Do the markets work like radio?

29th November 2013

Do the markets work like radio?

Carrier Frequencies Found in the Financial Markets

Every wondered how the financial markets work? Today pioneers of the electric market concept, Kenton-Dau LLC announced that they have found ‘carrier frequencies’ in equities, currency and commodities markets. This suggests that the price information of markets may be transmitted in a similar way to the information carried in radio, television and broadband.

“When you tune into a radio station, you are tuning to the frequency at which the station broadcasts its message,” says Branton Kenton-Dau, Principal of Kenton-Dau LLC. “In the markets the process appears to be the same, except that the message being sent on the carrier wave is the price action.”

Kenton-Dau believes that each market has a carrier frequency. Because of its consistency he suggests that investors could trade the carrier frequency as an alternative approach.

“It makes sense to trade the carrier wave of the market rather than its message,” says Kenton-Dau. “It’s more reliable and it is not subject to the ups and downs of the economy or the latest economic report. It has a much better risk/return profile, and once it is known, can be traded going forward without the need for any new information.”

A critical factor in the discovery of carrier frequencies was the effective use of filters in order to separate the ‘message’ of a market’s price movements from the underlying signal. To achieve this Kenton-Dau used data collected by NASA and other agencies about electromagnetic conditions on Earth and emanating from the Sun.

“For example,” says Kenton-Dau, “Once you have the carrier frequency of the Australian-US dollar currency pair the signals you need to trade it remain constant. It is entirely deterministic. Actually, AUDUSD is a good example because until 2001 the long term trend of the pair was down. In 2001 the long term trend reversed. Yet through all that time the carrier frequency has continued to function uninterrupted providing consistent returns with significantly reduced downside risk.”

A growing number of private and institutional investors are taking a closer look at Kenton-Dau’s methods through an Evaluation Program. The program enables members to test the trading signals for the carrier frequency of various markets in real time. “We are looking for 12 months trading record before we launch fully into the discovery,” says the head of one $4 billion Australian group. Further information is available from the company’s website.

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