Advanced Cycler Bulletin – 140208
This bulletin is primarily for people who have done the Advanced Cycles course.
Current Dow Phasing (Since July 2013) The Dow made an all time high 31Dec13 at 16588 and has followed the road map suggested by my phasing that has been on the home page of this site since July 2013 when I forecast a probable low “about March 2014”. Here is what I was looking at:
Here is an updated chart:
Notice the 20 week low that turned out to be 9Oct13 was forecast to be 7Oct13. Based on cyclic understanding I had a point at which I knew the phasing was wrong (break into new all time highs in January 2014 before we got a substantial drop). That scenario would have meant I would have had to re-phase. The preliminary attempts that I had made suggested that there was no obvious alternative and that this re-phasing would have been difficult. This added to my confidence that the phasing I had was 'best' - and it turned out to be 'right'. I say 'right' in the context of it being profitable in the paper trading (and of course in my private trading).
Paper Trading – Six months of ‘Publically’ Traded Results Returning 6,388%pa As usual, all calls were made ahead of time. Could the result have been better? Yes – in hindsight!!! But let's put that in context. Check out 'Return on Investment'.
Summary of Results
THAT is world class - if you don't mind me saying so. And with no profit compounding!
JM Hurst’s Thoughts on 2,400% Return Per Annum Here are pages 9 and 10 of The Profit Magic of Stock Transaction Timing by JM Hurst that are referenced below:
In Profit Magic, Hurst starts off on page 9 asking, “Can a $10,000 investment yield $1,000,000 in a year? In 5 years?” Let’s put these into (simple interest) percentage terms: Hurst goes on to say that a return of “10% per month [is] well within the realm of possibility. Compounding profits at this rate, such a yield can return $1,000,000 on a $10,000 investment within 50 months”. Again, in percentage terms: Hurst (still on page 9) refers to the trading experiment contained within Profit Magic and quotes “8.9% yield per transaction – every 9.7 days. Such a yield, if continued, compounds $10,000 to $1,000,000 in 15 months”. Back to percentages: NOTE: There is a difference between simple interest and compound interest. I have chosen to quote simple interest here. There is no doubt that profit compounding assists substantially with the sort of huge percentage returns being quoted by Hurst – but compounding returns only works with a methodology that provides good profits and a high win rate. On page 135 the success rate quoted in the trading experiment was 90.5%.
“Why Isn’t Everyone Getting 2,400% per Annum?” asks JM Hurst With a wry smile I note that JM goes on (page 9) to say “If such results can be attained in the market – why isn’t everyone doing it?” (His emphasis, not mine.) Then he answers that question. He tells you why and how. If you haven’t read Profit Magic lately and want a 2-page reminder of what is possible then I commend pages 9 and 10 to you ##(see following scans p9&p10). The key that you might not notice is his statement “We will turn our backs firmly on all clichés, adages, and market lore that will not stand critical scrutiny.” He is making clear reference here to focusing on what has been proven to work. Listening to other people’s opinions about what might happen or how or when to trade is NOT what Hurst was doing. He adamantly states that YOU need to do the work. Importantly, he states “all of these obstacles can be overcome” (his emphasis, not mine) meaning YOU can do it.
Keillorometer – Two New Proprietary Leading Indicators Based in Physics Hurst spent nine years researching the material presented in Profit Magic (page 9). On page 10 he indicates that material (chiefly in the Appendix) is provided “to permit those so inclined to repeat and carry forward the research on which this book is based”. I have been working on carrying forward Hurst’s research. In the main I have proved up his material but I have been investigating areas of concern. I am not convinced that Hurst considered large enough cycles in his nominal model and so he abdicated to ‘fundamentals’. I am also not convinced that his ‘linear’ amplitude model works – even up to the 4.5 year cycle. More on these matters another time. Of late, I have been further applying the laws of Physics (which is what Hurst did) to cycles in the markets. I am now on the verge of releasing two proprietary indicators K2 and K3. K2 leads price and K3 leads K2. When I have completed the research on ‘best’ settings I will offer a short course (probably a day). Can you believe after years of pooh poohing ‘indicators’ I have developed not one but two? Time is a leading indicator of price and so too are K2 & K3. Email if interested to get your name on the list.
The Elements of a Good Trading Plan There are many components to the paper trading plan presented in Advanced Cycles: I have now conducted eleven Advanced Cycles courses and 9 out of the 11 have shown substantial profits. The losing campaigns had small losses and losing campaigns are part of trading. All campaigns were conducted with NO reference to fundamentals!!!! Now, where is your head at???? What more do you want???? Hurst talks large ‘unbelievable’ per annum returns after a trading experiment that lasted a month and I am repeatedly demonstrating similar large returns publicly traded over 6 month periods. When I came across this material, what I wanted was as much information I could obtain. The other thing that I had partially done - but this material confirmed it for me - I dismissed ALL other approaches, cancelled all news, newsletters, advice services, blogs, forums, emails, etc. Fundamentals, Gann, Elliott and other guru input were actively avoided. I realised it was all 'noise' and I simply did not have time to waste on such meaningless drivel. I couldn’t abdicate the responsibility of market knowledge to others. I needed to take responsibility and FOCUS on what worked. There is nothing successful out there being used in the markets that can't be explained in cyclic terms. Those using successful methods might not know about cycles. I have simply not yet come across anything that works that does not directly relate to cycles.
The Importance of Right Psychology The thing that I have that you may not have is 'right' psychology. This is a much underestimated and poorly understood part of trading. Harping back to pages 9 and 10, here are some excerpts relating to psychology: It is interesting that my WEA course with the largest numbers is ‘How Do I Trade Forex’ and the course with the lowest numbers is ‘Psychology of Trading and Investing’.
WEA Courses Saturday 22 and Sunday 23 February 2014 I have a set of WEA courses running Saturday 22 and Sunday 23 February 2014. If you know of people who you think would do well to consider what I offer then feel free to reference this bulletin by passing on the email that got you here. They can get WEA information here: http://futuremechanix.com/weacourses.html. My private courses are listed under Courses on the menu above including the Advanced Cycles outline (or click here: http://futuremechanix.com/acoutline.html). While you are here on this site you might like to click around. Enjoy the journey,
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