This brief report is designed to advise those who may have an interest in systems, methods, or services which predict market turning points 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 personal choice. CSI has no preference for one commercially available procedure over another. We simply wish to point out facts that may be helpful.

If I were to tell you to “Pick any date in the future, for any commodity, and I will show you the next turning point that will occur relative to that date.” You might think I’m crazy, or strongly doubt my claim. The truth is, that anyone can do this within an accuracy of, say, three days about 70% of the time, or within four days 80 to 90 per cent of the time.

The secret depends upon how one defines “turning points”. 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. With a dart and a calendar into the future, the dart will hit some seven day time interval (the day hit plus or minus three days) each time it is 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 three 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 in 1997; 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 given predominate 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 system, be careful to discover what you can do under purely chance conditions without it.

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Most losing day trades last approximately 45-minutes on average, when the trader finally exits out of the losing trade. That’s because the trader relies on hope once he sees the trade losing money. The trader hangs-on to the losing trade position relying on hope the market will change trend and turn in his favor. However, eventually the equity loss becomes too large which finally forces the trader to exit the trade and take a big loss rather than possibly lose even more money by hanging on even longer.

Are you wondering how this little known information can help you trade the markets profitably? The short answer is at the end of 7-minutes in the trade you might consider getting out regardless of the fact your profit target was not hit or you have a loss at that time, keeping in mind the more past 7-minutes it goes the less likely the trade will be a winner.

Most successful daytrades last approximately 7-minutes. That typial trade duration assumes the trader is using a reasonable profit objective and exiting the trade as his profit objectivegets hit.

Most losing day trades last about 45-minutes. That’s because the trader relies on hope once he sees the trade looking like a failure. So he hangs on to the losing trade hoping it will turn, finally the loss becomes too big forcing him to exit the trade after being in the trade for a much longer time than originally anticipated, mostly due to relying on hope.

How many trades are needed for good statistical validity?

Lots of stocks and commodities traders ask how reliable their track-record may be as far as statistical validity goes. They may see some statistics on seasonal trades showing a market was mostly uptrending from April to June during 12 of the last 14 years, for example. The same traders may have experience with their own trading system showing 8 of 9 winners following say a 5-unit moving average crossing over a 9-unit moving average.

None of those scenarios are valid from a statistical validity standpoint. That’s because according to mathematical experts and statisticians a minimum of 30 occurrences are needed for good statistical validity. Please keep this in mind when evaluating a trading system or trader metholodology. Anything less than 30 samples will not be statistically accurate.