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Tuesday, July 1, 2008

Experiment of Timing Tops and Bottoms (Even at the one minute level )

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Dear readers,

(Tuesday July 1. I did not like the gap down. I am going to see what the market will do and reassess from there. With the gap now closed, and with XLF in 20.36 area, I am taking this off with a small profit. Since my retirement account trades on the hour, I decided to hedge that in my brokerage account by selling it short at 20.36.

At 11:52AM with XLF at 19.85, I took off the short position sold at 20.36 is closed with a profit of $0.51.

Also I wrote yesterday that I will be playing short EUR/USD as a way to play a retreat in oil, and a rebound in equities. I left orders which got filled while I was sleeping. I sold short in area of 1.5815. I am including a chart containing the entry )

(The post below seems to be of interest to a majority of readers, so I thought to bump it up. Please read the other posts as well as they contain information that took place after I first posted the note below)

Please read this post carefully. It has the potential to make you wealthy. If you are a new visitor to this blog, before you consider leaving, I sincerely advise that you think multiple times before doing so. This blog may not look to you as you may have expected it too, but please do not let the looks deceive you.

Let me share with you this. In the last 2 weeks, this blog has called the top of 8 days and the bottom prices of multiple others including the bottom of today. It is in the record of this blog.

In addition, the blogger has called the precise tops and bottoms of many other days in a public forum where the cream of the cream of trader hang.

But let us discuss things that matter to you. First I want to state that the blogger is highly educated (from a formal education point of view, with higher level university degrees), and has his educational background is in the scientific and mathematically rigourous disciplines. I am not stating this to scare the reader, but I did not want to write it or project it in this blog's image precisely because I wanted all readers irrespective of their background to stay, read, learn and return to this blog.

As a matter of fact, you do not need any of technical skills that I possess to do the work I have done, in order for you to benefit from the findings (similar to the case of a driver of a car who does not need to be an automative engineer to benefit from his car).

Let me start with the end first. I started recently an experiment to ascertain whether it is humanly possible to buy bottoms and sell tops on each day using live prices of 1-minute.

Let me show you the odds of nailing the top of just one day if one were to do it based on just luck. In the forex market, which trades 24 hours, there are: 1440 (=24*60) minutes in a forex trading day. In the stock market (cash sesssion, which starts at 9:30AM Eastern US time), there are 6.5 trading hours, and therefore 390 minute of trading.

To sell at the top price of a day in the stock market using 1-minute prices, the probability of one doing it is the product of the probabilities that each one of the prices at the other minutes is less than the price at which one decides that the price corresponding to a given minute is the top price of that day. This probability is:

1. for the stock market: (0.5)^(390-1), which is 7.93E-118
2. for the forex market: (0.5)^(1440-1), which is 6.57E-434

These are tiny numbers, and are extremely small odds.

The conclusion is that if one were to try, by luck, to pick a top (or a bottom) of a day at the one minute level, his chances to be successul are extremely small.

If a man does it relying on luck, that man needs 1.26E117 days, just to get one of the days right. These are a lot of days, and would need multiple lives to make it just once.

THE EXPERIMENT:

I developed some mathematical results and went out to test whether they can help me determine the tops and bottoms of trading days at the one minute level.

I posted my results live in a public forum for multiple months. Many people were impressed, but others could not believe it, even if I were posting my market calls in real-time, and each post has a time-stamp from the forum software which I have not control over.

Some people thought I was bragging as they probably have not grasped the reason of my posting of those market calls. It was not to brag, but to conduct the experiment, and obtain comments from others on its usefulness or lack thereof.

I then decided to start this blog for various other reasons:

1. I wanted to share my findings with a larger audience.
2. I also thought that it may be of help to others to understand trading, and make money out of the market calls.
3. Document the results.
4. Build a network with people like you.

The methods I use work for all instruments that trade and which cannot be manipulated by a small group of large traders. Currencies and major indices and ETFs fall under this category. Individual stocks of small companies do not. But the methods should work for a basket of stocks (large enough in number and in size that they cannot be manipulated).

FINDING:

I am in the process of compiling a report containing the results. The results are impressive, and demonstrate that it is possible to sell tops and bottoms with a probability clearly way higher that the theoretical probability, and I was amazed myself. The results are spectacular.

EXAMPLES:

With this method I have nailed all the major recent tops such as the latest tops on NDX (QQQQ, NQ, Nasdaq 100) : 2050, 2057, and many others that I have to look at the history to recall them all. The history is in the forum (I will upload it here) and also in this blog.

Just in the past 2 week days, I have called to the minute the tops of 8 days, and the bottoms of other days, including the bottom of today on NDX which was at 1829. (Please read my previous post related to trading on June 27 (afternoon) for the nailing of the latest bottom).

HOW CAN THIS BENEFIT YOU?

It can benefit you in in many ways. I plan to share with you many things I discovered, and teach you many things I learned. I have read more than 1000 books on trading, and have developed a lot of insight in addition to my own new findings that exist no where because I developed them.

Let me also tell you that one does not even need all the precision I have tried to achieve to make money in the market. In fact the market is more foregiving than what it could do based on my theoretical results and insight.

CALL:

I urge you to send me an email to add your name on the list of a by invitation only blog, and also in my list of people to who I am writing to share "secrets".

My contact information is below. Just send an email (with or without a subject and/or body), but I would of course read and appreciate any comments and questions you have or simply an introduction about yourself in the area of trading and/or related topics.

Best regards and happy trading,

PS: Send your enrollement email to:

emailfinancialtraders@gmail.com


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Happy trading,

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