What is Four Sigma Trading?
This is a trading system developed over several years (the data here goes back to 1995). It essentially finds stocks that are making a statistical breakout over the recent trading period. The stocks it picks are making abnormal moves to he upside which is probably getting the attention of a lot of people and gaining momentum. The statistical method is something similar to a Bollinger Band, but I've found it to be more accurate. They system only uses data at the end of the day, so this is not a day-trading system. The objectiv-e is to buy and sell a stock in about 50 trading days.

So How Does It Work?
Computers search the entire stock market each evening for a specific trading pattern that we've found has a good chance of a short term rise in price. Once a stock is signaled, the system will open a trade if it continues to trade higher the next day. The system ignores stocks that make large gap up moves to the upside on the signal day since we've found they typically lose momentum faster or are the result of buyouts or other factors that can keep the stock from moving up.

How to Get Out?
Once the position is open, we hold it for 50 days and then sell it. Why 50 days? We found that this is about enough time for the stock to make its short-term move so we can cash out and move on to something else. We're always looking for a more efficient way to profitably get out of a stock, so if you have any ideas, please let us know by using our contact page.

What are the results?
Each year is different, but since we've been keeping track, the system has averaged about 19% every 50 days since 1995, but that included some very good years from 1995 to 1999 when the stock market itself averaged 25% each year. Since the year 2000, when the market began having a rough time averaging just about a 3% gain each year and we've averaged about 10% every 50 days with one losing year. That's not to say there isn't volatility. The sytem is picking stocks that gain a lot of attention from the market and can have some swings that not every investor can stomach. We think investing a small portion of a portfolio in this strategy can give you the edge you need to beat the market.

What Does the System Cost?
During our beta test, this is all free. You have access to all of our past and current picks and holds. To see our past picks, just select a range of dates below to see the stocks the system has traded.

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