Getting Started with the Signals

For the Short Term Signal it is best to wait for the next signal to enter the trade. Although that may require some patience, it is the way to "get in sync" with the signals.

For new subscribers, a dollar cost average approach may be used to establish a position with the Signals if the signal position is "Long" at the time your subscription begins. Of course returns will not be as good as those who captured the original entry point however you still have peace of mind knowing you are investing during a favorable market climate.

Market timing works but it is not always easy.  Keep the the following in mind as you learn to use the signals.

Commit to a realistic time frame. Suggested is to use both signals for different parts of your portfolio and commit to 6 months or a year.

Take all trades for the signal you choose to follow. Try to avoid the tempation to trade according to how you feel about the market. The signals are meant to remove the emotion which studies show is the enemy of the investor.

Know that signals may occasionally go against you. This is normal and should be expected. A look at the trade log will verify that not every signal is correct but over time, they will be correct more often than they are wrong. Realize that even a signal that is correct less than half the time can still produce superior returns to buy-and-hold.

Trade the signal when it is issued or as closely to the trade date as possible. Signals are sent the evening before the trade. Returns quoted at the web site are based on opening prices on the day following the signal but know that even if you miss the opening, the returns are nearly identical over the long term when traded at the end of the trading day.

During a trending market there may be few or no signals, but during a sideways or non-trending market, multiple trades per month may occur with the short term signal. This can be frustrating but is a necessary and normal phenomenon as the signal attempts to capture the next developing trend. Like anything good in life, you must stick with it even if the first signal you use ultimately results in a small loss. 

In the event of the occasional, more than normal drawdown, you might consider a stop loss. Although backtested results on this site don't use a stop loss, you might consider an 8-10% drawdown as the point where you move to cash until the next signal occurs. 

 

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