Saturday, December 23, 2006
Getting Your Timing Right
MY E-MAIL IN BOX IS THE DESTINATION for several notes a day touting various traders’ stock market timing tips and asking me to pay to receive these insights. I read the claims of magnificent gains and wonder, “Can this really be true?” before moving on quickly to other business.
As it turns out, there’s a site that can help you tell if such awesome predictions do ever occur: TimerTrac (http://www.timertrac.com) measures the performance of nearly 600 market timers and is steadily adding new contenders.
First, a clarification. The phrase “market timing” got a bad rap a few years ago when mutual funds were discovered to be allowing favored clients to buy fund shares after the markets had closed. Although it was called market timing it was really just fraud and unrelated to traditional timing practices. The term usually refers to the act of trying to make a purchase before the overall market goes up, and selling before it goes down. “Buy low, sell high” is another way to think of the goal.
TimerTrac.com keeps abreast of long-term (securities held for longer than one year), intermediate-term (3 to 12 trades a year), short-term (12 to 50 trades per year) and fast timing (several trades a week). It does not yet follow day-trading timers, who place multiple trades per day.
The service was started because the founders wanted the data for their own trades. Now the technology they developed is used to track the performance of other advisers. Subscribers can view a graph that displays the timing of trades and click on an individual trade to review details. A user can click right through to the adviser’s site for additional information. The site includes both long and short players and various combinations.
Dave Garrett, a principal of TimerTrac, says, it’s “useful in helping investors make decisions, deciding whether you can trust an adviser or whether their numbers are for real. We know exactly what these advisers have done since they signed up for us to track them.”
Advisers who agree to be monitored are issued a “TimerTracked” medallion that they place on their site. Any visitor can then click on the medallion and view the various triggers that prompt a service’s trades. When a timer wants to be tracked, he or she can sign up for free but must agree to provide proper contacts and accurate information, among other items. The advisers then forward TimerTrac their signals, complete with the date and time stamp their subscribers would receive.
Statistics furnished by TimerTrac show that some timers are delivering outsized-if not quite magnificent-performance. For instance, Brazilian firm Timing-Lab, which advises on long and short positions, posted a 37.53% gain this year (through Nov. 30) with just four trades in the Nasdaq 100 Trust Shares ETF (ticker: QQQQ), according to TimerTrac’s records. Timing-Lab’s (http://www.timing-lab.com) trading returns were more than four times the Nasdaq 100’s 8.88% rise over the same period.
Subscriptions to TimerTrac are billed either quarterly ($74.95), semi-annually ($119.95), or annually ($179.95). Financial advisers are the main subscribers, says Garrett, but individual investors have also signed on.
If you’d like a free taste of what the site offers, check out the TimerTrac Broadcast. This is an e-mail service, consisting of a digest sent out three times a week. It contains three to 10 current commentaries, provided by medallion holders. “It’s a nice service to see a little bit of TimerTrac without having to pay for it,” says Garrett.
ELECTRONIC TRADING AND INVESTING platform Trade Station (http://www.tradestation.com) recently announced the launch of real-time market data services from Europe’s biggest derivatives bourse Eurex, which is owned by the Deutsche Börse and the SWX Swiss Exchange. Included is information from Eurex’s Futures and Futures Options markets and Deutsche Börse indexes. As a result, Trade Station Securities’ futures brokerage clients can now design and back-test futures strategies and then execute Eurex trades. Subscribers to the platform who don’t use the brokerage services will still have access to the data for charting, analysis and back-testing. The company expects to launch a similar offering for Euronext-Liffe in 2007.
OPTIONSXPRESS (http://www.optionsxpress.com) now offers 24-hour trading for electronically traded futures contracts, including financial, interest-rate, currency, metals, energy and housing futures. To support night owls, optionsXpress also offers 24-hour live help from licensed futures professionals. The firm’s CEO, David Kalt, says the service is designed for the growing number of individual investors who use futures as a portfolio management tool. “Because many of our customers may be less familiar with futures than other investment vehicles, we believe it is critical that we offer market access and licensed support whenever they need, day or night,” says Kalt.
Our 12th annual review of online brokers is in the works, scheduled to appear in early March 2007. What do you wish your broker offered that isn’t currently available to you? Let us know what you want to learn by e-mailing us at firstname.lastname@example.org
Published in Barron’s, December 18, 2006