Approach

USDJPY

TECHNICALS FIRST, FUNDAMENTALS SECOND

Both are crucial to any final analysis but, between the two, we prefer technicals. Technicals incorporate all that is known about a market including the perceived fundamentals by all market participants.

 

Further, fundamentals do not account for or predict shifts in mass psychology. In manic bull markets, valuations rise to unreasonable heights and in capitulatory bear markets, they fall to unreasonable depths. In an emotional world where fundamentals often get thrown out the window, technicals are our most reliable guide.

METHODS: RELATIVE VS. PRECISE

Most technical methods signal overbought and oversold conditions relative to “normal” conditions. (“Normal” itself is relative over time.) However, both overbought and oversold conditions can persist for some time and can run against an investor well past expectations.

 

Unlike relative methods, precise methods provide distinct target prices to buy and sell. Those targets are absolute and can be used for precision trading. Our methods are precise, unique, and they work. We provide buy points at our target lows and sell points at our target highs.

HOW DO OUR METHODS WORK?

Most precise forms of technical analysis rely on natural symmetry between highs and lows in price patterns. Our methods are based upon several well-established forms, but have been corrected for some of their major flaws. We are aware of most TA methods and their practitioners and, to our knowledge, none have discovered our unique approach.

 

While we have identified the patterns that underlie our methods, and know these repeating patterns have persisted for over a century, we don’t yet understand the underlying physics that governs their actions. This is sometimes the case with pharmaceuticals, where a drug’s underlying mechanism is poorly understood but a repeatable effect is noticed nonetheless. What we do know is that the underlying action is a natural occurrence, similar to Newton’s third law or to the Chinese concept of yin and yang. In time, big data or some new insight may better answer this question.

Team

Matthew Demeter

Matt received a Bachelor’s degree in Biology and Genetics from Duke University.  After graduation, he continued his research with a private New England biotechnology company where he authored papers in the field of cellular aging and senescence.  After seven years as a laboratory scientist, Matt entered the money management business in 2004 and began his study of technical analysis systems.  After ten years of research into technical-based trading systems, Matt developed and perfected the unique proprietary methods offered here at Demeter Research.

Eli Giombi

Eli received a Bachelor’s degree in Math and Economics from Northwestern University.  He has an MBA in Finance from Yale.  He is also a CFA charterholder.  Eli has worked at insurance companies, a trading company, and a multi-family office.  His most recent role was in investment risk where he was responsible for design and implementation of the risk management framework, as well as ongoing risk management at both the portfolio and underlying manager level.  Eli serves as Trader and Risk Manager for the Theta-Decay Strategy.

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