How to make money from the markets – Introduction

There’s a huge number of myths out there about investing and trading that are quite simply – a load of rubbish.

Over the next few months, I’m going to show you how to make money from ANY market.

The first question you have to answer is:

  1. What do you want from the markets?

 

This will be personable to you – It could be anything!

This is what I want from the market:

  • When I decide to trade the market, I want to beat the markets return!
  • I aim for 25%+ and from that I know that over 3 years+ I will beat the market

so from that base I then set about formulating a plan of action to try to obtain 25% + return from the market annually

As I’m a very lazy person, naturally I wanted the easiest route to achieving this goal.

There is no Holy Grail and by that I mean some unknown, unknown that no-ones discovered yet that will let you be right 100% of the time.

Take a breath, think about it – there is not one system, method or technique that works 100% of the time.

  • That then means that you have got to take positions based on faith, trust and gambling

Yep that’s right, its a gamble!!!!!!!!!!!!!!!!!

So if it’s a gamble, then don’t you think it makes sense to remove as much risk to the gamble, guess, as is possible?  Of course it does.

That is what I’m going to show you in this series of posts

I’m going to show you how to AIM for that 25%+ annual returns from a variety of methods

There’s lots of methods to trade by – your next important question you’ll need to answer for yourself is

  • Are you willing to trade boringly and EXACTLY the same time after time

If your answer to this question is NO – then trading is probably NOT for you – you cannot start mixing and matching and varying what you do

For example I trade ONLY when the market is in a perfect set-up formation that I have devised (and i will show you this) – if the conditions aren’t there, then I won’t be putting money at risk.

So over the coming months I will show you how to make money from the markets, how to identify potential trades and how to think properly.

This series of posts will be based at the complete novice level, but it’s applicable to professional traders too – the whole aim of trading/Investing is to make money from the money you put at risk.

Now there’s only 2 ways to do that:

  1. Invest and then leave (Buying and Holding) or
  2. Trading

I like to be as much in control as I can of my money so I sit in the traders camp, as I’m often sat in cash waiting to take a position and then my positions tend to last days-weeks or months not years.

You’re going to need to understand and use basic mathematical concepts, because I’m afraid it is all about the maths whether you turn a profit or not!

Let’s say you make the 25% per year goal, if you start with £3,000 then over 25 years that will grow to £794K!

That’s a nice payback for extracting money from the markets.

Now if you’re a buy and hold investor then you will be fully exposed to market forces and you’re likely to experience some pretty hefty corrections along the way over the years – you are highly unlikely to hit the 25%+ goal per annum using this method – you might do it a few years out of 10, but not 10/10 years.

Make sure your signed up to receive posts when I make them, so you don’t miss the next one – this will look at the market as a beast in it’s simplest form.

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The NEXT MAJOR BEARISH market section in 17 years time[2034]

There’s loads of Cycles dates in the next UP phase and those have been previously published on the pages on here and onto blog posts too – please take your time to familiarise yourself with them.

This next UP cycle is as the name suggests UP – refer to a chart of 1982-2000 for an approx view of what it should look like – in essence it will be UP!

So what about the NEXT DOWN cycle then?

Well I’m going to publish what to look for 17-34 years PRIOR – keep a reference of this page to see if its correct or not – it’s not extensive – I’ve published on other posts other KEY dates to watch as well.

Some of the following dates will NOT work out – they’ll fail or not appear – this happens in all the previous sections going back a hundred+ years, its just something that you have to accept, however, many will work!

The market of choice at the moment is the NASDAQ – it’s where all the fever money has gone into of late, prior to the 1990’s it was the DJIA – you need to use charts for the market of the time.- why? Because you need to watch the market where man/woman are placing most of their speculative money, this market will react well to Time Cycles and show you the panic and greed of mankind all reflected in a handy chart of actual market prices recorded and displayed for all to see.

Here’s a table of Timings:

Box 1                 Box 2                 Box 3                 Box 4

09/02/1966        14/05/1969         07/10/1974         18/06/1982   – Chart 1 (1966-1983)

14/01/2000        10/10/2002         11/10/2007         21/10/2015   – Chart 2 (2000-2017)

05/07/2032        04/05/2035         26/02/2041         21/12/2050   – Projected from Chart 2 DATES

23/09/2032        22/06/2035         06/04/2041         25/01/2051   – Projected from Chart 1 DATES
(more…)

Can Stock Values Simply “Disappear”?

This is a great reminder as I encountered people who couldn’t understand this over the past few weeks – As you should know I don’t subscribe to the Author’s views on Elliott Wave Theory – just the content of the post.

Can Stock Values Simply “Disappear”? Yes.

And it’s happened before, too — just think back to the 2007-2009 financial crisis

By Elliott Wave International

On Wednesday (Jan. 13) CNBC reported that,

“Almost $3.2 trillion has been wiped off the value of stocks around the world since the start of 2016, according to calculations by a top market analyst. U.S. stocks are now off $1.77 trillion, while overseas stocks are down $1.4 trillion.”

Stocks rallied on Thursday — but then tanked even harder on Friday, which probably made that $3.2 trillion figure even bigger.

But how can that be? Doesn’t money simply move from one asset class to another?

Our readers have asked us this question before — especially during the 2007-2009 financial crisis, when 54% of the Dow’s value got erased in just 18 months.

You may be wondering this, too. Well, here’s an answer — from Ch. 9 of Bob Prechter’s New York Times Business bestseller, Conquer the Crash:

Financial Values Can Disappear

(Excerpt, Conquer the Crash, ch. 9)

People seem to take for granted that financial values can be created endlessly seemingly out of nowhere and pile up to the moon. Turn the direction around and mention that financial values can disappear into nowhere, and they insist that it is not possible. “The money has to go somewhere … It just moves from stocks to bonds to money funds … It never goes away … For every buyer, there is a seller, so the money just changes hands.”

That is true of the money, just as it was all the way up, but it’s not true of the values, which changed all the way up.

Asset prices rise not because of “buying” per se, because indeed for every buyer, there is a seller. They rise because those transacting agree that their prices should be higher. All that everyone else — including those who own some of that asset and those who do not — need do is nothing.

Conversely, for prices of assets to fall, it takes only one seller and one buyer who agree that the former value of an asset was too high. If no other bids are competing with that buyer’s, then the value of the asset falls, and it falls for everyone who owns it. Financial values can disappear through a decrease in prices for any type of investment asset, including bonds, stocks and land.

Anyone who watches the stock or commodity markets closely has seen this phenomenon on a small scale many times. Whenever a market “gaps” up or down on an opening, it simply registers a new value on the first trade, which can be conducted by as few as two people. It did not take everyone’s action to make it happen, just most people’s inaction on the other side.

The dynamics of value expansion and contraction explain why a bear market can bankrupt millions of people. At the peak of a credit expansion or a bull market, assets have been valued upward, and all participants are wealthy — both the people who sold the assets and the people who hold the assets. The latter group is far larger than the former, because the total supply of money has been relatively stable while the total value of financial assets has ballooned. When the market turns down, the dynamic goes into reverse. Only a very few owners of a collapsing financial asset trade it for money at 90 percent of peak value. Some others may get out at 80 percent, 50 percent or 30 percent of peak value. In each case, sellers are simply transforming the remaining future value losses to someone else.

In a bear market, the vast, vast majority does nothing and gets stuck holding assets with low or non-existent valuations. The “million dollars” that a wealthy investor might have thought he had in his bond portfolio or at a stock’s peak value can quite rapidly become $50,000 or $5000 or $50. The rest of it just disappears.

You see, he never really had a million dollars; all he had was IOUs or stock certificates. The idea that it had a certain financial value was in his head and the heads of others who agreed. When the point of agreement changed, so did the value. Poof! Gone in a flash of aggregated neurons.

So, the answer comes down to “money” vs. “value.” Financial values don’t move from one asset to another. They can just disappear.


There is no time to waste

Global stocks lost $3.17 trillion in the first 2 weeks of 2016

Were you ready? Are you ready for what’s next?

You can be.

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This article was syndicated by Elliott Wave International and was originally published under the headline Can Stock Values Simply “Disappear”? Yes.. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

As I’ve been saying….

For over 5 years now

Article from a UK Fund Manager on the effects of QE

scan0001

 

When will Bank Base Rate Rise?

I continually hear people from all over the place talking about Bank Base Rates.

You know they type of conversations “When do you think it will rise?”, “It’s been low for so long, don’t they [the bank] know what damage its doing to my income”…..etc

Well of course they are correct, low rates affect many people differently and they have been going on since 2008 now which is a long time.

Or is it?

(more…)

“Interest Rates Drive Stocks”? See 4 Charts That Tell You the Truth

These 4 charts show why you should be careful with this common investment “wisdom”

By Elliott Wave International

Robert Prechter’s monthly Elliott Wave Theorist once published a ten-part study explaining why traditional financial models failed to foresee the 2007-2009 financial crisis — and, more importantly, why they are doomed to fail again (and again).

On Thursday (Sept. 17), the Fed decided to keep interest rates unchanged. On Friday, stocks opened down big. But before you join those who blame it on the Fed, please read this excerpt from Prechter’s eye-opening study.

***************

Economic theory holds that bonds compete with stocks for investment funds. The higher the income that investors can get from safe bonds, the less attractive is a set rate of dividend payout from stocks; conversely, the less income that investors can get from safe bonds, the more attractive is a set rate of dividend payout from stocks. A statement of this construction appears to be sensible.

And it would be, if it were made in the field of economics. For example, “Rising prices for beef make chicken a more attractive purchase.” This statement is simple and true. But in the field of finance such statements fly directly in the face of the evidence.

Figure 3 shows a history of the four biggest stock market declines of the past hundred years. They display routs of 54% to 89%.

Figure 3:

In all these cases, interest rates fell, and in two of those cases they went all the way to zero! In those cases, investors should have traded all their bonds for stocks. But they didn’t; instead, they sold stocks and bought bonds. What is it about the value of dividends that investors fail to understand? Don’t they get it?

As in most arguments from exogenous cause…one can argue just as effectively the opposite side of the claim. It is just as easy to sound rational and objective when saying this:

“When an economy implodes, corporate values fall, depressing the stock market. At the same time, demand for loans falls, depressing interest rates. In other words, when the economy contracts, both of these trends move down together. Conversely, when the economy expands, both of these trends move up together. This thesis explains why interest rates and stock prices go in the same direction.”

See? Just as rational and sensible. On this basis, suddenly the examples in Figure 3 are explained. And so are the examples in Figure 4. Right?

Figure 4:

No, they’re not, because, as the first version of the claim would have it, there in fact have been plenty of times when the stock prices rose and interest rates fell. This was true, for example, from 1984 to 1987, when stock prices more than doubled. And there have been plenty of times when stock prices fell and interest rates rose, as in 1973-1974 when stock prices were cut nearly in half. Figures 5 and 6 show examples.

Figure 5:

Figure 6:

At this point, conventional theorists might try formulating a complex web of interrelationships to explain these changing, contradictory correlations. But I have yet to read that any such approach has given any economist an edge in forecasting interest rates, stock prices or the relationship between them.


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This article was syndicated by Elliott Wave International and was originally published under the headline “Interest Rates Drive Stocks”? See 4 Charts That Tell You the Truth. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

How to Invest Properly – the ONLY way

The vast majority of people Invest incorrectly – they only get away with it because the markets NATURAL movement is continual GROWTH.

This makes poor Investors think that they are good, it makes brokers look like they know what they’re doing and how the markets work – through in a decent bear market or decent market correction and they are quickly exposed as their funds/clients funds start reducing in value.

There is a right way to Invest though and it goes against EVERY piece of Investment advice out there – If you can TIME the market you will beat the masses big time

funds won’t tell you as they’re not allowed to do this, brokers won’t tell because they don’t know and that all leaves you to the moves of the markets.

Look at these charts that follow and tell me it’s not common sense or best to get in at the KEY turning points – ALL the key turns that follow were the RESULT of a key Time Cycle(s) – I have seen this too many times for it to be coincidental, too many times

1982-2000

2000-2017

1982-2017

To ENHANCE returns you can now buy 2 x ETF’s of an Index!

The NEXT cycle is UP – the general market action after 17 years WILL be very similar to that of 1982-2000 – not exactly but similar in form and it will rise on average at a faster rate than 2000-2017 rates.

The time to BE a buy and hold investor is fast approaching – compound up 50% growth annually over 17 years and you’ll see the power of buying and holding during the RIGHT and CORRECT market conditions

Good Luck

You were Warned

I did warn you of 18th August 2015 as being a key cycle date- 3 months agooooooooo

look back over previous blog posts – NOT the site – Blog posts and you will SEE

So lets recap – May 2013 Time Cycle bang on to the DAY and August 18th 2015 Time Cycle – Bang on to the DAY

Funny how this pie in the sky time cycle stuff seems to be so accurate!

Next cycle date is 6th December 2016 which turns this sorry affair UP UP UP

so as the rest of the world is likely to be wallowing in bear market pity, I will be getting ready to go full on in the market and long long long

Next Time Cycles

Hello, Here’s the next sequence of charts – these charts show the sequences within the larger cycles. For those who have not linked this or have not read W.D. Gann’s work – Gann said in the early 1900’s that he traded according to the “Law of Vibration” and that the wireless radio would not work without the Law of Vibration – put very very simply – the markets work in cycles, some of those cycles are large and others smaller, the cycles that drive the markets ALL work in harmony with each other – where people go wrong is that they try to force their logical perception of cycles into one another and it does not work, what you have to do is work out the larger cycles, then the lower cycles and work out the bits of the cycles that don’t fit in harmony AND I know exactly what YOU want ( A cycle that shows a High, then a Low, then a High and then a Low etc etc – that rarely happens) they do exist but you have to be open in your interpretation  – remember the markets are playing to their own tune and it’s our job to figure out not only the overall tune, but the tune being played right now and I’m afraid also the notes and how they’re ALL harmonically connected – this is the very very very hard part. I’d of never of been able to do this myself – I learnt all this from my recommended Gann course provider – not in person but from their course materials – and if I can do it anyone can. I need to refer back to the previous cycle posts at this point – from now on what you are about to see are cycles that occasionally sync with the previous cycles shown – in the big picture it ALL sync and fit, but in the smaller picture only occasionally – so in essence we are from NOW on looking at different cycles to those previously mentioned – but because of the limitations of my charting software I have to re-use some of the coloured lines – I’ll make sure each cycle is colour coded too – a thick line = an important junction, thin lines = less important junctions of the cycle. These are the cycles that drive the stock market – S&P500, Dow, Nasdaq etc This is the 21 year cycle (BLACK LINES), it is also harmonically linked to a 7 year cycle (BLUE lines) – I know this does not look much but in the larger time frame it is very very Important 21 and 7 yr cycles

This next chart looks at another Important chart, this is GANN’s 45 year cycle, broken up into “bits or sections” 1

Now a closer look at this cycle – cycle start date is the LOW of the 1987 Crash – the 1st chart yeah ok some hits, the 2nd chart down! Proves it without doubt – and the 3rd chart below again some good hits! 2 3 4

Look at how many accurate hits it has!  For this cycle it does not have to be EXACT – it has to be allowed leeway either side. STILL THINK THE MARKETS ARE RANDOM?????? – This cycle [above] proves they’re are NOT [random] – just too many “hits” at precise turning points – coincidence? NOPE, this cycle “Hits” with pinpoint accuracy as far back as you care to look – 1900-1932?  Yep, DEAD on hits with major turning points on more than 10 occasions!!!!! Notice the next occurrence of this cycle = 6th December 2016, if you look back at previous posts you’ll see that the 18 years cycle ENDS 7th December 2016!  These are 2 DIFFERENT cycles both arriving within a day of each other – THINK – these cycles are years in length and yet arrive within days! Be sure to watch the market action very closely those days! and REMEMBER the NEXT cycle is UP and Inflationary!

There are more cycles of a smaller scale that need to be inserted (next few blog posts) these explain the other movements and narrow down the cycles to be seen on a daily chart – these are now likely to be posted sometime September as I’m not planning on posting over the summer.

Whatever you do, do NOT look for these cycles to time every major high or low – one cycle on its own will not do that, it’s a COMBINATION of multiple cycles all working in conjunction with one another that do that – this means you HAVE no choice but to look at (and work out) numerous multiple cycles – most traders can’t be bothered with the faff of doing that!

The Famous 13 year Cycle

Following on from previous cycles, we’ll take a look at the 13 year cycle – this cycle is in the BIBLE and it represents the BEAST cycle as it’s approx 666 weeks in length (actually 666-668 weeks, but lets not be picky)

This cycle is actually 5 cycles and based on the way you calculate the varying cycles they come out very close to each other in length – you could derive Phi from these cycles as some cycles are based on 13 revolutions and others 8 and 5 – those are Fibonacci numbers and show up within this cycle.

But I don’t use Fibonacci in this cycle, its a coincidence of the concept, obviously it influences it somehow, but I never intentionally set out to include it, it just happens to be there as a result of the cycles.

Look at the chart:

13 year cycle main clusters

See the beauty of this 13 year cycle – its fairly clear!

On the face of it it looks like it failed in 2013 – wait until you look at the close up before judging.

Let’s look at the crash of 1987 – this explains it

13 yea r cycle 1987

Lets look at 2000

13 year cycle 2000

Now lets take a look at the beast cycle in the SP500 Index

Beast cycle in SP500

It came in RIGHT on target, but it did not have the desired effect on the market, but you cannot deny it came in right on time!

Let’s look at the beast cycle in my main index the FTSE100 Index

Beast cycle in FTSE100

AGAIN it came in RIGHT on time and in the FTSE100 it forced the market sideways for months!  Now in my book a flat sideways market is just as destructive and bearish as a right out market crash.

I got out of the market at the very top bar in May 2013

Now what about it’s next cycle?  Well it’s due in 2026 (2013+13) but WHEN?

13 year cycle 2026

There is a cluster in March 2026 – but the key time period has to be end Feb right through to end March 2026

ALL the dates in the above charts are projected from 1949 and 1987 and just look at how tightly packed all these dates are projected from those dates – that is AMAZING

Now you know I was previously talking about (in other posts) projecting the mid cycle acceleration point in the next Inflationary/UP cycle well projected from the 1982 LOW it arrives on 15/11/2026 – It makes logical sense to possible expect that the beast cycle of March 2026 drags down the market into November 2026 and then explodes upwards to finish off the cycle – just a guess though!

The 1975 Cycle obviously Inverted to a bottom rather than a top as the market was falling heavily into it. that is the only odd ball part to the 13 year cycle