It's no longer good enough to perform technical analysis on just one market at a time, or to "eyeball" what related markets are doing. Why risk losing your trading capital, missing out on big moves, or getting into or out of trades at the wrong time?
Let's face it, today's futures, stock and forex trading is a whole different ball game than it was back in the 1990s! Now, you are taking unnecessary risks if you restrict your analysis to a single futures market's past price history, no matter how much strategy testing you do or how many single-market technical indicators you look at. Today, we feel the best way to help identify trading opportunities in the markets on a consistent basis and to protect your capital is to incorporate intermarket analysis into your trading strategy.
John Murphy, in his book Intermarket Technical Analysis sums it up: “To ignore these interrelationships is to cheat oneself of enormously valuable price information. What's worse, it leaves technical analysts in the position of not understanding the external technical forces that are moving the market they are trading. The days of following only one market are long gone. Technical analysts must understand the impact of trends in related markets all over the globe. Trying to trade the markets without intermarket awareness is very dangerous”.
Markets Are Not IsolatedMany traders have little awareness of market globalization and therefore rely upon trading strategies or approaches which do not take into account how other markets affect the market that they are trading. Simply following the Soybeans prices because you're trading grains or watching the EuroFX because you're a currency trader is not enough! Having little or no regard for what’s happening in seemingly unrelated markets is like driving down the street with a blind-fold on. Sure you might make it to where you are going...this time, but the chances of you getting into an accident are high. Each time you drive with that blind-fold on, you are exposing yourself to unnecessary risk. Intermarket relationships are there and they can either work for you if you are taking them into account or work against you if you ignore them. It's your choice! Even those futures traders who do recognize that the global economy has dramatically altered the way in which the world’s financial markets interact often draw a blank when asked how they take these intermarket effects into consideration in their own trading. The focus of technical analysis has continued to be limited to each individual market – maybe because it’s just easier to do it that way. But the price paid for taking the easy way out can be enormous.
Let Me Give You A Real Life ExampleLet's say you are a grain trader. You trade grains, you watch grains, you know everything there is to know about grains. But what you don't know is how energies, meats, and currencies can affect the grains. Doesn't it make sense that energy prices would affect the grains? Grain producers use fuel on their farms. Fuel is used to transport the goods. Then the goods are bought and sold using different world currencies. The grain products are then used to feed hogs, cattle and other livestock. This is an easy one. Most "intermarket" relationships are beneath the surface and not as obvious as the one in this example.
Leading Indicators vs. Lagging IndicatorsAsk any trader what tools or types of analysis he is using and you're probably going to hear Stochastics, Fibonacci, Elliotwave, MacD, moving averages, etc. You have probably used or are using one or more of these indicators yourself. All of these indicators and methods of analysis are trend following in nature which means they lag the markets. This lag is why many traders are unsuccessful. A trend may begin on a Monday, but because you use lagging indicators you may not get the indication until Wednesday. This ends up costing you money.
If you are using the same trend following indicators to exit your position, more often than not, you'll find that at one point you had a nice profit, but by the time you actually got out of the position, most if not all of the profit was given back. This is frustrating isn't it? You can't forecast trends if all you're using is trend following indicators! To be able to anticipate trends you must have something that can anticipate. Most traders use information that reacts to trend changes causing them to miss out on good trading opportunities.
As the commodity markets become global at the speed of runaway train, the neural networks of VantagePoint are quickly becoming a necessity, not a luxury
- Mary CaskadonVantagePoint customerTestimonial given on 4/11/05
If you are trading using lagging indicators, you are stacking the odds against yourself. What you need is an indicator that can anticipate trend changes ahead of time with a high degree of accuracy. Having the right tool for the job is critical. VantagePoint uses several predicted indicators to forecast the market including:
Predicted Moving Averages
Predicted MacD
Predicted RSI
Predicted Stochastics and more...
They real key to these indicators is that they don't have the same lag typically associated with traditional technical indicators.
Technical Analysis + Intermarket Analysis + Leading Indicators = VantagePoint SoftwareMany traders who come to us for help have been using charts to help them make trading decisions. The problem with using charts is that they only tell you what has happened. They do not tell you what is likely to happen. It would be like driving your car and looking in your rear-view mirror and seeing everything you’ve already passed rather than being aware of what was ahead of you. By the time you see a trend change on a chart it's too late...you’ve missed the turning point!
"It is a powerful indicator that evaluates the strength of a current price move and provides a signal when a trend may change, sometimes days before it becomes evident with moving averages"
- Futures Magazine Education and Analysis for Financial and Commodity Traders
Using neural network technology, technical analysis and intermarket analysis, VantagePoint finds hidden patterns and relationships between twenty-five related markets and the particular market that you are trading. VantagePoint collects and analyzes data from the target market and twenty-five related markets. This data comes from one of the VantagePoint compatible data sources and is only approximately $25/month. Because VantagePoint is a trading tool and not a trading system, there are many ways VantagePoint can be used based on the needs of the trader. You can use VantagePoint as a stand-alone tool or as an intermarket filter to other indicators that you are already using. Many VantagePoint customers have developed their own trading strategies based on the many predictive indicators VantagePoint offers. These strategies vary from trader to trader based on their personal circumstances such as account size, risk propensity, experience in the markets, etc.
If VantagePoint does nothing more than keep you out of bad trades or give you the confidence to take winning trades that you might not have gotten into, then it has done its job. You do not need to change your current trading style. VantagePoint can be used to augment your existing approach by giving you a broadened intermarket perspective. However you choose to utilize it, VantagePoint gives you highly accurate predictive information reflecting the intermarket dynamics that drive today's financial markets.
The Domino EffectThink of it this way. Line up 10 dominos in a row. What happens if you knock one of them down? They all come crashing down. That is because they are all linked to each other. That same thing happens in the markets. Markets drive and affect each other which is why you need to be aware of intermarket relationships rather than just focusing on a single market.
With VantagePoint's daily forecasts at your fingertips, you'll reduce the risk and stack the odds in your favor on each trade you take because you are privy to predicted intermarket information that is simply not available to most traders. If you really want to be among the estimated 10% of traders who are able to become successful, then you owe it to yourself to start putting VantagePoint to work for you.
Want to see how you can use VantagePoint to give you an edge in your trading?
Here's What VantagePoint Tells You For The Next DayFirst it predicts the trend direction of the market. This can be done by using any of the predictive indicators and then confirming the indication by using any of the several predictive technical indicators. Using the pattern recognition capabilities of neural networks, VantagePoint actually predicts the trends rather than following them.
In many cases, VantagePoint helps you to “see” what is likely to happen in the market that you are trading before other traders (using only single-market analysis) catch wind of it. Frequently the predictive VantagePoint indicators will flash an “early warning” - before it actually happens! Because VantagePoint offers several predictive indicators (Predicted Moving Averages, Predicted MacD, Predicted RSI, and Predicted Stochastics), they can be used in conjunction with each other to give you added confirmation. As you become more comfortable with VantagePoint and using it to trade with your trading strategy may evolve.
Some VantagePoint customers even look at VantagePoint charts from related markets to add even more insight into what is likely to happen in the target market that you are trading. For instance, the Dow chart and the Nasdaq chart add insight into what's likely to happen in the S&P 500 market - since you are able to look at forecasts spanning several related U.S. Index markets.
The key to VantagePoint is its ability first analyze the target market by doing extensive technical analysis, then analyze the market relationships that exist between the markets and finally, to forecast moving averages and other predictive indicators! Through extensive research, our research staff has been able to combine technical analysis, intermarket analysis, and neural networks, and thereby have transformed moving averages and other indicators that typically “lag” into indicators that “lead”! This one aspect of VantagePoint totally makes prior research involving moving averages, and efforts by technical analysts over the past two decades to reduce their lag, outdated. Are you still using “lagging” indicators in your analysis? If so, just think what it would be like to turn them into “leading” indicators.
