Saturday, April 08, 2006

Paradigm

Paradigm is a novel written by Robert Taylor, published by Savas Beatie in 2006. It is the story of two brothers who discover the holy grail of stock market timing and then are chased across Europe and the United States by powerful dark forces who already had discovered the secret and are not too happy about sharing it. It's 600+ pages were a quick and entertaining read and I recommend it to those of you who enjoy reading and in particular, enjoy reading about anything related to the stock market.

Here's the catch: It's not entirely a work of fiction. The storyline is make believe, but the holy grail, according to Taylor, is real. Wait. It gets better. It's for sale: http://taylortrends.com

I wrote the author and asked for some back data so I could check it out for myself. I received six years of charts with the author's methodology superimposed upon a chart of the S&P 500. I then subscribed to the timing service and checked all the previous timing signals, as far back is the web site went, just to make sure that the dates were authentic.

Does it work? Here are my hypothetical results, you can decide for yourself. All dates are based on the monthly mid-points, i.e. if a high or low was set for June, I chose June 15th for the date of my hypothetical trade. I also used the SPY (rounded to nearest whole number) for prices, although the timing would work for any general market tradable.

12/15/00.....SELL 132
03/15/01.....BUY 118
06/15/01.....SELL 121
09/15/01.....BUY 101
12/15/01.....SELL 113
04/15/02.....BUY 112
05/15/02.....SELL 110
09/15/02.....BUY 89
01/15/03.....SELL 94
03/15/03.....BUY 83
06/15/03.....SELL 100
08/15/03.....BUY 99
01/15/04.....SELL 113
05/15/04.....BUY 109
06/15/04.....SELL 114
08/15/04.....BUY 107
01/15/05.....SELL 122
04/15/05.....BUY 116
06/15/05.....SELL 121
10/15/05.....BUY 119
01/15/06.....SELL 128

Those are some impressive signals. The average gain per trade signal is 7.5% basis the SPY. But when applied to the Double Beta Funds (2X the market gains) of Pro Funds, the average trade signal jumped to 11.87%. When applied to deep-in-the-money SPY options, the average trade signal was close to 100% for three-month options.

There is reason to be skeptical of any methodology that claims to be able to time the market. That reason is that so many of us have been trying for so long to time the market without success, it is easy to conclude that it just can't be done and that these posted trade signals are too good to be true.

Unless, of course, they're not and this is indeed, the key to the vault.

A

13 comments:

Anonymous said...

With this information, are you doing to fiure out the timing signals yourself, or are they given to you at taylortrends.com? I would sure like to know more. What are you going to do with this information?

Holly

Allan said...

Holly, the timing windows are given out as part of the paid subscription service. It was those windows, one about every 2-3 months, that I used for my testing. If it works going forward, I'll use one of the leveraged vehicles to trade them.

A

curt504 said...

Thanks for this tantilizing read and system. I'll trust that you'll keep us informed of your trading successes so we too can add this to our profit machines?

BTW, I don't know if it's good news but I'm reading uranium news every other day. FRG has been mentioned in 2 articles which I've bought. FRG is an odd one though with no direct mines of it's own. Like Allan said, buy based on price movement and sort out the DD later. I'm in the later phase. I bought NWTMF based on it's chart and it's PPS per pound of U in it's mines. I think CVVLF might be the best bet though, much like CWPC is a good hydrocarbon bet.

tnx curt

curt504 said...

Who would of thought one could day trade uranium stocks?? :) I think there's too much hype built into FRG and it's time for a tight trailing stop loss.

Any other uranium discussion?

curt

Allan said...

curt, most of the pure plays in uranium are on foreign exchanges, not my cup of tea; I'm up 75% on FRG and holding for about three months now; since it's my one and only pure play, I'm in for the long term on it.

A

T. P. Savas said...

Allan

As the publisher of Paradigm, by Robert Taylor, I wanted to take a moment to thank you for taking the time to read it, finding it of sufficient interest to perform due diligence on the science, and then being brave enough to post your results. I have had many hours-long discussions with Robert, and have checked out what he claims. Regardless of how much of a head-scratcher it is, the data speaks for itself. It is the key to the vault, but my experience is that fewer than 1% of the people who have the information even bother to check it for themselves.

Kind regards,


Theodore P. Savas
Savas Beatie LLC
P.O. Box 4527
El Dorado Hills, CA 95762
916-941-6896 (voice)
916-941-6895 (fax)
www.savasbeatie.com

Aretino said...

I don't dare rain on anyone's parade, but I have a bit of a bad feeling about this whole thing. You're linked from the publisher's site, so I thought a little counterpoint would be healthy.

Anonymous said...

I was at the website and the data given are not that far back. How did you get the back data?

Patrick said...

I've tested Taylor's system back a year and he's on-the-money. Any thoughts? It seems too easy! Has anyone used the Nobeltec Tides & Currents to chart yet?

bwoody said...

aretino's blog on the book is really mindless. He rips Taylor and the book all based on the book cover flap. He obviously didn't read the book. Good counterpoint--true counterpoint--uses intelligence and factual debate. There's nothing "healthy" about what he did.

bwoody said...

Allan,

12/15/00.....SELL 132
03/15/01.....BUY 118
06/15/01.....SELL 121
09/15/01.....BUY 101
12/15/01.....SELL 113
04/15/02.....BUY 112
05/15/02.....SELL 110
09/15/02.....BUY 89
01/15/03.....SELL 94
03/15/03.....BUY 83
06/15/03.....SELL 100
08/15/03.....BUY 99
01/15/04.....SELL 113
05/15/04.....BUY 109
06/15/04.....SELL 114
08/15/04.....BUY 107
01/15/05.....SELL 122
04/15/05.....BUY 116
06/15/05.....SELL 121
10/15/05.....BUY 119
01/15/06.....SELL 128


Since Taylor's signals only tell us the market is going to be high or low, how did you come up with the levels that you did?


Brad

Allan said...

Brad, I emailed Robert Taylor for his back data, which he graciously provided. I then charted the turning points based on the dates given and used the Open for the SPY around those dates for the entry points for those hypothetical positions.

A

bwoody said...

Allan,

I see. I am still learning about investing so I will need to digest what you just said, look at the charts myself for the SPY and figure it out. Thanks for replying and thanks for the original blog entry on this.

Brad