How was your system designed?
Our trend timing system is a combination of both technical analysis and contrarian investment. We at Nasdaq Wizard composed and analyzed over 900 graphs (through information inputted into Excel), in addition to filling up over 200 spreadsheets based on the common characteristics of a market top or bottom. We then applied the results and after several months of work learned that our long-term system would have triggered the results shown on the long-term homepage. Our system uses over 100 different factors to initiate a change in signal and once the new signal is in place, we have a "checking system" that uses an additional 70 factors.
Most systems fail, how do I know Nasdaq Wizard's system will succeed?
Market timing systems fail for several reasons:
1) The designers were not traders to begin with and had a poor concept of how to build a superior system. We were very successful traders prior to the design of our system. We decided to build a trend timing system as we felt our subjective results could be improved even further. 2) The designers backtested only a handful of years and did inadequate testing after the system was designed. Not only did it take thousands of hours for us to design our concept and gather the statistics, but it took an equal amount of time to test the 14 years of history. In addition, our system was never altered during the testing period. The signals shown on the long-term homepage are exactly where we would have triggered the signals had we been using the trend timing system from 1990-present. 3) The designers used too few components in their system. Combined with our checking system, our long-term trend timing model has nearly 200 components.
Is it true you give 401k allocations with each buy signal?
Yes, we do! Most people have funds that match the S&P 500, Russell 2000, and International indices in their 401k. Therefore, we give an allocation between these three indices. Example Russell 2000 - 45% S&P 500 - 30% International - 25%
How do I know which funds in my 401k match the S&P 500, Russell 2000, or International Funds?
Click here
What about fundamental analysis? Is this investment
technique part of your system?
We at Nasdaq Wizard do not support the idea of the stock market being a good buy or sell due to valuation, Fed rates, or any other factor relating to fundamental analysis. We do not feel that fundamental analysis is effective when it comes to market direction. Our system at Nasdaq Wizard is able to execute signals as it relies on the emotions (primarily greed and fear) of traders and investors participating in the stock market. These emotions are exposed on all of the near 200 factors that make up our system.
Is your system completely objective and mechanical in nature, or does the opinion of those at Nasdaq Wizard influence signals?
Our trend timing system is 100% mechanical.
How many signal changes are there on average a year?
Based on our studies of the market from May of 1990 - January of 2004, we can conclude that there will be an average of 2 signal changes a year.
How do I use your signals? What investment vehicles should I trade?
Our Long-Term Works page has that information.
What if I subscribe in the middle of a signal?
Your decision here should be based on risk tolerance and experience. We also discuss the market direction in our weekly commentary. You could start with a smaller position when you first subscribe and use our commentaries to aid you in adding to that position.
Should I expect the tremendous gains shown in the table if I am comfortable being long and short?
Possibly. In the past fifteen years, the stock market has experienced the greatest incline in its history and the worst decline since the Great Depression. The market was extremely volatile, allowing for good market timers to make an absolute fortune in the stock market. If you take a look at the past two years, you will be able to see how small the swings are currently. This does not mean that the stock market will not become increasingly more volatile in the coming years, but most likely it will be a very long time before we see the huge swings we saw between 1998 and 2003. Simply put, the higher the volatility, the larger the gains. In addition, the stock market is always changing. There is no guarantee that the tops and bottoms in the future of the stock market will resemble the tops and bottoms between 5/90 through 1/04.
What software did you use to design your system?
We did not use any software. We looked at nearly a thousand charts and inputted data into hundreds of excel spreadsheets by hand. By doing this, we were able to use human reasoning in understanding how the market works and develop a system that was truly unique and superior to other market timing systems. We look at much of the data in such a unique way it would be difficult to program it. It took us nearly a year, working 70 hours a week to finish the project.
I want to subscribe to your system but I don't have much money. How much do I need to make it worth my while?
Probably $2000. Even though a year subscription to Nasdaq Wizard would cost almost 18% of $2000, the experience and knowledge gained from being a subscriber would be more than worth the money. When you have more money to invest in the system, you will have acquired the skills and patience necessary to build wealth.
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