New Subscribers Quick Start Guide

Thank you for joining the I Know First market forecasting service! This quick start guide is designed to provide you with a basic, but comprehensive introduction to a daily forecast’s contents and give you an easy usage reference to start working with our system.

A daily forecast file is a MS Excel file which contains 3 sheets (found at the bottom):

  • 3-7-14: the short range forecast for 3 days, 7 days and 14 days
  • 30-90-year: the medium-long range forecast for 30 days, 90 days and a year ahead
  • Explanation sheet: contains the symbols for stocks and indexes in the system and the corresponding long/short ETFs
Sample forecast heatmap

For each time range there is a table with symbols:

  • At the top of the table are symbols with positive signals, indicating a “buy” or “long” signal
  • At the bottom of the table are symbols with negative signals, indicating a “sell” or “short” signal

For each stock universe, for example S&P 500, the following data is calculated by the system:

  • The Signal – the movement direction (increase/decrease)
  • The Predictability Indicator – the strength or reliability of the prediction

Signal: Represents the predicted movement direction/trend (not a percentage or specific target price). This number is in the middle of the box (flush right). The signal strength tells how much the current price deviates from what the system considers an equilibrium or “fair” price.

Analogy with a spring: the signal strength is how much the spring is stretched. The higher the tension, the more it’ll move when the spring is released.

The signal strength is the absolute value of the current prediction of the system. The signal can have a positive (predicted increase), or negative (predicted decline) sign. The heatmap is arranged according to the signal strength with strongest up signals at the top, while down signals are at the bottom. The table colors are indicative of the signal. Green corresponds to the positive signal and red indicates a negative signal. A darker color means a stronger signal and a lighter color equals a weaker signal.

Predictability Indicator: This measures the importance of the signal. The predictability is the historical correlation between the prediction and the actual market movement for that particular market. For each asset this indicator is recalculated daily. Theoretically, the predictability ranges from minus one to plus one. The higher this number is the more predictable the particular asset is. If you compare predictability for different time ranges, you’ll find that the longer time ranges have higher predictability. This means that longer-range signals are more important and tend to be more accurate.

*Stocks with the strongest signal and largest predictability are preferable.

Signal and Predictability are independent indicators. While the signal gives the direction and the relative “scale” of the predicted move, the predictability indicator is related to the probability of that prediction to realize, which is based on the past performance of the corresponding predictor. Both of the parameters are important. The higher both values are, the better the investment opportunity is. It is recommended to consider both the signal strength and predictability when investment decisions are made.

Please note:

  1. The longer time range forecasts are, in general, more predictable than the shorter ones, and they should be used to identify the main market trends. We recommend for the first month of your subscription that you watch and learn the system, follow recommended stocks and not actually invest.
  2. The first appearance of a stock in the top list does not mean you should buy it at any price that same day. It merely puts it in a watch list. Unless you are getting it at a significant discount, we advise that you wait three to five days to get it at the better price. Try to get into the market at a discount of at least three percent when the market goes against the prediction intraday or in the next few days after the first appearance of the signal. Alternatively you can buy it in small portions using a cost averaging strategy.
  3. For trading decisions use the most recent forecast.
    Please find attached additional explanation and instruction in the image file that I am sending to you.

I Know First support team is always at your disposal – contact us at [email protected]

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