What May Happen in May? VantagePoint Forecasting Reduces Guessing Game

May 4th, 2016 by VantagePoint Software

Forecasting largeTV weather personalities get a bad rap. Who hasn’t blamed their local meteorologist for getting drenched in a downpour on a “sunny, sunny, sunny” day? Yes, forecasting is complex. Especially for days farther in the future as weather can be chaotic and unpredictable. But, the math behind forecasting skews toward the forecaster being correct.

The website Freaknomics.com recently studied meteorologists’ precipitation forecasts in Kansas City. They found TV weather people were correct 85% of the time one day in advance and 73% right seven days out. On the surface, that would not seem too bad. But consider that if a meteorologist in this study always predicted sunshine instead of rain. They would still be right 86.3% of the time.

The financial markets are just as chaotic and unpredictable for traders. Without the proper tools, the chances of successfully forecasting market direction into the future are slim. Left to their own devices, most traders will be right less than 50% of the time, and the consequences can be far worse than getting caught without an umbrella.

That’s because most traders still use “lagging” single market indicators. These indicators can only see what’s happened in hindsight. They study a chart on Wednesday night, look at a moving average and see that a particular market of interest is trending up or down. They soon find out the trend actually started on Tuesday morning, and they’re already a couple of days late getting into the position. That’s what happens when you look at traditional single market charts and lagging indicators. Even the weatherman have predictive tools, and traders can too.

With VantagePoint Software and its Intermarket Analysis, traders can dramatically improve their odds by using the patented, predictive indicators. These indicators forecast future price trends with up to 86% accuracy. Using patented neural network processes to predict changes in market trend direction 1-3 days in advance, VantagePoint gives traders an unprecedented opportunity to get on the right side of trends at the right time – days before other traders even know what’s happening.

VantagePoint Forecasting in Action

Want to see how it works? The below video showcases how VantagePoint can help traders identify new trends and opportunities for profit in just seconds.

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Using Intermarket Analysis to Day Trade the E-Mini S&P 500

March 24th, 2015 by VantagePoint Software

Trading stock index futures, such as the E-mini S&P 500, can be a wild ride. But as the most actively traded, liquid futures contract and the most widely followed market, it’s hard not to want to be involved in the market. But how does the retail trader keep pace and spot trends?

S&P

First, they must have a technical analysis tool that can analyze both past market data on the index itself and intermarket data from various related markets. These related markets might include the Dow Jones Industrial Average, 30-year Treasury bonds, Nasdaq 100, U.S. Dollar Index, the Swiss Franc, the Euro, New York Stock Exchange Composite Index, Dow Jones Utility Average, gold, and crude oil, to name a few.

This data is processed by neural networks to create a leading indicator for the E-mini S&P 500, instead of a lagging indicator.

In this paradigm, a moving average is forecasted for a future date, then compared to today’s actual moving average which is calculated solely on past single-market prices. This approach is similar to a traditional moving average crossover strategy which compares calculated moving averages to one another. The distinction in this paradigm, which transforms this strategy from a lagging into a leading indicator, is that one of the moving averages is a forecast for a future date based substantially on intermarket data, not just calculated on recent single-market data.

Applying Intermarket Analysis to your Trading Strategy

So how can this help you trade a volatile market like the E-mini S&P? In January of 2015 the E-mini had three separate five day trends – closing down five days in a row for two stretches, and also closing higher five days in a row.

Trading software like VantagePoint could have potentially given you a two day jump on the market. For the up trending moves, if the forecasted moving average for the future date is greater than today’s actual moving average, the market is expected to move higher over that time frame. Potentially, you could have gotten in the market two days ahead of other trend followers.

Watch this video below to see how VantagePoint predicted trend moves in the E-mini S&P for February 2015 and helped traders profit over $4200 per contract in just 15 trading days. Read that full blog here.

Similarly, when the forecasted moving average is less than today’s actual moving average, the market is expected to move lower. The difference between the two moving averages from one day to the next (as they are updated each day) indicates the relative strength of the expected move over that time frame.

By utilizing leading indicators for trading the E-mini S&P 500, such as VantagePoint’s proprietary moving average crossover strategy, based on both single-market and intermarket data from globally related markets, early indications of imminent changes in trend direction can become apparent before they show up on traditional daily price charts or can be identified by popular single-market trend following indicators.

You may also like: Predictive Trend Moves in the S&P 500

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Stock Trading Basics – The Importance of Technical Indicators

March 5th, 2015 by VantagePoint Software

What is the importance of technical indicators in today’s trading conditions?

The Importance of Technical Indicators in Stock Market AnalysisYou’ve done the research on a company, evaluated their balance sheets, and taken into account the P/E ratios and other projections. While this due diligence is extremely important when trading stocks, to maximize your potential for return, make sure you aren’t neglecting the importance of technical indicators in your trading arsenal.

 

Technical analysis is a method of evaluating securities by analyzing statistics generated by market activity, such as past prices and volume. Technical analysts do not attempt to measure a security’s intrinsic value, but instead use charts and other tools to identify patterns that can suggest future activity.

Technical analysis can be broken down into a number of sub categories depending on the types of technical indicators.

Trend Trading Indicators – Trend Lines

Experienced traders say the first thing any trader should know about a market is the trend. A market can only do three things – it can go up, it can go down, and it can go sideways. Trend Lines are an important trading tool for identifying and confirming the trend direction. They can also help predict areas of support and resistance and help traders spot important chart movements and significant price points.

A Trend Line is a straight line that connects a series of price points. The more price points the line touches, the stronger and more important the trend line is perceived to be. As a general rule, it takes at least three distinct points to confirm a valid trend line.

An Uptrend Line has an upward slope and is drawn by connecting three or more low points on a chart. Each low price point must be higher than the preceding low price point to form the positive sloping line. An Uptrend Line can act as support in a positive trending market. As long as prices continue above the Trend Line, the uptrend is considered intact. If prices break below the Trend Line, it could be an indication that the uptrend is coming to an end.

A Downtrend Line has a downward slope and is drawn by connecting three or more high points on a chart. Each high price point must be lower than the preceding high price point to form the negative sloping line. A Downtrend Line can act as resistance in a negative trending market. As long as price continue below the Trend Line, the downtrend is considered intact. If prices break above the Trend Line, it could be an indication that the downtrend is coming to an end.

Trend Trading Indicators – Moving Averages

Trend lines are the basic indicator of trend, of course, but they are quite subjective, depending on the eye of the beholder. A line that might fit one time frame may not be right for another time frame.So analysts have refined technical indicators that can verify visible trend observations from a price chart.

Perhaps the simplest to understand and most widely used of these technical indicators is a moving average, which traders have used for many years to smooth out erratic short-term price fluctuations to reveal existing trends or situations where a trend may be ready to begin or about to reverse.

The Simple Moving Average (SMA) is calculated by adding prices for a specified period of time and dividing by the number of prices in that period to get an average. Each price is given an equal weight. As each new price becomes available, the oldest price is dropped from the calculation. Many traders use a six day moving average.

Moving Averages and the Importance of Technical Indicators

With a Weighted Moving Average (WMA) more weight is given to the latest price, which is regarded as more important than older prices. If you are calculating a three-day weighted moving average, for example, the latest price might be multiplied by 3, yesterday’s price by 2 and the oldest price three days ago by 1. The sum of these figures is divided by the sum of the weighting factors – 6 in this example. This makes the weighted moving average more responsive to current price changes.

Moving averages have several uses: (1) Reveal trends by smoothing out data when market “noise” produces erratic price patterns, (2) identify points where trends may be ready to begin or end, (3) indicate shifts in market momentum based on the performance of price vs. a moving average or one moving average vs. another.

But most moving averages are lagging indicators. While they are great at identifying past market behavior, they have no predictive value. The higher level moving average is the Predictive Moving Average (PMA) used in the VantagePoint trading software.

With VantagePoint’s PMA, six days are still averaged, but day five and day six are predicted. This minimizes, if not totally eliminates, the lag. Now, the important key here is that the two days of predicted data are derived from the ongoing “under the hood” work of neural networks and intermarket analysis. Vantage Point takes technical analysis to a whole different level.

Moving Averages and the Importance of Technical Indicators

Momentum Trading Indicators

Traders are obviously interested in prices and how they change over time, but they are equally interested in measuring how fast prices are changing – the momentum of the market. Is the velocity of a price trend increasing or diminishing? Does this measurement suggest anything about future price direction?

Momentum is simply the difference between prices over some period of time. What distance does price cover in what amount of time? A price at any given moment – $42 for Microsoft stock (MSFT) for example – is just one price and doesn’t indicate whether prices are moving up or down. If the price rises $2 in one day, a trader now has a distance and a time to compare with previous price movements and arrive at a momentum value.

Momentum and Trend Trading Indicators Combined -MACD

Momentum indicators are often combined with trend following indicators such as the Moving Average Convergence Divergence Indicator (MACD).

The indicator consists of a MACD line, a Signal or Trigger line, and a Histogram. The MACD line is typically calculated as a 12-day Exponential Moving Average (EMA) minus a 26-day Exponential Moving Average (EMA). The Signal line is typically calculated as a 9-day EMA of the MACD line. The difference between the MACD line and the Signal line is represented by the Histogram.

Signal line crossovers are the most common usage of the MACD indicator. When the MACD line crosses above the Signal line, it could be viewed as a bullish crossover and suggests the trend has turned up. When the MACD line falls below the Signal line, it could be viewed as a bearish crossover and suggests the trend has turned down.

While the traditional MACD can be a valuable indicator, it is still lagging. However, the proprietary Predicted MACD in VantagePoint utilizes a 20-day EMA and a 10-day EMA, with a 9-day moving average of the two values as the trigger line to predict trend changes 1-day in advance.

When the Predicted MACD line crosses below from the trigger line, this predicts a possible reversal of the current uptrend to a new downtrend. When the Predicted MACD line crosses above the trigger line, this predicts a possible reversal of the current downtrend to a new uptrend. Another crossover indicator occurs when the Predicted MACD crosses above or below a “zero” line, which is the point where the values of the two moving averages that make up the MACD are equal.

Predicted MACD also defines overbought/oversold conditions in a market when it pulls away from the trigger line, suggesting the price of the market may be due for a correction that will bring the averages back together. Predicted MACD also spots underlying strength or weakness in a market when its movement converges or diverges from the movement of prices.

Trading Profit is Obtainable

The predicted MACD is just one tool, and as any trader knows, to be successful in the markets, you need to employ a confluence of factors. This includes strong fundamental analysis of the stock you want to buy combined with a cutting edge technical analysis tool like VantagePoint predictive trading software.

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Accurate Stock Market Forecasts from VantagePoint

February 5th, 2015 by VantagePoint Software

market forecast

Looking for an accurate stock market forecast?

If you’re trading in the financial markets then surely you know the value of trading with consistent and accurate information. Where most traders fall short is in their ability to respond proactively, and not reactively, to the market.

VantagePoint Trading Software utilizes the power of Artificial Intelligence to populate a market forecast that is up to 86%. With forecasts that are consistent and accurate, traders can anticipate market trends and put themselves on the right side of the trade.

See a VantagePoint Stock Market Forecast

In this video we take a look at trades from two familiar retail stocks: Netflix and Lululemon. that VantagePoint accurately predicted:

In this recent market forecast you can see how VantagePoint accurately forecasted the 33% move over 11 trading days in Netflix ($NFLX) as well as the rally in Lululemon ($LULU), which increased at a rate of 1% per day since VantagePoint forecasted the trend to move up.

Stock and options traders can rely on these market forecasts in order to see immediate positive results in their trading.

VantagePoint Intermarket Analysis Software looks at the markets from a global perspective and provides traders with stock forecasts that are up to 86% accurate. This video demonstrates just how simple and extremely effective it is to use this patented technology to determine the global market influences and profit more than you ever have before.

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