In the early 1900s when asked what the stock market will do, J.P. Morgan responded, “Stocks will fluctuate.” The implication of this quote is that no one can predict the future of the markets. I believe that while no one can predict the future, I have always been interested in conducting an actual live test of some of the more popular trading systems discussed in the media to see if the average person can create a set of rules that increases the probability of positive returns while reducing risk. To do so, one would have to understand the markets, and support/resistant levels. These are the areas where institutions will come in to support the market. We, as individual investors, cannot move the markets, but the institutions can…and do.
As J.P. Morgan said, stocks do fluctuate, but there are well documented consistent seasonal trends. The research here is focused on observing if a clearly defined rules-based system can successfully move into the markets when favorable conditions exist, and exit when they don’t. The systems being tested are focused on seasonal patterns, market conditions as measured by the internal volume of shares being traded, and support levels identified by simple technical analysis. A successful system is not one that wins every time but does demonstrate over time the ability to win more often than it loses.
Mission: Research and test a simple set of clearly defined rules-based trading systems commonly mentioned in the media and measure their performance over a period of 3, 5, and 10-years.
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IMPORTANT!!!! Notice & Disclaimer about any and all content I create, send, or share with anyone, in any form regarding this research:
This is research. This is not investment advice. I cannot be any clearer about this. I am researching these systems to document their performance in real-time over a period of years for further research. Be aware that while these systems are commonly referred to in the media, the strategies involved may not be suitable for your situation or risk tolerance. I am not offering YOU investment advice. I am merely conducting research on the viability of these strategies and documenting them for future research.
I will not be liable for any loss or damage whatsoever (including human or computer error, negligent or otherwise, or incidental or consequential loss or damage) arising out of or in connection with any use or reliance on the information derived from this research. The previous statement is here not only because the lawyers insisted, but because it is true. Consider that I have no idea what your financial goals may be, I am unfamiliar with your risk tolerances, I do not know your personal income, age, savings, financial circumstances, dependents, net worth, what tax bracket you are in. Heck, I do not even know where you live in. There are some people who would find these things quite relevant.
I am merely researching alternative options for viewing the markets and documenting it for further research.