The question on the day of a trade is, “is this turnaround real or am I wrong?”
Is this SELL signal real? If I am going from the C fund (an exposed position) to the G fund (a safe position), it is not a big problem if I am wrong. I can’t lose anything, other than the chance to make more if the market goes up instead of down, as I was predicting. If I am wrong and the S&P500 continues to go up, I just wait a while (~a week) and move back into C. The S&P 500 rarely shoots up, all I would miss is a few days of a short rise.
Is the BUY signal real? This is different. I have been in G since the S&P500 dropped, waiting for the BUY signal. Is this a real upturn or is it false and will there be more of a drop? If I move into the C fund from G, this is where I could lose money if it continues to drop. Drops are more dramatic than rises. Caution is advised.
I look at the S&P500 futures in the morning. If they are trending up, that’s good. I wait until the market opens at 9:30 am. You have until 12:00 noon to make a trade into C for it to be recorded that day. If by 11:00am the market is moving up, I am assured that this is a true upturn, and I make the trade.
I move 100% of my funds at each trade. You could of course test this system by moving any percentage of your funds.
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