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Scott Juds Scott Juds
President and
Chief SectorSurfer

If your question isn't answered by anything else, I'm here to answer your technical questions, fix broken things, and help you get started.


Other Help Available: 

Online User Guide

Building SectorSurfer Strategies
Understand SectorSurfer Charts


Video Tutorials

Higher Returns - How its Possible
Lower Risk - How its Possible


My Strategies Page Tour
Retirement Calculator Tour

SectorSurfer Charts
Making Great Strategies


Diversification Heresy: Breaking
  Through the Efficient Frontier



TIP: Web Page "Find Text"

Hit Ctrl-F in your browser to find text within a page. Internet Explorer 8 opens a Find search-bar just above the top of the page. Text entered in the search bar becomes highlighted in yellow where ever it is located in the web page. Try it!


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A complete search of our site for topics, word definitions, strategies and other information.


FAQ —  Frequently Asked Questions

Click a Category to Select and Expand

• Browsers, Cookies, Screens and Operating Systems
Which Web browsers are compatible with SectorSurfer?
Why does the Log In window keep popping up? (Cookie Settings)
Why the video tutorials don't play, or why they are choppy.
Charts / pages are too wide for the screen. Can I adjust the width?
 

• My Account Management & Configuration
How to update my credit card on Amazon Payments.
How to change subscription type.
How to cancel my subscription.
How to delete my SectorSurfer account.
Control email trade alert delivery time.
Control email trade alert reminders.
Where to change user name & password.
 

• SectorSurfer Basic Concepts and Usage
What is True Sector Rotation?
How StormGuard reduces risk.
Why taking control urgently matters.
Quick video tutorial of My Strategies page.
Online User Manual, complete detail.
How to be a Prudent Investor.
Stocks vs. sectors and asset classes.
 

SectorSurfer Advanced Concepts and Theory
Building Custom Strategies.
Making SectorSurfer Portfolio Charts.
How to be a Prudent Investor.
Stocks vs. sectors and asset classes.
SectorSurfer's algorithm validation.
SectorSurfer's algorithm technology.
Using inverse/shorted funds.
Using ultra/leveraged funds.
Stocks vs. Sectors and asset classes.
Return vs. trade execution delay.
Why limit to just 12 funds in a Strategy? Aren't more funds better?
Why exclude money market funds?
My Custom Strategy has no track record yet. How can I trust it?
• Backtesting: trend signal stationarity and sector rotation vs. curve fitting.
 

• Brokerages, Trading Fees, Hold Time, Data
Why aren't all U.S. stocks available for making Strategies?
Why does Trade Month-End perform better than Trade Any Day?
How can I change the Strategy minimum hold time?
How does SectorSurfer incorporate fund early trading fees and minimum hold time?
Can I use funds from different brokerages in a single Strategy?
Foreign stocks & funds may not be available from your brokerage.
How does SectorSurfer account for capital gains and dividend distributions?
How does SectorSurfer deal with fund sales load fees?
How are fund management fees incorporated in Strategy returns?
Why not all fund classes are available to everyone. How to determine availability.
 

• Advanced Investing Techniques
How can I make SectorSurfer react faster?
How many Strategies should I have to be a Prudent Investor?
Can I turn off StormGuard to better use inverse/shorted funds?
About Ultra/Leveraged ETFs and mutual funds.
Would it help to use trailing stop loss orders with Strategies?
 

• Strategy Questions
How does a Strategy relate to my IRA or 401(k) account?
How can I store a chart for records or later comparison?
My Custom Strategy really has no real track record yet, how can I trust it?
You say not to include a money market fund, yet sometimes it's better. Why?
Why is there a limit to just 12 funds in a Strategy? Aren't more funds better?
How does SectorSurfer account for capital gains and dividend distributions?
Where, on the charts, does backtesting end and real performance begin?
Isn't backtesting susceptible to the curve fitting problem?
Why has my Strategy changed? It is not the same as when I imported it.
How does SectorSurfer determine when a trade should occur?
When are Trade Alert emails sent?
How can I make SectorSurfer react faster?
 

• Trend Questions
Why is the trend ranking inconsistent between two Strategies?
Why does the trend chart change when changing the Trade Hold time?
Why does adding a fund to the Strategy change the trend chart?
How does SectorSurfer do the trend calculation?
Do I buy the one at the top of the trend chart?
The top trend position has changed. Why don't I have a trade alert?

• StormGuard Questions
What is the basis for StormGuard?
Why doesn't StormGuard react faster to events?
Why is the StormGuard indicator different for different strategies?
How can I turn off StormGuard so it doesn't interfere with Inverse ETFs?
 

• My Strategies Page
See a short tutorial video on how to use the My Strategies page?
How can I share a Strategy with a friend?
Why is my FREE Strategy not FREE anymore?
How can I download Strategy data to a Spreadsheet for further analysis?
Where can I get explanations of everything on a SectorSurfer chart?
How do I make a Custom Strategy for my IRA, 401K, 403b, or 457b plan?
How can I save a chart for records or later comparison with a modification?
Can I un-do a trade, or a trade acknowledgement?
How do I delete a fund that has become obsolete?






 

SectorSurfer is fully compatible with the current versions of the four main browsers on the market: Microsoft Internet Explorer, Google Chrome, Mozilla Firefox, and Apple Safari. We have also verified compatibility with both PC and Apple/Mac hardware platforms, including the Apple iPad.

Our site is fully functional from most of the new smart phones, such as the Apple iPhone and Google Android phones. At some time in the future we will "make an app for that" to improve usability on the smaller screens.
 
If you are experiencing problems with one of these browsers/platforms, the following are some things you can try: (1) Make sure you have the current browser version. We use quite advanced features to update and display content in faster more aesthetic ways that just wasn't possible in, for example, IE-6 or earlier versions. (2) Chrome and Firefox are notorious for holding onto (caching) old versions of JavaScript code (which puts the smarts in page functionality) rather than downloading current versions each time you visit our site. This can cause changes or improvements we make to not work unless you hit the Ctrl-F5 keys (hold down 'CRTL' and hit F5) which forces the browser to refresh all of the files from our web site. (3) If you have logged onto a second computer and then returned to your first computer that remains logged in under the same username and password, you will find that the first computer no longer responds as expected because control over your account has been taken by your second computer. To return control to your first computer, first click the Log Off button, and then again log on so that this computer is now recognized as the one controlling the account.


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To use this website, cookies must be enabled. A cookie is a small file stored on your computer's hard drive that allow your browser to retain information about who you are and about active sessions you have with a website so that you remain recognized and your information persists from click to click throughout the website and throughout a multi-step transaction.

If the Log In screen repeatedly pops up when you try to Sign Up or when you are trying to access  the My To-Do List, My Portfolio, or My Strategies pages then you probably have disabled cookies on your computer.  Click here for more information about enabling cookies.


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If your computer won't play the video tutorials at all, it may be caused by one of these three problems: (1) you don't have the Adobe Flash Player or RealPlayer installed on your computer, (2) the version of your the Adobe Flash Player or RealPlayer may be out of date, or (3) the video player software may have become corrupted or deleted by installation or removal of other software. To fix this problem you should download and re-install the most recent copy of the Adobe Flash Player (click here) or RealPlayer (click here).

If the video tutorials are choppy as they play, it may be caused by one of these two problems: (1) you may have a slow internet connection, which can be diagnosed by watching the buffering bar below the screen to see if it is buffering the video faster than it is playing it, or (2) your computer may be too old and slow, or overburdened by demands from other software. Our videos typically have four times the screen size/resolution than do usual YouTube videos because of the detail resolution needed to show charts. If your connection is not quite fast enough (at least a sustained 500kb/s) it may not keep up, and you may need to pause the player while the video loads. Older computers running WinXP with processor clock speeds under 800MHz (about 10 years old) are likely to show some amount of choppy play, especially if you have other software active (like virus scanners, updated software, or indexing software such as Google Desktop). If your computer is slow, it will often help to shut down as many other applications as you can, or wait until they complete, and then view the videos.


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If some of the SectorSurfer pages and charts are too wide for your computer screen, there are two possible remedies: (a) adjust the browser screen zoom control, and (b) change the computer settings for the video adapter.

Virtually all browsers now support the Screen Zoom function executed by holding down the Ctrl key and moving the mouse-wheel. The zoom percentage is generally shown in the lower status bar, with 100% being normal zoom. The browser scales font sizes and graphic image sizes together to keep the visual layout appearance consistent over a large zoom range.  The zoom feature can also be accessed on browsers from the menu. For example, in Internet Explorer, it is found on the menu at Page - Zoom.

SectorSurfer is designed for a minimum screen width resolution of 1024 pixels, which should be no problem for virtually all desktop and laptop computers (except the new mini-laptop computers) manufactured since the year 2000.  However, even though the native screen resolution is at least 1024 x 728, someone may have purposely (or accidentally) changed the screen resolution to 800 x 600 to make the text more easily readable if close vision is less than perfect. If you love your 800 x 600 screen resolution, then you will have to tolerate scroll bars for our web pages. However, you can change the screen resolution of your computer by following the detailed instructions for Win-7 found HERE, or Win-XP found HERE.


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Basically, maybe. It depends on which state's 529 Plan you use. In the wisdom of the IRS, participants are not allowed to have direct or indirect control over the investments in a 529 account. The 529 Portfolios are invested in a combination of mutual funds, or a single mutual fund, having a predetermined composition of stock equity funds, bond funds, and money market instruments. However, some 529 plans include the concept of an "Individual Portfolio" which will get you down to the individual mutual fund level you need for SectorSurfer to help.

An Individual Portfolio is defined as a type of static asset investment vehicle used in 529 plans from which you can create your own diversified portfolio from among the plan's mutual fund choices. Unlike an age-based portfolio, this will not rebalance automatically; you have to make the reallocations manually -- according to SectorSurfer's guidance. Unfortunately, a large number of states do not provide this option, or do not provide it in a way that gets you to individual mutual funds.

You can usually find out if your state offers Individual Portfolios as an option by finding the link on their site to Investment Options and drilling down. Some example states for which SectorSurfer will work include New York, California, Massachusetts, New Hampshire, and Delaware. Some example states that are not compatible with SectorSurfer include Wisconsin and Illinois. Some helpful links to all state 529 plans can be found by clicking here.


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The short answer is YES, in most cases — meaning that within one brokerage you can get many funds sponsored by other brokerages without moving your money to the other brokerage, but you don't want a Strategy with funds that would force your actual bucket of money to move from brokerage to brokerage.

The funds you use need to be accessible from the brokerage where the money in your account actually lives. For example, if I have my money in an account at TD-Ameritrade, I will be able to buy most of the significant mutual funds of the large mutual fund and ETF companies such as Vanguard, Fidelity or American. "Most funds," however, does not mean all funds. In addition sales charges may also be an issue.

While the trend is definitely toward funds becoming "no-load" funds, meaning no up-front sales charge, you need to research how your brokerage handles each fund you have in your intended Strategy. Some funds are fully no-load funds, some may be no-load provided you are trading between funds of the same fund company, and some funds may not be available through your brokerage at all.

On the down-side, generally the trading fees for mutual funds are quite high (~$50 ) if you are trading it at a brokerage other than the fund's sponsor. If you are trading $50,000 or more, this may be a trivial amount, but it may feel like a more considerable amount for small accounts.

You don't ever want to consider a Strategy that requires shuttling your money from one brokerage to another, and you don't ever want to consider a Strategy that requires you to pay an up-front sales charge.

You can usually find information about sales charges and early trading fees on one of the detail tabs of the brokerage's page after requesting a quote for the fund of interest.


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On the My Strategy page, each line has an Information icon which opens a window that, among other things, allows you to change the minimum hold time for the Strategy. The default setting is Automatic; however, other choices include Next Day, Week End, Month End, 30 days, 60 days, 90 days, and 1 Year. This is a rather complicated topic as many considerations are involved — so please read this long explanation carefully.

First to consider is an early trade fee that some funds impose if you sell the fund after a period shorter than the required minimum hold time for the fund. For example, all ETFs have no minimum hold time, and thus no early trading fee. Many mutual funds also have no minimum hold time limiting the number of times you can buy and sell in one year, which is generally not a problem with SectorSurfer. All Fidelity Sector Funds have a 30-day minimum hold time and a .75% early trade fee. Fidelity International funds typically have a 30- or 90-day minimum hold time and as much as a 1.5% early trade fee. Other fund companies similarly have trading rules to prevent excess burden on the fund from frequent trading of the fund, and is  particularly common when some portions consist of international or other difficult-to-trade shares.

When Automatic is selected, SectorSurfer first determines if a new fund has taken leadership by the end of each month. Then SectorSurfer examines a file containing the minimum hold time and early trading fees for many (but not all) mutual funds. If the currently held fund was not held for its required minimum hold time, the fund is held for another month, otherwise a Trade Alert is generated. It is our experience that month-end trading actually provides a superior balance of performance and trade frequency. The Automatic setting provides this superior balance while ensuring that the minimum hold time for the currently held fund is respected.

When any of Next Day, Week End, or Month End is selected, SectorSurfer does not utilize any minimum hold time, but employs methods that prevent erroneous rapid trading when the two best funds are trending neck-and-neck in their race. Otherwise, selection of Next Day allows SectorSurfer to generate a Trade Alert on any day when a new fund takes leadership, selection of Week End allows SectorSurfer to generate a Trade Alert only on a week end when a new fund takes leadership, and selection of Month End allows SectorSurfer to generate a Trade Alert only at month-end if a new fund takes leadership. Generally, month end trading produces superior results for most Strategies.

When any of 30 days, 60 days, 90 days, or 1 Year is selected, SectorSurfer will wait the prescribed minimum hold days and then, on the next instance of leadership change, a Trade Alert will be generated. One of these options may be needed to abide by trading rules within your tax deferred retirement or savings plan.

Note: At this time, our files contain the minimum hold time information for these fund families: Fidelity, Vanguard, and American Funds. This will be updated as our coverage expands.


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On the My Strategy page, each line has an Information icon which opens a window that, among other things, allows you to change the minimum hold time for the Strategy. The default setting is Automatic: however, other choices include Next Day, Week End, Month End, 30 days, 60 days, 90 days, 1 Year.

More information about how these work can be found in the FAQ question above.


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Since you don't ever want to consider a Strategy that requires you to pay an up-front sales charge that destroys net returns, SectorSurfer assumes that you have researched the availability and fee structure of the Strategy funds as offered by your broker.

While the trend is definitely toward funds becoming "no-load" funds, meaning no up-front sales charge, you need to research how your brokerage handles each fund you have in your intended Strategy. Some funds are fully no-load funds, some may be no-load provided you are trading between funds of the same fund company, and some funds may not be available through your broker.

It is possible to operate most SectorSurfer Strategies without front-end load fees at most brokerages, but it is true that some funds do not receive the same trading treatment when purchased at brokerages other than the fund-sponsoring brokerage.

So, if you have done your homework (including moving your accounts to a more friendly brokerage if necessary), you will be able to operate SectorSurfer Strategies without concern for fund loads, so that's what is assumed in SectorSurfer's algorithms and charts.


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A lot of analysis and press has been given to fund management fees versus the relative performance of a mutual fund within its class. For investors, this is a meaningless distraction, and I'll tell you why.

If company A says they have Fund A which has averaged 5% annual return over 30 years, and company B says they have Fund B which has averaged 6% annual return over 30 years with a similar risk rating, which one are you going to choose?  Will your decision change if Fund A is the net after its 1% management fee, and Fund B is the net after its 3% management fee?

The answer always comes down to performance measured when it gets to your pocket. Higher management fees could be a good thing if they produce a higher return, but who knows what the real magic is? What's important is the all inclusive bottom line return, not the expense of producing it.


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A Strategy manages a "bucket of money" in your portfolio. Your portfolio, for example, might contain both a Roth IRA and a 401(k) account. The Roth IRA might be divided into three buckets of money — each invested in a particular fund. Likewise, the 401(k) might be divided into two buckets of money — each invested in a particular fund.  These five buckets of money are called account positions

At some time in the future each of those funds may no longer be the optimum place to invest  that bucket of money, so a management strategy is needed for each of these to tell us what to do next.

A SectorSurfer Strategy is a themed group of funds, and owns only trend leader. There is no justifiable reason to own even the second place fund.  It is SectorSurfer's job to determine which one (and only one) of these funds to own at any particular time.

You might currently have multiple account positions in your portfolio because you had been following a "diversification strategy." If you have three account positions under a diversification strategy, you can optionally roll them all together into one account position to be managed by a single SectorSurfer Strategy (recommended), or you could choose to use multiple SectorSurfer Strategies, each one managing one of the account positions.


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This is really the bottom line question in a number of ways. We have concluded that most people fit into one of two groups on this matter: 1) show me a sufficiently long track record and maybe I'll consider it, or 2) convince me that this methodology is based on principles that one can depend on and I'm ready to go.

For the first group, we concluded that it really wouldn't matter what data we posted, the data would be considered suspicious. One way to feel more comfortable about it would be to talk with your financial advisor about it. Otherwise, the best thing for you to do is to open a Free account and monitor some of the Free Strategies over a period of time that suits you. You can also monitor Premium Strategies, but with a 90-day lag in reporting.

If you go the route of following a strategy's results for a while, certainly 1 month, 1 quarter, or 1 year would be too short to gain confidence, but perhaps in 10 years there will be another market cycle and you can be "for sure for sure." But, nobody really wants to blow a decade checking out a new ride and then finding out they missed the train. So, it would seem that the only route to a faster decision requires getting third-party validation from someone you trust to understand the Sector Rotation Theory and render an opinion — perhaps a knowledgeable family member, or a trusted financial advisor?

 

For the second group, the study of the Sector Rotation Theory page is paramount to understanding these key facts summarized below:

  • SectorSurfer uses time domain data literally ignored by Modern Portfolio Theory and thus can detect trends that would be technically impossible to detect within Modern Portfolio Theory.

  • SectorSurfer does not rely on fickle pattern recognition, such as the head-and-shoulders or cup-and-handle patterns that relate to overall market movements, but not to sector differences.

  • The trend signals extracted by SectorSurfer rely on whether or not trending characteristics are inherent within the market data. The Hurst exponent analysis performed by Peters across all capital markets proves it is indeed present in the data.

  • The Hurst exponent analysis was also performed by Peters across 7 decades and found to be statistically stationary in spite of war, politics, technology, or the economy. This stability is afforded by the character of humans whose reactions create trends. This character will continue to provide the same quality signals into the future.

  • A Strategy created today will be set up with a fixed set of parameters suitable for its character over the 20 years of the database, and thus one can expect that this fixed set of parameters will work in the same manner in the future because of the statistical stationarity shown to be inherent in the trend character of the markets over time.

  • Please refer to the Sector Rotation Theory page for further discussion of the above.

In either case, you have a judgment to make: "What's the upside and downside for continuing investing as you have been versus using SectorSurfer to point the way? And, do you really want to row the same boat through the waves of the next market cycle? 


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Method One: If you right-click on the chart, a pop-up menu will appear. Click the Copy, or Copy Image, option and a bit map version of the chart will be placed on the Windows clipboard. You may then paste it into most word processor and email client editors.

Method Two:  If you right-click on the chart a pop-up menu will appear. Click Save Image As and you will be provided a further file manager window to determine where to save the image.


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The problem with adding a money market fund into the mix of equity (stock) mutual funds is that it has an entirely different character. While equity mutual funds have their differences (which is a good thing and required for surfing), they also have their common movements with the market. If we get a big economic report or if someone blows up something significant, the market moves in unison — except for money markets, which more or less remain static.

This means that common market movements do not upset the determination of which of the funds is doing better than the others. The one doing better will be the one which generally is gaining a little more or losing a little less than its peers (a relative measure) on a consistent basis. With the money market, however, common market movements do not apply and can create the illusion that one should jump in or out of the stock funds based on relative movements and a decision mechanism intended to optimize sector rotation signals. This can lead to whipsaw trade signals that tell you to sell at the current low low price only to find that the price then heads higher and you buy back in at a higher price than what you sold for. So, it would have been better to have just stayed put. Moving to and from cash requires a different decision algorithm than switching between equity funds.

When you mix money market funds with stock mutual funds you get a relatively erratic decision process. When we reviewed the value of adding a money market fund to numerous strategies, it is perhaps helpful 50% of the time and harmful 50% of the time. That tells you that incorporating it will likely change the results, with a 50-50 chance that it will be in your favor. Therefore it is a distraction, and if you had luck last time, it is not likely to be repeated.

Bottom line: Let SectorSurfer's StormGuard feature worry about taking you in and out of cash. It is designed for that task. Keep money market funds (and their like) out of Strategies containing stock equity mutual funds.


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More is not necessarily better for performance, but it does make Strategy building easier.

On the question "isn't more better," consider that the highest performance Strategy documented to date is the Fidelity KickAss Sectors Strategy which holds only FSELX, FSHCX, FBMPX, FSVLX, and FSESX. Of course, the reason this can be possible is because these funds fairly well represent the major economic sectors around which investors rotate their money. Unfortunately, most funds are at least semi-diversified and lack the punch available from such basic sectors. Adding more funds to the KickAss Strategy does not significantly improve its performance; and sometimes will add distractive noise to the decision process.

On the question of the "limit to just 12 funds," there are a number of reasons why 12 is the limit. First, as noted in the paragraph above, more is not always better. Second, throwing all 20,000 funds and ETFs into a single strategy would be an unwieldy data handling process with quite long processing times, and few people have all 20,000 funds as an investment option. Third, to display comparative chart data for the constituent funds of a Strategy, there are limits to how many colored wiggly lines one can put on a chart before they all run together. So, 12 was selected as a reasonable balance to those issues. That's it, no magic — except that it aligns with the number of zodiac symbols and (check this out)  the number of planets in our solar system.


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SectorSurfer utilizes data from Investors FastTrack which is known as having the most accurate data for mutual funds in the market. When there is a capital gains or dividend distribution declared by a fund of X%, normally you receive X% more shares but the price is reduced by X%. In the end you have the same account value, but the X% is then identified as being taxable if within a taxable account.

FastTrack data handles this the same way stock splits are handled by other charting services. The current price is adjusted appropriately to the current NAV (net asset value) and all prior prices are also adjusted by X% so that there is no step glitch in the data. Your account did not change by X%, and so the chart should not show a change that day of X% which might otherwise lead to incorrect conclusions about the fund's performance.


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In the far right column is the link to your brokerage for making the actual trade. You can change the brokerage link to another by clicking the Brokerage brokerage icon icon. There you can select from a list of dozens of brokerages, or input your own brokerage name and link.


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On the left side of the main chart there is a date indicating when the Strategy was born. It is set to today's date whenever you edit a Strategy and change either the Min Hold Time setting or any of the ticker symbols, both of which trigger SectorSurfer to re-optimize the Strategy parameters for the current set of conditions you've set. SectorSurfer charts show a combination of backtested performance and real-time performance where the backtested performance is shown to the left of the Born On Date and the real time performance is shown to the right of the Born On Date. Certainly, Strategies with older Born On Dates have more credibility than do freshly optimized Strategies. However, the trend character of Strategies does exhibit statistical stationarity and is why backtesting to determine the character of a Strategy is valid. See Trend Signal Stationarity on the Sector Rotation Theory Page for additional technical information.


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Changing any ticker symbol or the Strategy minimum hold time causes SectorSurfer to re-evaluate and determine what the best parameters are for the Strategy, and could result in using a longer or shorter trend measurement period, and consequently a possible change in the one designated as the trend leader. Determining the trend leader depends heavily on the period of time over which the trend is measured.

Furthermore, if you change something in a Strategy and then reverse the change, there is no guarantee that the original set of trend parameters will be used again because parameters are determined in full view of all past market data currently available. Thus, parameters set with data that is current, versus data from one year ago, will likely be a little different. A difference in how trend is measured can result in a slightly different path of fund ownership.

Consider that there are many routes to your favorite restaurant, and right now there is an optimum set of roads in the route. But that may change if some roads are closed and new ones are opened, or if you impose a rule for how frequently you can make a turn.

Likewise in a Strategy, there are often multiple sequences of ticker symbols that produce fairly similar results, and small changes to the Strategy can cause a different sequence to become the optimum sequence.


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Nightly processing of all Strategies with well-cleaned fresh market data typically begins between 9 p.m. and 10 p.m. each evening and may last through most of the night. When your Strategies are processed any trade alerts will be immediately sent unless you have specified a blackout period of time for receiving trade alert emails on your Application Settings page (usually done to prevent smart phones from announcing email in the middle of the night).


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It's not uncommon to see a pair of funds in one Strategy that have trend ranks reversed when they are both also in a second Strategy. The reason this is possible (and rational) is that there is no perfect fixed definition for "Trend" that is optimum for everything. One fund may have a better one-week trend, but the other may have a better one-month trend. Thus, positions can swap depending on how the trends are measured. Each Strategy has a custom set of trend algorithm parameters that are determined specifically for the set of funds in the Strategy. If one or more of the funds change, it is likely there will be at least a small variation in what constitutes the optimum measure of trend for the Strategy.


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Changing Minimum Hold Time will cause the algorithm to re-evaluate and determine what the best parameters are for the Strategy, and could result in using a longer or shorter trend measurement period, and consequently a possible change in the one designated as the trend leader. Determining the trend leader depends heavily on the period of time over which the trend is measured. Imposing a holding period imparts a delay effect much like changing the trend measuring time constants, thus it should be expected that changing the Minimum Hold Time rule will case a change in the optimum trend measuring time constants.


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Note that each time you change one of the ticker symbols, SectorSurfer will re-make your Strategy chart so you can immediately see the effect of your changes. Changing any ticker symbol or the Strategy minimum hold time causes SectorSurfer to re-evaluate and determine what the best parameters are for the Strategy, and could result in using a longer or shorter trend measurement period, and consequently a possible change in the one designated as the trend leader.

Determining the trend leader depends heavily on the period of time over which the trend is measured. Performance ranking last week is not the same as performance ranking last month. Consider that there are many routes to your favorite restaurant, and right now there is an optimum set of roads in the route. But that may change if some roads are closed and new ones are opened, or if you impose a rule for how frequently you can make a turn. Likewise in a Strategy, there are often multiple sequences of ticker symbols that produce fairly similar results, and small changes to the Strategy can cause a different sequence to become the optimum sequence


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By definition, a trend measures the average value of some parameter. In this case we are concerned specifically about return. There are many kinds of averages, including the Simple Moving Average (SMA), the Exponential Moving Average (EMA), and many other algorithms that use other weightings of prior data to determine the value. SectorSurfer uses a complex multi-order EMA derived from matched filter theory to optimize the extraction of the useful trend signal from noisy market data.

Each set of stocks/funds may have a different character (i.e. bonds are not like mutual funds, and neither have the character of individual stocks) and when a new combination is presented to SectorSurfer it automatically determines what set of parameters to use. See this summary comparison of the efficacy of different moving averages and time constants to understand its significance.


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Trade Alert vs. Top Trend: It is important to understand that just because a fund/stock makes it to the top of the Trend Chart does not mean that you should instantly run out and buy it. Each Strategy also has a "Minimum Hold Time" rule, such as "Trade Month-End," which determines when the Strategy will actually employ the Trend information and possibly generate an email Trade Alert. In the case of Trade Month-End, only after the market close on the last trading day of each month will the algorithm check the Trend for each of the funds/stocks to determine if there is a new leader, and if so, update the Sell/Buy information for the Strategy and send an email Trade Alert.

It's not uncommon for one fund to be in the lead mid-month, but another to take the lead near the end of the month before the actual decision is made. Only with the "Trade Any Day" setting will a new email Trade Alert be sent on the exact day there is a new trend leader. Reasons for selecting more restrictive settings include early trade fees for some mutual funds, and that generally, month-end trading actually performs better as described here. You can edit the Strategy's Minimum Hold Time parameter by clicking the Information icon to the right of the Strategy name on the My Strategies page.  


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Trade Alert vs. Top Trend: It is important to understand that just because a fund/stock makes it to the top of the Trend Chart does not mean that you should instantly run out and buy it. Each Strategy also has a "Minimum Hold Time" rule, such as "Trade Month-End," which determines when the Strategy will actually employ the Trend information and possibly generate an email Trade Alert. In the case of Trade Month-End, only after the market close on the last trading day of each month will the algorithm check the Trend for each of the funds/stocks to determine if there is a new leader, and if so, update the Sell/Buy information for the Strategy and send an email Trade Alert.

It's not uncommon for one fund to be in the lead mid-month, but another to take the lead near the end of the month before the actual decision is made. Only with the "Trade Any Day" setting will a new email Trade Alert be sent on the exact day there is a new trend leader. Reasons for selecting more restrictive settings include early trade fees for some mutual funds, and that generally, month-end trading actually performs better as described here. You can edit the Strategy's Minimum Hold Time parameter by clicking the Information icon to the right of the Strategy name on the My Strategies page.  


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The StormGuard Indicator may be slightly different from one Strategy to the next as can be seen when viewing a few of the charts on the Example Strategies page. This is because each Strategy is separately evaluated to determine the amount of storm protection required according to the character of its funds.

For example, a Strategy composed of broadly diversified funds will do best if it exits to $CASH as soon as broad market averages start a protracted decline, whereas other Strategies composed of sector funds are likely to have one or more funds doing a bit better than the broad market averages as the market decline commences, and thus should be allowed a little more running room before exiting


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There are two good ways to share a Strategy with a friend:

1.) Click the button on the chart and fill in your message and the destination.

2.) Send the Strategy-ID by email. Click the Information icon to find the Strategy-ID, then copy and paste it into an email. Your friend will then import the Strategy
 by clicking the Strategy icon, pasting the Strategy-ID into the text box at the  Strategy-ID into the text box in the upper right, then finally clicking the   button above the text box.  


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Our FREE Strategies are strictly limited to use in their posted form. Changes made to a FREE Strategy turn it into a Custom Strategy and cancel it's Free Status. 

In order to restore such a Strategy to its original FREE status, it is not enough just to reverse the change because the software only knows that you have made a change and not what it has been changed to, so you must again click the Strategy icon, find the Strategy, and again import it to your personal list.


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