Is Exact Market Timing Possible?

However you couch it, market timing involves elements of moving investment money in and out of a financial market and or switching funds between asset classes. The current state of this art is to try to predict the required change ahead of the market. The alternative to market timing as a strategy is the so-called buy and hold strategy, which allows trends to work out over the long term. But for the buy and hold strategy to succeed, we also depend on market timing. Because, in both cases, the investors aim to cash in at the crest of a rising "wave" if buying, or at the trough of a falling "wave" if selling. So truth be told, underpinning all financial investment success is market timing.

And so the question, is there any sense in which market timing can be gotten right so routinely it ceases to be a significant risk factor in the calculations of traders and investors? Especially, if we pause to consider that the evidence of serial success with market timing (as an explicit investment device), is scanty in practice. And it is a clear farce to say there are "systems" possible that would be more than 50% correct long-term whatever the term of investment measured. In addition, both in academic (including fractal geometry), and practitioner traditions, market timing of the nature implied is deemed impossible and deemed so with clear and present justification. Nonetheless, we (Fractal Visions), disagreed with such views 10 years ago and can now show without an iota of doubt that markets can be timed exactly. In showing so, we will explain that markets can be timed without the need for the prediction of any future (current practice relies on predictive or extrapolative models of the market).?

To be sure, the general sense of the assumption of the inapplicability of monofractal techniques in fractal geometry to a solution, is that markets are multifractal and subject to multidimensionality, and that as such, monofractal devices would be inadequate to resolve the complexities of multifractal systems such as markets. And clearly, anyone caring to evaluate Michael Barnsley's now famed "the chaos game" (available all over the web for free), would be inclined to agree. Yet you cannot walk away from Barnsley's game without the thought that if indeed the market is fractal (ignoring the complexity of multifractality for a moment), then it (the market), must be performing the same functions as Barnsley's equations at a more complex level. This means the solution to such a multifractal pattern is to find whatever this pattern is, such that as the scale (time frame), of the market changes, the details (fractures), vary at a non-constant ratio. This behavior (it is a behavior given that the unit of behavior is activity), must of need be complexed to at least 1/infinity (i.e. "shape" or recursive pattern is true to the tiniest intervals possible in market time) [in this context using an undefined value is the same as not using one]. We of course relied on our proprietary reasoning that given the transactional nature of markets, markets exert a binary force on dimensionality and that this force, is so fundamental, as to specify a binary taxonomy for all possible market fractures. We (Fractal Visions), maintain (and discovered in practice and can therefore show) that unqualified by Hurst type, the multifractal "shapes" or pattern of markets is a complex of affine monofractals dynamically defined (ordered), in time.

As such, Fractal Visions can now demonstrate visually to invited visitors at our trading studios (R&D facility), in Abuja, what the multifractal "shape" or footprint of markets looks like. The task, of course, is to dynamically track the real-time orbit of the price variable (a singularity), using its footprint. The variable alternates between the periodic and aperiodic states per interval (is intermittent), as well as nonmonotonic because it is globally and locally mean-reverting. To do that we interpolate live fluctuations in range by inflection-driven (weighted) dots, and isolate such dots at crest and trough by sign. This dynamically orders the implied Rules of Recursion (multifractal pattern), for the variable, and to the point where the pattern can be read across all intervals as the same at different scales and can be seen by the naked eye to be consistent with the definition of a multifractal above.

To know and be able to implement the multifractal pattern in a model of the market is to radically change the prospects of the trader. In other words, by introducing Orbit the Tool, an Expert Overlay driven by the multifractal pattern, Fractal Visions, is aiming to change the game for traders/investors. Because you no longer need to predict a future if you can time the change exactly. You simply follow the change with a small lag at scale. Given that price is a singularity and its behavior can be interpolated in range according to the dynamical order defined by its "shape," or multifractal pattern, readings of changes in this pattern at scale are conclusive. This is the sense in which Orbit the Tool is mathematically the market and always correct as to market timing and direction.

S. Ikwue MBA, PGD, HDM