Rules For Market Timing Success

There are several critical factors needed to be a successful market timer.

It is not just a piece of cake. Money does not accumulate in your account without some work on your part. In fact, market timing means pitting your emotional skills against those of the tens of thousands of other traders.

Of course most who invest in the stock market "lose" money. They follow the herd which usually buys and sells at just the wrong times.

The "herd" does this for a reason. At the time they make their decisions, they "think" they are right!

This means, for "you" to be successful, you must be able to see past those urges to buy and sell, which will happen to you just as they happen to everyone else. If you can do this, you can succeed at market timing.

Here are some important (critical) rules for market timing success.

You Must Have An Edge

We have discussed this in previous commentaries. You must have a proven trading "edge" that puts you into profitable positions.

FibTimer strategies define "trends" and trade them, in both advancing and declining markets, with great success.

Research shows that the financial markets trend about 80% of the time. Our strategies exploit that knowledge. We care nothing about what newscasters say, what the latest economic indicator is. The "trend" is where the profits are, and that is where we are.

Disciplined Execution

Having an edge is great, but if you cannot stick to the strategy that uses it, you will not be profitable. The urge to follow the crowd is enormously powerful.

For example, let's say the market is in the midst of a two day super rally. You just KNOW the current sentiment is correct. You can feel it.

But your timing strategy is not letting you follow the crowd, so you exit the strategy and go your own way.

You have just joined the "herd." All too common, and usually it results in a loss.

Effective Money Management

The most common error made by new market timers is to place too much money into a single aggressive strategy right away.

All timing strategies have losses. good ones keep those losses small. But aggressive timing strategies are, as their name implies, "more" volatile than more conservative strategies, and drawdowns can be larger.

"FibTimer has battle-tested timing strategies which have gone through every kind of market condition imaginable."

A new market timer, faced with a rather large drawdown in an aggressive strategy, is very likely to be an ex market timer.

They could have beaten the market if they had stayed the course, but the aggressive nature of the strategy they chose caused them to panic and leave.

Good timing strategies, such as those followed by FibTimer subscribers, control losses and keep them small. They will also identify trends and keep you in those trends until they end, thus capitalizing on as much profit potential as can be realized.

There is an old saying, "keep your losses small and let your profits ride." If your timing strategy does this, you will be profitable.

You Must Have A Plan

This is where FibTimer enters the picture. We have battle-tested timing strategies which have gone through every kind of market condition imaginable, including the bear market of 2000-2002 which chopped 80% off the Nasdaq.

By using our "edge" (trends) we are able to effectively profit in both up and down markets, while controlling losses in volatile sideways markets.

Commitment

You must have a determination not to quit when things are not going your way.

I have learned in life that those who succeed in any endeavor have made a commitment to seeing it through both good times and bad.

We began timing the markets all the way back in the early 1980s. It was trial and error back then, but we had committed to profiting from the financial markets, and that is exactly what we did.

The same commitment, and following time tested strategies such as those used at FibTimer, are the keys to success.