Some notes on timing - StockMarketMirror way.

Notes on the stability of timing signals:

Traders usually have experience with the classical timing software, where timing signals are derived from moving averages in more or less sophisticated way and therefore, once calculated, they are stable. The learning time frame is represented by the number of trading days used to calculate the longest moving average (preceding the trading signal). This has its advantages such as stable trading signals and disadvantages such as lagging trading signals.

In the case of StockMarketMirror software the whole visible time frame is used to calculate the latest timing signal and thus yielding timing signal with very little lagging. Visible time frame must be long enough to enable reliable timing calculations. Therefore visible time frame is giving space to number of auxiliary timing signals inside the visible time frame to be calculated as a natural outcome of the proprietary timing method. Natural and inevitable consequence of this method is that auxiliary timing signals inside the time frame are calculated with inclusion of future data in respect to the position of the individual auxiliary timing signals. But these are only past timing signals that cannot be used in the real trading any more. Their position may somewhat change (even disappear) during next calculations with new trading data. New trading data represent the source of new experience for the timing algorithm which in turn may yield improved timing signals. To evaluate the timing algorithm, it is better to compare the forms of calculated bullish activity curves then to evaluate the precise positions of the past timing signals.

Notes on whipsaw behavior of the timing signals:

Automatic trading signals are subject to fluctuations which are due to great number of reasons. Therefore automatic trading signals must be used with a little bit of common sense. That means, only genuine trading signals should be used for trading. Genuine BUY signal is that, triggered when bullish activity curve is ( steeply ) advancing. Genuine SELL signal is triggered when bullish activity curve is ( steeply ) declining. When you obey some genuine BUY signal to enter the market, you have to wait for the genuine SELL signal to exit the market. You have to use stop loss orders to prevent great losses on your investment.

Notes on timing of ETFs:

ETFs the best suitable for timing calculations are those having components as stock symbols of real companies, recognized by YAHOO! stock data server. List of ETF components is used to define new data source by using corresponding command of StockMarketMirror software and this new data source is later used for timing calculations. Resulting genuine BUY-SELL signals are to be used for trading of the given ETF.
Exchange traded funds like EEM, EFA and more, do not fulfill this components assumption and therefore they era not suitable for this approach to timing. They are composed from number of national indexes of numerous countries and therefore their components are difficult to trace. But there is a great number of US ETFs which can be used for this way of timing. Number of them is already available with my StockMarketMirror software as default data sources, and they give good prospect of profit. New data sources can be defined by user in the case of need as it was mentioned above.

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