Our Philosophy

Our investment objective, in essence, has focussed on developing an investment strategy that reduces the importance of the subjective (gut-feel) decision making aspect, and in the process identifies optimal investment timeframes in individual markets to maximise profitability and minimise risk.

Alert Trader utilises 2 technical analysts with combined experience of more than 50 years of technical / analytical research background, where the most promising aspects of numerous techniques and systems have been collated into a workable and consistent investment/trading approach. We believe we utilise the best aspects from several individual predictive techniques, that combine into a mechanical framework with emphasis on timing and money management aspects.

After a combined 50 years observing market price action and the evolving nature of pattern formations, Alert Trader has come to the conclusion that the price fluctuations in markets is not unlike any other dynamic system, where infinite influences combine to manifest themselves in a rhythmical progression with due respect to time and price parameters, ie global economic/market trends can be viewed as a sum of the parts, governed by the fluidity of capital flows driven by the forces of inflation, taxation, financial and political stability and interest rate differentials.

This approach to analysis tends to be based on efficient markets and linear relationships between cause and effect, ie investors react in linear fashion as information is received, they tend not to react in a cumulative fashion to a series of events. This linear view is somewhat entrenched into the rational investor concept because past information has already been discounted in current prices.

Alert Traders' approach tends to respect markets as complex, interdependent systems where apparent randomness is confirmed with determinism to create a statistical order, ie we attempt to reveal patterns and order in what is more generally considered to be almost random, unpredictable price action.

Non-linear systems ie liquid markets, seem to respect critical levels in terms of price and/or time characteristics where in theory an infinite number of equilibriums exist. Market price action does not resolve itself in optimal resolutions we believe, only in probabilities that abruptly change when critical equilibrium levels are exceeded.

One rather simplistic charting technique that identifies possible limits for a trading range and attempts to identify and label each wave structure, was described by a railroad accountant, R.N. Elliott in The Wave Principle around 1933. Elliott waves can loosely be described as fractals, ie they are self-similar where each element of the basic wave structure is composed of similar but smaller wave structures. Using a set of empirically derived observations, extrapolations are made where predictive probabilities can be defined within the overall framework.

Computer technology, of course, allows us to develop predictive techniques more accurately than the basic, subjective approach put forward by Elliott, although the prospect of identifying bullish, bearish or corrective trends in terms of 5 or 3-wave sequences, is still a useful concept, albeit with limitations.

In our own trading and investing Alert Trader has experienced and traded through all types of general market conditions. Crashes, roaring bull markets and long sideways congestion markets.

With the new breed of Stock market vehicles to trade investors and traders have the opportunity to profit from up and down markets. Our experience in risk Management will help you through the process of buying and selling trading and investing.