Market Forecasting Secrets for Traders and Investors

Market Forecasting is the science and art of determining in advance when a market is most likely to change direction and may also include the likely duration of the anticipated move.

Market Analysis is all about taking current price data and applying technical analysis and/or fundamental analysis in order to determine what the market has already done and what it is doing now, and may or may not include Market Forecasting.

If Market Forecasting is included, the degree to which it is included will vary widely from one analyst to another. The method of forecasting may be as simple as anticipating the crossing of an indicator line or the reaction to the breakout of some level of resistance, or as sophisticated as to predict the very date when the market will likely change direction (new trend direction or the beginning/end of a trend correction).

The method of forecasting involved in my analysis of price data is very sophisticated and naturally proprietary. The science behind my work is based strongly in the mathematics of market cycles. Market cycles provide a roadmap to future price direction and the likely culmination of one move into a new one.

There are various approaches to analyzing price data for cycle footprints. These cycles expose themselves to oscillators and moving averages (indicators), the tracking of seasonality, and even the monitoring of various planetary bodies and the effect it has on the earth (produce and psychology).

A trader or investor can do quite a bit of market forecasting without having to delve deeply into the really technical aspects that I use for my clients. Here are some suggestions to help you get started in determining the trend and likely duration.

Start with the WEEKLY price chart.

Using a weekly price chart, where each price bar represents one trading week, locate the start of a new move. What that means is to find a clearly defined swing bottom or top where the new direction starts from.

Usually, prices tend to change direction at Fibonacci points in time. For example, look for a possible turn 3 bars later, then 5 bars later, than 8 and so-forth. If you are not familiar with Fibonacci, there is much written on this subject.

Keep in mind that not only can you do this for every clearly defined swing top or bottom, but that they will overlap. For example, you may note that a certain week is 8 weeks from a previous top/bottom, and also 3 weeks from the most recent top/bottom.

Never expect exact counts all the time. If you count out 55 weeks from a previous top/bottom, it is possible that it could occur on week 56. In fact, it is possible that it won't occur at all. Be mindful of these pitfalls.

The key here is to get a 'time period' to focus on for a possible weekly turn. Then, turn to your daily chart and look for evidence of a possible trend change, such as your indicators being overbought or oversold and possibly looking to reverse. You can even apply the time-count approach to your daily chart and look for clustering within the weekly time frame you are analyzing for. Clustering is when you have two or more results pointing to the same time period (within a day or two) based on counting from different previous tops and bottoms. These are time periods you want to watch.

There are so many valuable market forecasting techniques you can use to help you predict future market turns. I have included 12 powerful methods in my Market Forecasting Secrets book. By adding Market Forecasting to your chart analysis, you can be ready at the right time to either plan new trades or exit existing trades. Another big bonus is that it helps lower your risk exposure, since there is no better place to enter a trade than near the very beginning of a new move.

Know in Advance the Market Turns of Tomorrow! With the right market information, you will know when to a bottom or top is going to form with a high degree of accuracy. The FDates Market Timing Membership provides the right market information you need to succeed.

Junior ISA One Year Old

Having been in operation for a year it is time to look at whether the Junior ISA has been a success. This savings plan for children was set up by the government as a way for parents to invest on behalf of their children.

A Junior ISA allows parents to invest up to £3,600 every year with no tax having to be paid on interest or capital gains. A child will gain access to their ISA upon their eighteenth birthday. At that point they can transfer it into a regular ISA and, should they so choose, start to use the money as they see fit.

Whether the first year of this children's ISA can be considered a success or not depends on how you perceive success in this instance. An obvious comparison that will be made is with its predecessor, the Child Trust Fund, which was introduced by the Labour government in 2005, with children born from 2002 eligible. Under that scheme parents were given a £250 CTF voucher upon their child's birth to invest on their behalf. Had this not been invested after a year then an account was automatically opened for them. They could then contribute up to £1,200 a year towards the fund and were given another £250 voucher when their child turned seven years old (although very few reached this age before it was discontinued). There is one main benefit and one main disadvantage of the JISA compared to the CFT. The main benefit is the higher allowance with the lack of the initial government contribution being the key disadvantage.

If comparing the Junior ISA with the Child Trust Fund, the number of accounts opened has been significantly lower than the number of accounts opened in the first year of the Child Trust Fund. This isn't really an accurate comparison, though. Not only does it include accounts that were automatically opened after a year, but parents had more of an incentive to open an account. With no government Junior ISA contribution it means that those who are not planning to make regular contributions do not have the same incentive to open an account. On the other hand, of the accounts that have been opened the average contributions have been higher. These two comparisons suggest that fewer parents have had sufficient incentive or funds to open an account but, of those who have, they are contributing more. This is, in part, because they are able to contribute more due to the allowance being three times as much.

There may have been more Junior ISA accounts opened were it not for the regular adult ISA, which has a much higher allowance of £11,280. It has been suggested that many parents are choosing to use part of this ISA allowance to effectively invest on behalf of their children. For example, parents that might wish to invest £2,000 on behalf of themselves and other £2,000 on behalf of their child might invest the full £4,000 in their ISA, rather than putting £2,000 of it towards a Junior ISA.

The long term success of the Junior ISA remains to be seen. Though we can look at trends, one year is too soon to realistically judge how successful it will be, especially considering the current economic climate.