Systematic market research and transparent approach (WSC Smart)
WallStreetCourier.com offers its members a strong weekly market research relying on a transparent investment approach based on our published technical market indicators (WSC-Smart). WallStreetCourier.com believes that a clear and understandable investment process (WSC-Smart) will deliver more predictable results and allows members to understand easily the underlying drivers of our weekly market research.
Consistent performance across different market environments
WSC-Smart aims to deliver more consistent performance across different market environments. Rational decision making process based on our published technical market indicators which are embedded into our weekly market research will deliver consistent results and aid transparency.
The end result of this investment process is a highly systematic weekly market research (WSC Smart) to ensure consistent risk-adjusted returns across different market environments. |
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Identify trends by applying technical analysis!
- Trends tend to persist over time and therefore invest in the direction of the trend measured by different technical market indicators
- Trends can be measured by drawing trend lines or by using technical trend indicators
- Use appropriate trend indicators according to your trading approach. Day traders should use short term trend indicators like the Trend Trader Index or Modified MACD while traders should focus on a mid-term trend Indicators like the Global Futures Trend Index
- It is impossible to buy at the lows and sell at the highs (or sell at the highs and buy at the lows) consistently, but by following the trend, it is very likely to catch 70 to 80% of the right market movement
- Do not trade against a trend that is confirmed by strong breadth, no matter how much it hurts to miss an opportunity
- Never trade a trendless market as this will just result in small gains and small losses and is therefore at best a zero sum game if you not take transaction costs into consideration
- Strong trends are confirmed by strong market breadth
Measure the breadth (strength) of a trend by using technical breadth indicators!
- Market breadth tends to lead a trend and therefore it should be watched carefully using technical breadth indicators
- Market breadth (e.g. up-volume vs. down-volume, advancing stocks vs. declining stocks, new highs vs. new lows etc.) gives investors a unique view of the underlying strength of an index. If only a few large stocks are rallying, it will boost the major averages, giving the impression that the market is very strong but a trend reversal may be ahead
- Trends which are not confirmed by breadth are likely to reverse and therefore you should use close stops in such a case
- If breadth remains strong, buy into weaknesses or sell into strength
- Use oscillators for taking profits during trends, able to average down your portfolio if necessary
- Use appropriate breadth indicators according to your trading approach
- Day Traders should use short term breadth indicators (e.g. Daily Up-/Down Volume Index Daily, Trin Daily etc.)
- Traders and Long Term Investors should use mid- to long-term oriented breadth indicators (Upside-/Downside Volume Weekly, High-Low Index Weekly, Advance-/Decline Index Weekly etc.)
Follow smart money, avoid dumb money and measure investors sentiment!
- Smart Money are investors who have the best possible information available, like insiders, NYSE specialists, or hedge funds, and often spot trends before others do
- Follow Smart Money, if they are buying into weaknesses or selling into strengths
- Do not fight Smart Money if the trend is not supported by breadth
- Dumb Money are public investors, who are most of the time wrong with their market decision
- Do not follow Dumb Money, if they are buying because prices are low and selling just because prices have risen too far
- Buy if Dumb Money is selling and sell if Dumb Money is buying
- Investors Sentiment can be measured by following surveys like Market Vane and the AII Bull & Bear Index
- A sustainable trend needs the enthusiastic participation of the crowd
- If the crowd gets too optimistic (it is likely that the rally will run out of new participants) markets can easily fall
- If markets are declining and investors pessimism gets to an extreme, markets are likely to reverse as there are no more sellers left!
Interested in more technical analysis? Download our ebook of Technical Market Indicators for free!
Complex Technical Analysis Made Simple
Learn how to build a rational decision making framework (systematic trading model) based on different kinds of technical market indicators.
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Complex Technical Analysis Made Simple
A detailed instruction on how to combine different kinds of indicators to a sound investment process
Content:
- Trend indicators
- Breadth indicators
- Contrarian indicators
- Oscillators
- and many, many more
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