The New Day Trader Advantage

All are proven techniques that do not require a degree in advanced financial engineering to exploit. And, most importantly, all have been proven to work in many different investment climates.

Timing. Possibly the most important determination you will ever make as an active investor is the direction of the intermediate-term market trend. If you get the three- to sixmonth direction of the market right, you know whether you  should primarily take long positions or short positions.

Some traders will tell you that they can take both successfully, but it’s usually not worth the trouble. That’s because when the market is generally rising, selling short is mostly a loser’s game. You will learn from me and two other experts how to decide on the direction and likely longevity of the intermediate trend and how to recognize “oversold” and “overbought” conditions that will allow you to lighten up or double down on positions to exploit short-term wiggles within that trend.

• Cycles. I will explain the most important cycles at work in the equity marketplace, including the 20-week and 40-week cycles. I will present quantitative and anecdotal evidence of these cycles and show how they can be exploited by active investors.

• Multimonth momentum. I will explain why observations of stocks’ relationship with their 10-month simple moving average may be the simplest yet most effective weapon in our toolbox. Stocks that are emerging from long downtrends and preparing to rebound back toward their highs must eventually switch from being under their 10-month moving averages to above them. This transition typically occurs slowly at first and then picks up speed. I will show how to find these stocks and exploit them in both short- and intermediate-term holding periods.