Investing With An Edge

We all have “tippers” or indicators we use to assist us in our decision-making. The true question is: “How reliable are your indicators at beating the market over time?” Let’s look at some characteristics of strong predictive tippers and you can decide how yours really shake out.

Are your tippers generated by a man,  a machine or a mix of the two? We all follow various sources but we usually tend to follow a rigorous patternrn. Personally, I believe that “standing on the shoulders of giants” and taking a hybrid approach offers the best forecasting capability.

Taking millions of data points and crunching complex algorithms is best performed through leveraging machine automation. Then the human takes over and uses their higher-level cognitive filter to sort out those powerful machine generated numbers and balance out the approach.

Do your tippers work well with indicators or do they stand-alone? In order to make a well-rounded decision, we should have several points of view. But when those multiple approaches are finally selected, they should be complementary and not contrarian.

Rest Easy At Night

Often times if you use several opposing approaches for financial reasons, you’ll find yourself constantly starting back at ground zero on your strategy because one of them is always going down.

We all like to sleep at night, right? So, if you use complementary tactics like social media analytics alongside the technical and fundamental data, you get a steady building-block approach to making sounder decisions… and you’ll get a great night’s sleep.

At the end ask yourself: What is the frequency of my tippers? Are they matching the frequency of my trading? Most people like to bundle their tippers together until there’s a critical mass of momentum in one general direction and it’s there that they can take advantage of it. If your tipper sources don’t allow you to gather enough information together to make a confident decision then it’s time to either add more sources or you change your trading style.

As a U.S. Marine Corps Communications Officer, I’m obsessed with capturing and processing the best information for making critical decisions and have found social media analytics are always at the top of my list. And if you’d like to see more on this subject, you can read more about it here.