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What is Market Timing?
Market
timing is any attempt to use past price data and other
market-generated information to accurately forecast future price
movements of securities or indexes, whether long-term or
intra-day, consistently and persistently. It is based on various
economic or stock market indicators. One of the purposes of
market timing is to determine when to buy and sell securities.
Forecasting asset prices has fascinated investors since the very
advent of financial markets. Accurate predictions of market
movements promise fast and substantial capital gains; attempts
to forecast stock prices are thus numerous.
Market technicians attempt to improve their performance by
timing the market; they also adjust their portfolios according
to predictions about the market as a whole, or for specific
sectors. Obviously, if investors can avoid the market’s weak
periods and participate only during its strong phases, they can
experience superior returns over a buy-and-hold strategy.
We
strongly believe that investors can still outperform a buy-and-hold
strategy even if they don't participate during the strongest times –
just as long as they escape the major market declines.
Our market timing strategy is founded on
volume-based technical analysis;
it can help you achieve this
goal.
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