Making

    It's crucial for your success as a market timer to stay calm and objective. Don't let your emotions interfere with your decision-making.

    How do you stay detached and relaxed? First, it's important to accept the fact that you'll likely see losses as a timer and that you should expect to see the markets turn against you. Small losses are an unavoidable part of dealing with the stock market. The trick is, keep them small.

    Follow a proven trading strategy and stick with the plan.

    Don't allow your moods to fluctuate with the ups and downs of the markets. By trading in a disciplined, methodical manner, you can cultivate an objective, logical mind set that isn't overly influenced by market moods.

    Armed with the right mind set, a disciplined trading approach, and a trading strategy, you will be able to realize over time, the profits of successful market timers.

    Mar 28 11:43 AM | Link | Comment!
  • Markets Go Up, Markets Go Down

    Markets go up, markets go down.

    It shouldn't matter much, but many new market timers find that their own personal mood fluctuates with the markets, moving from extreme euphoria as the markets soar to new heights to deep despair when the markets plunge to abysmal lows.

    Why do market trends have such power over emotions?

    They don't need to, but many new market timers have difficulty cultivating an objective mind set.

    Following The Masses

    By allowing fear and greed to influence their trading decisions, new traders tend to follow the masses, and when they go with the crowd, they soon find that market trends not only influence their moods but their account balance as well.

    There's a strong tendency to follow the crowd. There is a feeling of safety in numbers. When you see a steady upward trend, you feel secure. Everyone is buying.

    They are all doing the same thing. When other people offer confirmation of your decisions, you feel safe and assured.

    In a bull market, it isn't so bad to follow the crowd. When it's a strong bull market, the crowd is often right, and it makes sense to follow them. However, when the market turns around, feelings of safety and security can turn instantly into fear and panic.

    Humans Tend To Be Risk Averse

    Why? An obvious reason is that many new market timers don't have the ability or financial resources to sell short, and take advantage of a bear market.

    But there's a psychological issue as well. It is difficult to know how to handle falling stock prices. For example, humans tend to be risk averse.

    When one is in a bullish position and the markets suddenly turn, it's hard to accept losses, and even harder to execute that sell signal, issued by your timing strategy, before more damage is done.

    Denial and avoidance set in. At that point, a market timer with a losing position panics, hopes that things will turn around, and waits for events that are unlikely to happen.

    Usually the price continues to fall, heavy losses are incurred, and as expected, disappointment and despair set in.

    Detached And Relaxed

    It's vital for your survival as a market timer to stay calm and objective. Don't let your emotions interfere with your decision-making.

    How do you stay detached and relaxed?

    First, following a non-discretionary timing strategy and knowing, absolutely, that over time it will be profitable, helps you to rise above strong emotions and allow the strategy to make the decisions.

    Second, accepting the fact that you'll likely see small losses as a market timer and that you should expect to see the markets turn against you. What is important is NOT to react like the rest of the crowd. Staying above the fray is the key to profitability and knowing that the money management rules built into your strategy will keep losses small and allow profitable positions to run as high as possible.

    Third, think of the big picture; the long-term profits across a series of trades are all that matters, not the result of a single trade.

    Develop A Logical Mind set

    Don't allow your moods to fluctuate with the ups and downs of the markets.

    By trading in a disciplined, methodical manner, you can cultivate an objective, logical mind set that isn't overly influenced by market moods.

    Armed with the right mind set, a disciplined trading approach, and a tested market timing strategy, you will be able to realize the huge profits of winning market timers.

    Mar 21 7:41 PM | Link | Comment!
  • Being Right? Or Making Money!

    When a market timer (or any trader or investor) makes a trading decision based on a news event, fear of losing out on a rally or of losing money in a sell off, or even the stock broker neighbor's trading tip, he or she is trading on emotions.

    Wishing Your Were Right

    Trading on emotions, news events, market rallies, etc. is basically trading on a WISH.

    There is no basis for the trade, at least none that can be counted on to last. There is nothing but "the moment." The trader wishes he or she will be right.

    Odds of winning? Slim.

    Trades made on wishes have no plan behind them. There is no exit strategy. Invariably, the trade is held until losses become painful enough to force the trader to emotionally sell at a loss.

    In fact, probably the worst thing that can happen is for a market timer to make a trading decision based on such an emotional event, and then be profitable the very first time!

    Not that there is anything wrong with being profitable. But very soon that same trader will be looking at a losing trade, and the confidence of that first win is likely to cost him or her dearly.

    Making Money

    No one makes money on Wall Street without a trading plan. No One!

    Sure, the person with an initial profit can feel great for awhile. And really, really long term investors, those who can afford to watch several bear markets whack 50% to 80% off their savings every 10 years or so, will eventually make money.

    When we say long term, we mean 20 to 30 years! If you sit tight, you will likely make a profit. That is, as long as you do not panic and sell at a bottom. or become greedy and "double up" with margin (almost always at market tops). And, as long as you do not reach retirement age at the same time a multi-year bear market starts.

    There is only "one way" to be certain of being profitable.

    By having, and following absolutely, a finely tuned trading plan that capitalizes on "trends" in the stock market.

    Market timers who have a strategy for entering and exiting positions, and who follow their rules, on a timely basis without hesitation, make money.

    Those who trade by daily news events, daily or weekly rallies & declines, and TV hype, will "always" end up losing money. Remember, for every winning trade in the stock market, there is a losing trade on the other side. Only those who follow a plan consistently make the winning trades.

    One of the most important questions you must ask yourself is:

    Do you want to BE RIGHT for a short time. Or do you want to MAKE MONEY for a long time.

    Winning Market Timers Know the Secret

    Ignore the news. Ignore the daily ups and downs. You have no control over them anyway. No one knows what the next day will bring. No one!

    Wishing will not help. Watching the financial news religiously will not help. There is just no way to know what will happen tomorrow, or even what will happen next week.

    But a successful trading plan that creates unemotional buy and sell decisions will, over time, make even the most emotional person, a successful (profitable) market timer.

    At FibTimer, we provide the plans. All you need do is follow the signals.

    But a few simple rules do apply.

    1. Subscribers should make sure they know how each of our timing strategies works. Read the details and trading rules at the bottom of each report. They will help you build confidence in the trading strategy.

    2. Be sure you know your own emotional ability to handle trading. Aggressive strategies require more trading. If this keeps you up at night worrying, consider one of the active or conservative strategies. Remember, you do not need to trade aggressively to do well, you just need to follow the buy and sell signals diligently.

    3. Subscribers who are new to market timing should not jump right into an aggressive timing strategy. No matter how positive you are that aggressive timing is for you, it is better to start with something a bit tamer in the beginning.

    4. Diversify. It is not a good idea to place all your timing funds in one strategy. Consider three or even more. Or follow our Diversified Portfolio strategy that breaks up your timing into five different positions.

    Build confidence by starting slowly. When you are confident, you will follow the signals. And following the signals is the key to being profitable.

    Mar 15 1:08 PM | Link | Comment!
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