Stocks & Commodities Review

Logo for Stocks & Commodities MagazineHurst Signals is an online service published by Sentient Trader. The systems and Sentient Trader software that generate Hurst Signals are all managed by the Sentient Trader team.

For their April 2012 “Cycles Edition”, Stocks & Commodities magazine commissioned one of their contributors, Donald W Prendergast, to write an independent review of our Hurst Signals online web service. Hurst Signals puts trading signals, based on JM Hurst’s Market Cycle Principles, right at traders’ fingertips. If you subscribe to the magazine, you will find the review on Page 52 of the April 2012 edition.

You can read the full content of the article at the bottom of this page. Here are some excerpts from Mr Prendergast’s review.

The Basics

The real value here is the link to the 10 video tutorials that highlight actual trade examples and practical applications of this unique service. The most useful items of advice I found within the tutorials were:

  • Trade with the underlying trend
  • Avoid overlapping red and green cycle target boxes; market is indecisive
  • When a cycle or cluster of cycles is overdue, it may be an opportunity to be more aggressive, using entry signals from shorter frame cycles
  • Early trades will lead to premature stop outs
  • Future line of demarcation (FLD) signals are more reliable than valid trendline (VTL) signals
  • Signals should only be selected from top two-thirds of the available list
  • Choose signals with a minimum profit/risk ratio of 3 : 1(JM Hurst apparently recommended a 2 : 1 minimum)

Does It Really Work?

After playing with the program for several days, in search of a low-risk longtrade set-up, I located a dandy in the 40-day cycle for the emini S&P500 futures (ES). I adapted the data so I could paper trade S&P 500 exchange traded funds (SPY) using a small amount of capital.

I placed a hypothetical buy-stop market order for 100 shares of SPY (good till cancelled at a price of $131.92 on Monday afternoon (January 30, 2012)).

Cycles Identified Correctly

For position and swing traders, Hurst Trading Signals appears to have the potential to be used as a standalone signal generating device or one that could be deployed as a final confirmation tool to complement other technical and fundamental trading methodologies.

Mission Accomplished

Ultimately, my price target of $134.94 for the hypothetical SPY trade entry was hit on Tuesday, February 7, 2012. In fact, as of this writing (February 8), the SPY is now trading at $135.20.

This hypothetical trade gained 2.2% before slippage and commissions; emini S&P500 futures traders using the same long entry, stop, and profit target recos would have made about $1,500 per contract, also before slippage and commissions.

The creators of Hurst Trading Signals know a thing or two about proper price cycle identification, and this weeklong test trade example makes this point clear.

Bottom Line

Overall this is an innovative, no-nonsense approach to cycles trading in the stock index/forex markets and could be an extremely effective profit generating tool in the hands of skilled traders.

Read the full Stocks and Commodities Review here

The URL to this article is offered here with permission from Stocks & Commodities magazine.