The Equity Warning Signal is a selective trading strategy for investors to apply alongside their personalized SBRM selection. The EWS was built for investors with shorter time horizons for their money and feel their primary concern is loss of capital.
When the EWS provides a signal, there is likely high volatility coming in the markets. Often these periods of high volatility can lead to significant downside.
The best way for an investor to beat the market is to sidestep large drawdowns in their portfolio by being out of the market. The EWS has foreseen major downturns and allows investors catch them before it’s too late.
The EWS isn’t perfect. The system has provided signals after which the market has accelerated upwards. In these cases, the EWS was tricked by a consolidating market. Not perfect… yet.