Anyone that trades on the stock market will know the importance of timing your entry and exit point. In fact, it is this fundamental issue that can determine the difference between a successful trade and a loss, irrespective of the share being bought and sold.
Whether you’re a long-term investor or frequent trader, the importance of market buy/sell timing remains high.
With this being the case, there are myriad opinions, strategies, and concepts around the practice of understanding buy and sell signals. For those that get it right, the monetary gain can be considerable.
One such method of timing stock trades is TimingCube. An app that uses complex algorithms (more on this later), that used to be the domain of large institutional investors only.
In other words, by using TimingCube you will have a better chance of correctly timing your trade and therefore having a successful result. Too good to be true? Either way, I couldn’t wait to try it out.
What follows is an in depth review of my experiences using TimingCube, and whether it actually works.
A Brief Overview of TimingCube’s Services
Timing cube is a market timing cloud-based SaaS web app that provides an automated investment advisory platform that generates signals on when to buy or sell shares in the stock exchange.
It is a cost-efficient service designed to provide easy access to transparent stock market timing signals and long-term trend timing. It was initially built as an advisory service against selling shares in markets where capital losses were high.
These shares are the common stock of publicly traded companies whose equities are offered as an IPO or are traded in the stock exchange. Currently, TimingCube works by detecting changes in stock trading trends and then creating synchronization signals based on purchases, sales, and cash exchanged in the NASDAQ stock exchange.
These signals are then sent via email to the client. The investment models provided by TimingCube allows the investor to take a position on whether to buy or sell a mutual fund, index fund, or ETF, with the system being biased towards the ETF over mutual funds.
There are 3 investment models offered, each tailored to targeted types of investors. The Classic Model is a mechanical model that uses the price-volume of IXIC to determine market trends.
It was developed and deployed in 2001 for long-term investors, and signal generation is done 3-5 timers per year. The Turbo model was launched in October 2015 as a mechanical investment model based on the price-volume of QQQ.
Signal generation is done at least 4 times per month in bullish stock markets which makes it suitable for active investors.
Relatedly, if the classic model is used to rank the strongest ETF global markets, then the result is the World ETF Ranking.
Lastly, it offers 2 paid subscription plans: monthly and annual plans.
A cost-effective way of obtaining timing signals
TimingCube is a cost-efficient service designed to provide easy access to transparent stock market timing and long-term trend timing.
Principally, it serves to generate trend timing signals, of which there are 3 types of these signals: buy, cash, and sell signals.
Why is timing so important?
Why are these signals important? An axiom of stock trading is to buy low and sell high. This requires the investor to know when to sell his/her stocks because an investor can only make a profit or loss when (s)he sells stocks that (s)he owns.
As is explained later, good timing allows the investor to maximize the capital gains on the stocks, while poor timing and a bad decision can make the investor lose a lot from his/her stock portfolio.
Basically, bad timing can be catastrophic in stock trading as one can suffer irrecoverable losses. A timing tool can at times be the deciding factor of whether one profits or loses in the stock exchange.
TimingCube – An app that detects buy/sell signals
TimingCube is designed to help the investor to buy stocks at an opportune time, and then hold on it, i.e buy and hold until a signal is issued that it is favorable to sell the stocks.
The buy and hold allow the bought stocks to accrue capital gain that can be monetized when the stocks are sold. Still, how does TimingCube generate these signals?
This web app uses a trend timing model driven by power algorithms to monitor trend changes in the stock exchange, with absolute preference being given to NASDAQ.
It detects changes in stock trading trends and creates synchronization signals based on purchases, sales, and cash exchanged in the NASDAQ stock exchange.
These signals are sent via email to the client, who is the trader/investor who has signed up to use TimingCube services.
These signals allow the client to take a position regarding buying or selling stocks, and as expected, these signals are called buy signal and sell signal respectively.
Even so, TimingCube does not tell the investor what to buy or sell, but instead provides a dataset that helps the investor make an appropriate decision on how to grow his/her investment portfolio.
The Brains Behind TimingCube
In the field of financial technology, TimingCube is considered an investment advisory system.
This system has been designed by Frank Minssieux and Dr. Serge Dacic. Dr. Dacic is currently responsible for the information technology (IT) infrastructure of this system, as well as its operational strategy.
On the other hand, Frank Minssieux is the lead developer of the business model that underpins the deployed investment models used in the system to generate signals. He researches new investment models, develops viable models, and maintains existing models.
Both of these system designers gained experience and reputation as a decent exchange-traded fund (ETF) investment pioneers who used a novel trend timing approach to base their decisions on whether to buy or sell ETFs.
They also developed a stock-picking system called TradeGuru, as well as a model for building stock portfolios called FPResearch.
Frank and Serge are also co-founders of the full-service investment advisory firm called MarketTrend Advisors. Some of the technology and knowledge base in TradeGuru, FPResearch, and MarketTrend Advisors have been used in developing the algorithms that power TimingCube.
Likewise, investment advice generated by TimingCube is used by MarketTrend Advisors to advise clients on how to manage their investments.
When building TimingCube, the 2 system designers combined their knowledge and expertise in finance and investment, along with computer science to create software supported by a strong IT infrastructure to provide market advisory services on when to buy and sell stocks.
As mentioned, this market advisory service uses market data from the stock exchange to generate trend timing signals.
This process of data acquisition, data processing, signal generation, and signal relay to the client is automated through a program, and it is this program that is called TimingCube. This program as mentioned is deployed as a web app.
The Main Components of the App
The engine of this app is made of 3 components: a knowledge database, operational models, and stock trading data. The operational models and data are interlinked, with the data being processed by algorithms built upon the operational models.
These components are further explained below:
Retrieval of real-time data
TimingCube uses proprietary, real-time data directly from the NASDAQ stock exchange.
Operational Model for buy/sell signals
This provides a framework that defines how the stock market data is processed so as to identify and determine market trends that can be used to generate signals.
Algorithms drive the model. This allows the model and data acquisition tool to work synchronously to observe current and past market actions to identify a general market trend, and then determine the probability of investors benefiting from the existing trend by buying or selling their securities such as common stock and ETFs.
There are 3 operational models built into TimingCube, and the client chooses which model to use. Each of these operational models is considered an investment model, which is described later.
Investment knowledge database
It contains articles and papers on current trends in the investment market and how to invest. It also contains information on how the subscriber/client can make the most of TimingCube.
The blogposts provide insights on current market dynamics, while the ticker tool allows the subscriber to compare the market analysis of capital gain and loss if when TimingCube is used and when it is NOT used.
This ticker tool allows the client to judge whether using the trend timing signals to make stock purchases or sell stocks is worth it.
Note: As mentioned earlier, TimingCube does NOT tell the client which stocks to buy or sell.
The 3 TimingCube Investment Models
TimingCube offers 3 investment models based on how frequently the trend timing signals are sent, and the targeted types of investors. These models are described below:
Classic Model (Long Term Investing)
This is a mechanical model designed for normal and less active investors who are comfortable with engaging in stock trade for 4 times per year.
In this model, the trend timing signals are sent once in 3-4months, which translates to 4 or 3 signal generations per year.
At times, 5 signals can be generated per year. As mentioned earlier, TimingCube generates the buy, sell, and cash trend timing signals and then sends them to the client; and in this model, this generation is done 4 timers per annum.
It was developed and deployed in 2001 for long-term investors.
It is called a mechanical model because it uses the price-volume of IXIC. The price-volume data is used to calculate the price volatility that defines stock volatility in the market.
Stock volatility simply means rapid changes in stock value, and this is chiefly influenced by the demand-and-supply law, where more stocks (high stock volume) of a specific company decreases the stock price (or share value).
Signals are generated following the market close because this allows the trade volume and day’s range to be factored in market analysis, along with the net change and the market open information, which collectively provide enough data to compute the stock market trend for the day.
The signals issued informs the investor to take a position, which can be explained as follows: the buy signal informs the investor to take the long position (i.e buy and hold), while the sell signal informs the investor to take the short position to dispose of the stocks and then short the QQQ or buy the PSQ or simply leave the account in cash.
The cash signal simply means sell off the stocks, and wait for the next trend timing signal.
As mentioned earlier, TimingCube supports ETF trading, and in this model, the focus is on advising the investor to trade in stocks when the markets are bullish and revert to keeping cash in the account (a safer bet) when the markets are bearish.
When related to types of investors, this model is suitable for both pig investors and chicken investors.
Turbo Model (Frequent Trades)
In October 2015, TimingCube launched the Turbo model. It is based on a mechanical investment model just like the classic model, but it is designed for active investors who seek investment opportunities.
However, it uses the price-volume of QQQ rather than IXIC.
This model is rarely suitable for chicken investors, though they can use it. In this model, TimingCube aggressively scours the stock market trends for opportunities of delivering capital gains to its subscribers regardless of whether the market is bearish or bullish.
In its rapid-fire mode, it can use stock market price-volume data collected over 2 days in a volatile bullish market to generate trend timing signals, while in its slow mode, it uses stock market data collected over a period of weeks or months in a bearish market to generate trend timing signals.
When it issues the buy signal, the investor is expected to take a position of buying the QQQ. On the other hand, the sell signal informs the investor to take the short position to sells the stocks and then choose one of 3 alternatives: short the QQQ, buy the PSQ or simply leave the account in cash.
The cash signal simply means sell off the stocks, and wait for the next trend timing signal. Like the Classic model, signals are generated after markets have closed.
Unlike the Classic model, the Turbo model generates signals at least 4 times per month – and even twice per week – in volatile bullish markets.
World ETF Ranking
If the classic model is used to rank the strongest ETF global markets, then the result is the World ETF Ranking. This means that the market trend analysis done by TimingCube is used to rank the top 5 nations in the world with the best ETFs.
Also, each of the 5 best-performing ETFs is indicated using its ticker symbol, e.g IWM in the USA, EWT in Taiwan, and EWC in Canada.
Like the Classic and Turbo models, signals are generated after markets have closed. Even so, the positions the investor is required to take when the trend timing signals are issued are different as compared to positions taken in the Classic and Turbo models.
The buy signal informs the investor to take the buy and hold the position. In this model, the investor is required to invest in purchasing ETFs in each of the identified top 5 ETFs.
This ranking of ETFs is run each week and results delivered at the end of the week. With the buy signal still in place, one is expected to rebalance his/her position at the end of every month.
When the sell signal is issued, it informs the investor to take the short position to sell existing positions and buy the QQQ.
If the cash signal is issued, it simply means that the investor needs to sell off the stocks, and wait for the next trend timing signal.
As expected, the algorithms used in each of these 3 models differ from each other.
TimingCube Subscriptions & Price Plans
One must subscribe to the TimingCube service to use it. To subscribe, one needs to go to the signup page and fill in the required details. If one wants to test the system, (s)he can choose the free plan, but if one wants to use the system for making stock investment decisions, one must choose one of these paid subscription plans:
- Monthly plan – It is charged monthly @ $49.95
- Annual plan – One pays a one-off annual fee of $499.95
My experience using TimingCube
Timing trades has never been my strong point. We’ve all been there, losing out on higher gains by getting out too early, or exacerbating losses by getting out too late.
For that reason, being able to call upon a system that uses algorithmic data to help make the decision rather than being caught up in the problematic issue of emotion, has been borderline ground-breaking for me.
Don’t get me wrong, you still have to go with your research, experience, and “gut” when using TimingCube, however, the additional advice provided by the app’s timing signals is extremely helpful.
In my opinion, the interface is intuitive and easy to use. Alerts come via email the day before trading, giving you enough time to set out your strategy should you decide to act upon the buy/sell signal.
The knowledge center is also very good, especially for a borderline beginner such as myself, (I’ve only been trading for about a year). There’s some in-depth information there, written by experienced traders and I found a lot of it useful.
The TimingCube Ticker Tool is a good way of seeing the results of historic share movements in line with the recommendations put forward by the TimingCube service.
In essence, it gives you the ability to see how using TimingCube could impact your success trading a particular security. The Ticker Tool compares the performance when used with and without TimingCube signals.
I found this a particularly reassuring way of funneling my trade choices. Although, as we all know, past performance should never be solely relied upon, when making a trade.
Essentially, I have found TimingCube to have a positive impact on my trading successes. For that reason, it has been more than worth the annual fee.
- Related Content: Payhip Review – My Thoughts 3 Months in and Starting to Sell
The Pros and Cons of TimingCube
After several months of using the Inventory Source drop shipping service, here’s my take on the good and bad points:
Timing Cube – A Deep Dive into How it Works
As mentioned, each of the TimingCube models is algorithm-driven. Algorithms define the rules of how the data imported from the stock exchange is to be processed.
This requires the dynamics of the stock exchange to be factored in when building the algorithm.
To start off, the primary focus of the market is on the common stock issued by companies floating growth stock in the stock exchange.
The stock exchange is a secondary stock market where investors and shareholders trade on issued stocks. The primary stock market is where the stocks to be issued are created, and this is usually done by brokers and brokerage firms.
The primary stock market is therefore made up primarily of the stockbroker and brokerage firms. The stockbroker is the licensed intermediary who trades stocks between 2 investors or shareholders.
If this stockbroker is expected to trade a large number of stocks so as to return a profit within a day, then (s)he is called a daytrader.
The business that specializes is trading stocks is called a brokerage firm. It is in the primary stock market where the share value per stock is set before the IPO is launched.
This IPO can be undersubscribed or oversubscribed, and if the later happens, the algorithms can pick it up as a good investment that can be proposed to the client. Even so, the algorithms rarely prioritize in IPOs in the Turbo Model.
In the secondary stock exchange, the share price is set using the auction where the investors agree to buy the share for a price that is based on the profitability of the company based on its dividend payout.
Estimating the profitability of a company
In stock trading, there are 2 good metrics for estimating the profitability of a company:
- Dividend per share (DPS) is the amount of dividend paid out for each share per annum
- The Price-to-earnings ratio (PER) is the current share price divided by earnings per share (EPS) for the year. It is also called the earnings multiple or price multiple.
This leads to a question, how is the EPS calculated? The EPS is calculated as the profit made by the company for a specified period of time, divided by the total number of its common stock.
In TimingCube, the DPS and PER data of publicly-traded companies in NASDAQ are used to assign a weight to top-performing shares so as to identify overvalued or undervalued stocks. This is done by the algorithms of the Classic and Turbo models.
TimingCube also supports trading in bonds that are bought as part of an EFT, mutual, or index fund.
A bond is a special type of debt investment whereby an investor loans a specified amount of money at a fixed interest rate to a company for a specified period of time.
In the stock exchange, the ticker symbol is an alphabetic name (sometimes an abbreviation of a company name) that identifies the stock of a company, e.g, the ticker symbol of Alphabet Inc., is GOOG.
Relatedly, open is the opening price of a stock, while close is the last trading price of the stock on the previous day.
The change of stock price in the previous day is called the net change, while the change of stock price on the current day is called the day’s range. The trading volume is the total number of shares traded in one day.
During the selling of stock, if the shareholder sells the share at a higher price than what (s)he bought it, then the share is said to have accrued a capital gain, with the gain being the profit made.
If the share is sold at a price that is lower than what the shareholder bought it for, then the share has suffered a capital loss. TimingCube is designed to avert capital loss.
Bull and Bear Markets
The stock market can be described as bullish or bearish. In the bull market, the national economy is doing well and share prices in the stock exchange are rising, i.e, the market is charging ahead like a bull.
In the bear market, the national economy is doing bad and share prices in the stock exchange are falling, i.e the market is hibernating like a bear. In the stock market, the investor is the shareholder who is trading in the shares of a company.
The investor can also be described using animal analogies as either a chicken investor or a pig investor. The chicken investor is a low-risk investor who seeks safe investments like preferred shares, bonds, and mutual funds.
The pig investor is a high-risk investor who wants a high return-on-investment (RoI) within a short time, and is ready to risk making a large loss if the investment flops.
The volatility of the stock market
On the landing page of its official website, TimingCube acknowledges the volatility of the stock market. This volatility is created by fluctuations of share prices throughout the day, and from day-to-day.
Share prices fluctuate depending on the demand-and-supply market force, government regulations, speculation and expectations of investors, and flow of funds through international transactions.
The webpage even notes that trades in the stock market can drop by 20% or more in a day. This means that an investor who sells shares during this drop can suffer a considerable loss.
To prevent such losses, TimingCube built an investment advisory system to helps its clients – the investors – from selling stocks during market downturns.
This shows that TimingCube was initially built as an advisory service against selling shares in markets where capital losses are high.
WIN by NOT LOSING
This original trading mantra still persists to this day as seen in its current value statement, which is WIN by NOT LOSING.
This value statement also reveals that TimingCube not only provides advisory against capital loss but also provides signals that can help the investor cash in on capital gains. This simply means that TimingCube can issue sell signals when the markets are bullish.
Also, it is important to remember that trend timing signals are advisory information about when to trade in the stock market or get out temporarily from this market.
As mentioned, TimingCube uses NASDAQ as the source of its stock market data. All the shares of all the companies traded in NASDAQ are used to create a stock market index called the NASDAQ Composite, whose ticker symbol (TS) is IXIC.
Mutual Fund, Index Fund, and Exchange-Traded Fund (ETF)
TimingCube uses the investment model to drive its advisory service, and it encourages its clients/subscribers to diversify their portfolios by acquiring index funds and ETFs.
These models import data from the NASDAQ most-traded equity securities that have been issued by the top 100 best performing non-financial companies listed in NASDAQ.
The performance of share trading of these top 100 companies in NASDAQ creates a stock exchange index called the NASDAQ-100 whose TS is NDX.
If this NDX focuses solely on exchange-traded funds, then it is coded as QQQ. The exchange-traded fund (ETF) is a type of investment fund that holds a basket of stocks, cash currencies, and bonds as a unit of tradable asset in the stock exchange.
Like the mutual fund, it requires investors to pool their funds so as to create an investment fund to purchase securities such as stocks, which are pooled into a single portfolio described as the basket.
To compare the ETF to a mutual fund, the mutual fund is created by investors pooling their resources into the fund, and in exchange the fund creates shares according to how much the investor has contributed.
This fund can also create new shares to sell to investors so as to increase its financial pool. It also allows an investor to sell back shares to the mutual fund at the net asset value of the share.
Basically, this means that investors in a mutual fund can redeem their share value in cash when they sell the share back to the fund manager (the entity managing the mutual fund).
The pooled cash in the mutual fund is then used to buy stocks, cash currencies, bonds, options, and futures. Each of these categories of assets form a basket, e.g all shares form the stock basket, while all bonds form the bond basket.
To relate it to this review, the mutual fund can buy shares (almost exclusively common stock) in hundreds of different companies to build its diversified portfolio using the pooled cash.
To buy these shares, the mutual fund needs to hire a professional money manager, or fund manager, who chooses what stocks to purchase and add to the portfolio.
Active Managed Funds
This form of mutual fund management where hired professionals choose stocks to buy, and then buy them is called active management, and these professionals are paid fees by the mutual fund.
This active management can be eliminated by not hiring professional fund managers, but instead, require the mutual fund to use a fixed formula to make stock purchasing and selling decisions.
This formula is based on an index, which is a representative sample of the stock market. The use of a fixed index-based formula to passively managed mutual funds creates an index fund. This index fund specifies which index it tracks in the market.
The index fund is a type of mutual fund where the investor owns shares in the fund. The mutual fund allows the investor to buy or sell his/her share once a day.
This also applies to the index fund. To overcome this limit, there was a need to create a fund similar to the index fund that allows the investor to sell and buy its shares as many times as possible/allowed in the stock exchange.
This means that the shares of this fund can be bought and sold in the stock market as frequently as common stock. This fund is called the exchange-traded fund (ETF) because it can be traded as stock in the stock exchange.
Like the index fund, it tracks a specific index, or performance of stocks in its portfolio (which is called benchmark tracking). However, unlike the mutual fund which incurs annual capital gains tax in the US, the ETF is only taxed when it is traded, i.e sold in the stock exchange.
If the ETF is designed to perform inversely to its index or benchmark tracking, then it is called an inverse ETF. The first inverse ETF was issued in 2006 by the ProFunds Group, through its financial arm, ProShares. Currently, inverse ETF launched by ProShares are called ProShares Short QQQ or PSQ.
The inverse ETF is well-suited for trading futures contracts.
The investment models provided by TimingCube allows the investor to take a position on whether to buy or sell a mutual fund, index fund, or ETF.
Also, because one of the system designers of TimingCube has been in the ETF market for a long, this system is biased towards ETF over mutual funds. Each of the investment models provided is described below.