I’m shopping around the Web for market signals? Why SignalsMatter.com?
Fair enough. There are all kinds of investment sites on the web--from those offering “instant millions” in options or penny-stock trades to rather staid news aggregators or cookie cutter services that “design” stock/bond ETF portfolios for a fee. Somewhere among this mix, there are also a “few good people” giving “best-in-class” advice at one spot for a fair price. We feel we are slowly becoming the standard in this small group. Our trade results and testimonials speak for themselves, but we are much more than just a place to make money safely. Once you’ve read the primer and “surfed” around our site, we think you’ll agree that we offer more than the rest—and then some!
How should I get started?
We think the very best way to get started and test our strengths is to download the Free Investment Primer and read it cover-to-cover. We know: no one has the time…but trust us, these times demand that you take the time. After all, this is your money we’re talking about. The benefit: it’s both comprehensive and free. At the very least, skim through it and read the sections that pertain to you. To get the most from Signals Matter, you need to develop an understanding of the big-picture conditions prevalent today, their implications for your very next investment decision, and the descriptions of how easily our signals work.
Scroll up and click on "How It Works" / "Free Investment Primer" to download.
I’m a new Subscriber. Where should I go first?
Welcome aboard! Once you sign in as a Subscriber, the very best place to go is to your own Personalized Dashboard. In fact, we take you there automatically. If your name is Dan, this will be titled “Dan’s Dashboard.” The Dashboard provides your first stop for headline content on What’s New on the Website Today, a Daily Chart Watch and Commentary on an item of importance we wish to bring to your attention, Watch Summaries that update you on Daily Performance for Each Open Signal, a Short Form Weekly Trend Watch Heat Map, a Short Form Monthly Recession Watch Heat Map, and Market and Signal Tickers that click through to detailed charts of specific securities - all on one page. At the bottom of the page, Dashboard displays convenient Tabs to click directly to Our Results (that displays long term performance), to All Long Side Trades and All Short Side Trades (that displays Signal detail and provides further Tabs to Individual Signals), to the Full Trend Watch and to the Full Recession Watch. The Dashboard is updated frequently, so we encourage Subscribers to tag this as a Favorite and refer at least once daily. New Dashboards are date-stamped accordingly.
Can I trade directly from your website or do I need to open a brokerage account?
Our website provides, among many things, trade signals which you then execute within your own brokerage account. Trades are not executed directly from the website. If you do not already have a broker or an on-line account at a Schwab or similar, setting one up is simple. Google the Web links. We Googled “Best Online Stock Brokers for Stock Trading” which took us to Stock Brokers.Com. When we Googled “Best Financial Advisors,” we landed on Investopedia.Com. The Web is packed with solutions. Plus, Investors Business Daily published its IBD 2018 Best Online Brokers List in its January 29, 2018 Weekly Newspaper, ranking brokers by 14 different criteria. Go to https://www.investors.com/best-online-brokers/ to view online. Brokers highlighted included (alphabetically): Charles Schwab, E-Trade, Fidelity, Interactive Brokers, Merrill Edge, Scotttrade, TD Ameritrade, and TradeStation. Signals Matter does not recommend or endorse any particular broker, on or not on this list, as criteria among investors caries so widely, ranging from fees, reliability, website capabilities, trading and research tools, portfolio analysis and reporting, options availability, mobile applications and more.
Do I need to be an experienced investor or trader to use this site?
Absolutely not. As suggested on the “How It Works” tab (on the Menu Bar), Signals Matter gives you simplicity, fewer decisions and better results. Our Signals work for the full range of investor types, from total novices to market veterans. So, whether you are here simply to keep one step ahead of the next recession or are an active trader looking for simple trigger signals based on sophisticated trade metrics, we’ve made the user experience and the data menu extremely straightforward.
Who is Signals Matter not suited for?
Excellent question. Quite simply, Signals Matter is not for those who wish to hand all of their investable capital and trust to a financial advisor and walk away, fingers crossed and happy enough with a glossy brochure and the fact their “expert” advisor went to a fancy school or has an advisory license. Nope. Signals Matter is for people who actively seek to take investing, risk, and recession concerns into their own hands and gain not only profits, but knowledge. Whether you are here to trade signals or just keep an informed eye on the market risks and opportunities ahead, you will need to have a genuine interest in these things and a personality that wants to take an active rather than passive role in your investments. If you simply seek to pass this entire responsibility into someone else’s hands and walk away, this is not the site for you.
Do you guys offer financial advice to individuals?
No, but you’ll get most of the advice you’ll ever need here. Although the combination of our free media offerings and The Market School (available to paid subscribers only) will more than equip you with what you should know about today’s financial markets, we do not offer specific investment advice tailored to your own risk and investment profile. In addition, our Free Investment primer walks you through an investment planning process that can be tailored to you. Try it, it’s free! It provides everyone, from total market novices to auto-pilot investors, every possible tool to either manage their own investments or gain the long-awaited knowledge and confidence to press their own advisors with the right (and tough) questions which may keep you up at night. Knowledge really is power, and Signals Matter, above all else, is about providing you knowledge in a quick, simple yet substantive way. We put the power in your hands.
What is Signals Watch?
Signals Watch provides Subscribers with individual stock and ETF trading Signals for securities which we consider either overbought/overvalued or oversold/undervalued. If oversold, our Signals trigger when a buying opportunity is at hand. If overbought, our Signals trigger when a short opportunity when a selling opportunity is at hand. Thereafter, we signal when to exit these long or short positions based upon our proprietary market signals. By clicking through Signals Watch, you will find increasing detail on each Signal so that you (as a Subscriber) may decide whether to trade a particular Signal.
Are these Signals real, or just some kind of backtest?
Great question. First, we don’t believe in back testing; and second, even if we did, we couldn’t do it. Let us explain. What is back testing? Backtesting is a form of investment strategy modeling that seeks to simulate how a stream of gains and losses (an equity curve) would look by applying strategy algorithms against historical data. Backtesting is fraught with issues, most importantly overfitting, a method that adjusts algorithms so that they “fit” the data, generating fabulous historical results. “Look at these results; how could you not invest?” Here’s why. Because overfitting past data, even loosely, may work for short while into the future … until it doesn’t. Markets change. Market drivers change. Backtesting has a purpose, risk discovery for example, but mal-intended, can be injurious. Beware. Second, we couldn’t backtest Signals Watch even if we wanted to. Signals Watch is an art form. It draws upon years of experience combining multiple forms of independent, technically-driven commercial and proprietary software with industry, sector and fundamental company data, that simply cannot be replicated for any day in the past. Let’s call these ‘stars.’ There are simply too many moving parts to even think that all these stars would be aligned, for example, on February 6, 1998. Again, beware.
When are Signals posted?
Signals are posted weekly, following each weekly market close, which means they are posted over the weekend so that you are prepared for Monday’s market opening. We parse and analyze well over 1,000 stocks and ETF’s and post Signal instructions generally by 6pm on Sundays, often earlier. Check the “Last Updated” message on the various Signal pages to know when the Signal has been updated.
When should Signals be traded?
If you plan to trade a Signal, the very best time is to place the trade is at or near the Monday Open. New trades are generally on the cusp of a volatility breakout and you want to take advantage of that. By noon on Monday or the following day, we could already be up 5% and you want that 5% in your account. This isn’t always the case, but generally speaking, these Signals are very opportunistic at the get-go. If you arrive too late for a given signal, no worries. By the next Monday, you can find new signals to trade. Timing trade entries and exits is very important so you want to be crisp in your execution.
How many Signals should I trade and which ones?
The Signal selection process assures that each Signal posted has an equal probability of winning or losing. Thus, the best approach would be to take all Signals, for fear of missing a Signal that outperforms. Bear in mind that our philosophy here at Signals Matter is to let our profits run and cut our losses short, which over time has enabled us to earn more per winning trade than we lose per losing trade. By cutting losses short, the risk inherent in taking a portfolio approach is contained, both by added diversity and by our approach of minimizing losses. This means you need to watch not only the entry signals, but also our exit recommendations. It’s all very straightforward.
I’m 45 years old and I have a $10,000 cap to invest. How should I allocate?
Flexibility is important here. On average, we post about 2 Signals per week but we may have no new Signals for next week, or many; we may have no “Hold Existing Positions” or many; no “Exits” or many. So, the optimal approach would be to patiently and methodically allocate your given budget so that you can parcel out the same amount for all our Signals—and in your case, think about preparing for multiple trades of $500 to $1K so that you will always have enough to cover our weekly average number of trade signals, entering additional trades as earlier trades are exited. Here at Signals Matter, we win more in % terms than we lose in % terms on each Signal. That’s because we control losses per signal to an average of 2.50%. That’s an average, mind you, as many losses are smaller and there is the occasional double-digit loss that pops up from time to time when markets gap up or down on the open, or poor earnings are released during the day. You should do as we do. Let your profits run, but limit your losses. Don’t get caught with an outsized loss on any trade. To keep losses really tight, we suggest that you never risk more than 2% of your Signals budget on any single trade, regardless of your overall risk tolerance.
Here’s what you should not do
Thus, you do not want to simply start the process by putting $5,000 into each of two signals and be done! Instead, you’ll need to pace and size your trades given your investing budget, and you’ll need a certain level of idle cash so that you are always able to pull a trigger if a new signal is posted. In this way, the amount you have to invest becomes variable, with a ceiling given your individual wealth, confidence and risk tolerance levels. Once you’ve decided how much of your wealth your profile suggests you invest, never go above that limit. The idea is to find a pace (given the average number and duration of our trades, explained below) and eventually limit idle cash, as idle cash can reduce performance as measured on a portfolio basis.
What about Stop-Losses?
Check in with Wikipedia on Market, Limit, Time in Force and Conditional Orders, such as a Stop-Loss orders. Stop-Loss orders do exactly that, they stop losses by placing an order to buy or sell an open stock position once the price of the stock reaches a specified price, known as the Stop Price. We strongly encourage Subscribers to take advantage of Stop-Loss protection to protect against extreme moves on extremely volatile days. Here at Signals Matter, we have our own proprietary Stop-Loss rules, which take us out of a Signal when certain adverse volatility parameters are breached. We measure volatility in terms of the number of Average True Ranges achieved in a day or week, which is basically the range of a day or week’s price action. We’re pretty stingy when it comes to tolerating volatility against our Signals and you should be too. As a general recommendation, we would suggest Subscribers not tolerate an adverse move greater than 2 Average True Ranges in a single day or week. Figure out your tolerance for volatility and place a Stop-Loss within that range to avoid outsized losses on outsized volatility. Plus, of course, never bet the ranch on a single trade. Diversification among Signals is key.
What's Money Management?
Money Management is what we just been talking about, namely managing risk where uncertainty is present. Money Management deals with questions like, “what’s an appropriate budget?” - “how much should I allocate per trade?” - “how should I contain or stop out my losses?” - and so many more. Bear this in mind. Our Signals are just that, they are Signals that you make choose to take or not take. Our Results are based upon the presumption that all trades are taken and that trading accounts are fully allocated, whether to a single Signal, to multiple Signals, or to no Signals if no Signals are indicated. In live trading, it may not be wise for you to allocate 100% of your cash to a single Signal. This is where money management comes in. By rationing your capital safely among the Signals with money management applied, your returns may be diminished but so will be your risk. Money management and risk management go hand-in-hand.
Typically, how long do these trades last?
On average, our trades last 25-30 days, but there is a lot of variation around that. Our longest trades have lasted 100 days and our shortest generally 7 days, a single week. We’ve described our investment philosophy here at Signals Matter of letting our profits run while cutting our losses short. And we do just that. If we’re making good money and the trade is stable, we hold onto it, until it isn’t. If we suffer a reversal in the first week, we are out. Period. No emotion, no second thoughts. We don’t suffer losses easily.
When and how do I exit a trade?
Easy. When you see a newly posted “Exit” Signal Instruction, exit the trade on or close to the open on the very next Monday.
When are Signals and Signal performances updated?
We update Signals and associated Signal performance daily on the Dashboard for the previous business day and weekly elsewhere to give ample time for Subscribers to discover a new Entry Signal before it becomes a “Hold”; similarly, we want Subscribers to have ample time to check for an Exit Signal before it is taken off the board and potentially missed. Remember: Exits are as important as entries—so don’t just enter a position and ignore the “Exit” signals! We are not fans of real-time or daily updating because neither of these counts. Caution: Real-time and daily performances are largely meaningless from a trend or ultimate performance perspective.
Must Read Blog’s on Signals/Trading
Occasionally we publish Blogs that summarizes a Signal or address Best Practices when it comes to trading, diversifying and the like. Be sure to click on and read through these useful examples: Sleep Better with Appropriate Benchmarks; Market Trends Matter at Signals Matter; Signals Matter Stop-Loss Example; Signals Matter Short Trade Example; Signals Matter ETF Trade Example; What Rate of Return Can You Expect?; Signals Matter Example Short Trade.
What is Trend Watch?
Trend Watch is a weekly scan of marketplace Trends across Market Conditions, Global Equities, Global Bonds, Global Currencies and Global Commodities. Some of you may track stock trends only, others may be tracking broader asset classes. Either way, you’ll get all you need. Trends are algorithmically derived by parsing approximately 35 Global Indexes, all identified on the Trend Watch page. Indexes/asset classes that are rising or strengthening are shown as “Trending.” Indexes/asset classes shown as “Caution” are either flat or going sideways. Indexes/asset classes that are falling or weakening are shown as “De-Trending.” Trends are summed up and plotted on a Spider Chart that displays the relative strength of these trends across each Sector in multiple timeframes – daily, weekly and monthly. The further out on the trend diagram, the stronger the trend for that specific asset class/index. In one glance, you’ll see what asset classes are ripping, and which ones are getting battered or boring … and why. Trend algorithms are proprietary to Signals Matter, LLC.
Why do Trends matter?
Trends matter a bunch, especially when collectively measured over dissimilar time frames as they can frequently Signal a change in overall market direction. If stocks and bonds, for example, are screaming “Trend” in all timeframes, CAUTION: They could be overbought and ripe for correction to the down side. If the Trend in global currencies vs. the U.S. Dollar is increasing across timeframes, CAUTION: The U.S. Dollar is falling, affecting trade and potentially the relative value of global stock markets. If commodities are strengthening in Trend daily more than weekly, and weekly more than monthly, GOOD: The Trend is up and long positions could be considered. All of this, moreover, is explained in our weekly commentary on the Trend Watch page. We do the thinking for you, so that you can understand the forces at work and decide for yourself how much risk you want to take on, or leave off the table.
Your Spider Charts look complicated. Help me out.
Like anything, you’ll get used to our Spider Charts in no time. The chart plots the strength of Trends across three timeframes—daily, weekly, and monthly. They are super easy to see at a glance. It’s like having a thermometer for every major asset class—stocks, to bonds, to commodities etc. Each week, we also provide detailed commentary beside each Sector to inform what these Trends mean, what to look out for and what action to take, if any. Plus, Trends play a meaningful role in our Recession Watch so you’ll be a step ahead if you follow both. If you study our plot each week, you will become a better investor because you will see the opportunity (or storm) brewing before the tailwinds (or headwinds) pick up.
What is Recession Watch?
For starters, it’s our best seller. With stocks and bonds at nosebleed levels and as interest rates make a turn upwards, an increasing number of investors are camping onto the notion that nirvana cannot last forever. We agree. It cannot. And will not. Our many Blogs, Videos and Podcasts (under the “Media” tab) point to a correction. No one can perfectly time the first rain drops of a market storm, but we think we’re better than the rest at knowing when to reach for an umbrella. Think of our Recession Watch as a global heat map that shows you where we are in the economic cycle. Valuable? You bet. When the Recession Watch becomes over 50% Cautionary, it’s time to begin thinking defensively, to call your advisor so the two of you can agree on a plan if and as conditions deteriorate. And know this: being defensive very early is much wiser than being a minute to late once markets free-fall. Very few understand this, especially as markets break new records each week.
Why so much commentary?
Because we like to back up our math with clear word translations and because we seek to back up what we’re projecting with objective analysis not blogish opinions (though we love our blogs!). To the extent we are Bullish, Cautionary or Bearish, we want you to know why. If we are 60% Cautionary, that’s significant so we want you to know, for example, that central banks, yield curves, inflation, confidence, trade and the like are, on average, flat or not as strong as they should be. So, if Trend Watch (totally objective) is showing stocks and bonds at nosebleed levels, and the Recession Watch (both objective and subjective) is signaling over 50% Caution, then again, it’s probably time to trim those sails and dust off the game plan.
Are your Media posts current? Do older posts have any present value?
First, we post at least two blogs a week as well as podcast and video per week so that we can meet the diverse preferences of readers, audiophiles or the more visually oriented. Naturally, the most recent posts will be the most current, but we work very hard to make each post educational as well as topical. This means a blog, for example, on Bitcoin’s latest moves or Tesla’s appalling balance sheet may presumably seem stale after a week of price action (as these assets can move dramatically in a week), but we take pains to make every post more than just an “update” on a daily topic. Instead, these posts are carefully designed to provide and include “evergreen” or long-term insights rather than just a trendy soundbite. If you read a post on Amazon’s stock price, for example, you’ll be learning about a lot more than just Amazon’s profile; you’ll be learning about balance sheet analysis, central bank influence on pricing in general or a given security in particular. In other words, even if you read something in December that was posted last May, we’re certain you’ll find something directly applicable to your current and evolving market mind.
Do the blogs, podcasts and videos cover the same topics?
Yes and no. The podcasts and videos are more “evergreen” (timeless/broad) in scope - hitting big topics like central banks, the bond market, tech sector risks, opportunities and the like, whereas the blogs focus on more specific variable within these topics. That said, any and all of these media options provide a very user-friendly way to stay current while also receiving a slow drip market education in language you can understand.