This special report is designed to advise those who may have an interest in trading systems, methods, or trader services which predict market turning points, such as stock market or futures markets, far into the future. If you have been solicited by any firm that does this, you may gain some important insight into this area by reading on. Whether you plan to purchase such a service, system or secret is your choice. CSI has no preference for one commercially available system vs another. We simply wish to point out facts.
If I were to tell you to pick any date in the future, for any commodity, forex or currency market and I will show you the next turning point that will occur relative to that date you may think I am either crazy or strongly doubt my claim. The truth is anyone can do this within an accuracy of, say, 3-days about 70% of the time, or within 4-days 80 to 90 per cent of the time!
The secret depends upon how one defines 'turning points' For example, let us suppose we define intermediate market swings or turning points to occur about 25 times per year, or twice per month. Since there are about 250 trading days per year, this allows for one turning point per 10-days.
Using a dart and a calendar into the future, the dart will hit some 7-day time interval (the day hit plus or minus 3-days) each time it's thrown. If turning points occur, on the average, once every 10-days, then there is a 70% chance my dart will include a turning point within 3-days.
Additionally, if I knew that last week there was a definite low, my next turning point will be a peak. I'm not interested far into the future as I may not live that long. I can only make money if I can bet on the next immediate turning point for various cycle lengths.
There is not enough room in this newsletter to show how market turning points can be predicted with more reliability, but it is possible to provide an unbiased estimate of the next peak and the next trough for each major time cycle period. Using a method which treats peaks independent of troughs can produce a non-regular period between peaks and troughs (a more realistic behavior) for future market cycles.
Before spending your hard-earned funds on any trading method or system, be careful to discover what you can do under purely chance conditions without it. Article originally written by Bob Pelletier, President of CSI and CSIdata.com. Used with permission. For more information about commodity futures trading, CSI market data or trading systems. please visit webtrading.com
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