HOW TO TRADE USING THE CREST MODELS:
Disclaimer: It's your own risk, if you use crest models. We are not responsible
any direct or undirect losses. If you don't understand you should stop using
Crest www pages.
All signals are either buy (long) orders or sell (long) orders. The teaching process is assuming that trades are done at or near the opening price of Monday 09.45AM (EST) . The stop-loss amount is calculated for every Monday, so even if the stop-loss rate on any single stock is hit during the week, the system assumes no trades during the week.
The system has an automatic stop loss of about -15% from the purchase price, but since these stop-loss signals and sell-signals arising from any other reason are created on the basis of Fridays closing prices, occasionally the actual stop-loss will exceed the 15% mark. For this reason it is recommended that traders utilizing these model signals in their trading activities use a stop-loss of 30% calculated from the purchase price at all times.
If maximum stocks in portfolio are 10, user should only invest 1/10 (10%) of capital to each stock.
If a stock appears simultaneously on both buy- and sell list. The signal/order is considered "hold" and no action should be taken.
Occasionaly there are periods when portfolio is empty. On avarage the system invest ~ 40% of time to stocks. System also follows underlying stock markets and how it acts.
What is the CREST
S&P 500
The CREST is a trading system based on a computer program. It may be
considered as a mutual or hedge fund that monitors automatically risks facing
investor’s stocks and gives recommendations on what to buy and what to sell.
The system trades 500 biggest US stocks and follows the index of S&P500.
When the market is going up the system searches stocks that might be
profitable to buy or sell. When the market is going down it sells out stocks
from the portfolio to reduce the risk. In that situation it is unprofitable to
keep capital in stocks because their value is diminishing. It is better to keep
the money on account.
Most mutual funds keep capital in stocks even when market is going down.
Very often managers of these funds also fail to monitor market effectively due
to psychological reasons like fears, hopes and beliefs. Unlike humans,
computer-based systems do not get tired and they don’t have feelings.
The CREST includes 50 different models. Investor can use the most
suitable model according to his risk and profit –expectations.
The system is based on latest mathematical methods. Research and
development of the system took eight years.
How to use the CREST S&P500?
The CREST gives every Monday recommendations on what to buy and what to
sell. Investor moves the capital he wants to invest to his chosen bank and gives
to managers of CREST only the permission to execute systems buy and sell
–orders. Investor’s stockbroker can also read recommendations and do the
trading. Investor gets trade and profit reports directly from his stockbroker
(or bank).
When investor tests the system, minimum capital needed to use the CREST
effectively is 100 000 US dollars. This is because S&P500 companies are big
and prices of their stocks are rarely under 5 US dollars/stock.
Due to the nature of US stock market, best profits are usually collected
between October and March. Biggest rises in the stock market usually occur
during that time. That is why we recommend that investor tests the system for
one year, if he doesn’t begin investment activities in autumn. One year is
enough to make sure that the CREST works.
If investor after testing period wants to continue to use the system, he
will get maximum profit if he uses the system at least three years. This is due
to volatility of stock markets.
Year 2004 has
been difficult for the US stock market. The market has gone up and
down.However, CREST models have
produced good profits, 6-18 %.
Year 2005 has
been difficult for the US stock market. The market has gone up and down.
However, CREST models have produced good
profits, 10-28 %. S&500 index up only 3.8%
You maybe can get much higher gains (tenfold) if you buy options instead stocks,
you should buy call options which strike
price is near current price of the
underlying stock price, and expiration date is at least 1 month from
recommendation date.
When the market is going up, investor can expect on average 30 % profit
with CREST models. When the market is going down, the profit expectation is +15
%. This is a pessimistic estimate, because there are models that have produced
good profits even when market goes down.
The CREST was tested with real money during the year 1999. It produced 40
% profit. Trading was done by Datek Online Bank and full trade reports are
available.
CREST models can be followed on the www-pages.
However, this www-page will be closed in the near future.
CREST models are based on computer learning methods – especially on the
theory of evolution. Historical data of stock market has been used to teach the
program to make the right decisions.
Historical results not quarantee future results.