The “Three Pillars”
of The Edelson Institute’s winning investment approach
Our E-Wave model is built upon Larry Edelson’s proprietary three-tiered approach; the “Three Pillars” of his cycles-based strategy:
Pillar #1 — Exhaustive cycles research
The Institute team uses the regular, rhythmic cycles that have coursed through economies for over 5,000 years to predict the future for the investment markets as well as for individual investments
Human beings tend to buy high out of greed — only after we see others making money … and we tend to sell low out of fear — often after suffering painful losses.
Larry realized that the only way to eliminate this “whipsaw effect” — to stop buying out of greed and selling out of fear — is to completely remove human emotion from financial decision-making.
Beginning in 2014, Larry worked feverishly to eliminate all human interference from his cycles analysis model.
Larry worked with the Institute’s team of visionary computer engineers and artificial intelligence experts to improve his trading model in four careful steps:
First, we gathered all the cyclical information Larry had accumulated during his 40-year career; detailed price data for food, gold, currencies and other essential items going back more than 5,000 years; to the time before the first Egyptian pyramid was a gleam in Pharaoh’s eye.
This data includes detailed price movements in virtually every major empire the world has ever seen; from ancient Egypt, Persia, Babylon, Greece and Rome, through the heights of the British Empire of the 1700s and 1800s.
The second step was to make sure the price cycle chart for every stock, ETF, option and other investment we follow is as current as possible.
To do this, we spared no expense; acquiring massive streams of real-time fundamental and technical data on nearly 20,000 stocks, over 4,000 ETFs and 7,000 mutual funds.
So, in addition to 5,000 years of cyclical price data on each investment class, we also have nearly 30 million current, real-time data points for every investment we follow.
Next, we entered the mathematical models and formulas Larry devised to plot these price cycles.
As the final step, we gave Larry’s model the ability to think for itself. We used state-of-the-art artificial intelligence technology to make sure the E-Wave model learns from every success and every failure.
The result is the E-Wave model: The world’s first and ONLY Artificial Intelligence model based on Larry’s proprietary brand of cycles analysis.
Pillar #2 — Extensive historical validation
We study the history of the economy and the markets to validate those cyclical predictions; to ensure that they are consistent with events that have occurred under similar circumstances.
While adding the artificial intelligence component to our cycles forecasting is state-of-the-art, this second pillar is extremely low-tech; no computers required.
Larry insisted that we personally examine every forecast we make for the economy, the overall stock market and individual sectors to ensure that they make sense from an historical perspective.
Given the serious nature of the recent convergence of these historical cycles — an event that occurred prior to the great crash of 1929 and the Great Depression, Larry has often used the events of that period to validate his cyclical analysis.
Today, an entire team of economic historians here at The Edelson Institute uses this same approach to validate everything being forecast by the economic and investment cycles Larry trusted most.
Pillar #3 — Strict technical authentication
And finally, the Institute Team uses Larry Edelson’s proprietary brand of technical analysis to select precise entry and exit points for every trade.
Knowing whether an investment is about to rise or fall is critical; knowing precisely WHEN to buy and when to sell is even more important.
To identify the optimum entry and exit points for each trade, Larry taught us to rely heavily on technical analysis: The study of key chart patterns.
His primary tool for triggering “buy” and “sell” signals is something called “Andrew’s Pitchfork.”
The Pitchfork approach to technical analysis uses three parallel trendlines to identify levels of support and resistance for each investment.
Together, these trendlines determine the lowest and highest levels each investment is likely to achieve.
Then, armed with this information, it’s easy to identify the optimum entry and exit points; the times when “buy” and “sell” signals should be issued.