Q&A

Wise Forecast is a market forecast system created by a group of physicists, mathematicians, computer scientists, experienced financial quants. It is based on the TDT - a revolutionary Temporal Dynamics Theory of market behavior - and developed over the cause of more than 20 years of research and financial market practice.  The TDT bears the fruit of the marriage between the three-thousand-year-old forecast system of the East and the modern science and technology of the West. 

The system dynamically adapts itself to the historical market behavior (up and until the present) and naturally evolves into the future to provide forecasts of likely future trends and turning points. 

The system is based on the assumption that different financial markets are related to each other and intricately responds to and interacts with structured time. As a result, the system can provide a set of coherent and consistent forecasts for all financial markets.

We did extensive back tests of both kinds of Wise Forecast on all markets shown on this website.


In one type of back tests, we drew the forecast charts for many historical time periods and compared them with the actual market price movements following the forecast date. We found out that some of the forecasts are correct, some are wrong, and about 70% of the forecasts are correct.


We also performed the investment industry’s typical quantitative back tests of trading systems: we created trading strategies based on the Wise Forecast and ran back tests on all instruments to obtain performance statistics such as win/loss ratios, annualized returns, Sharpe ratios, max drawdowns. In each test we made reasonable assumptions about transaction costs and trading slippage. We reached the conclusion that the strategies are profitable for all instruments over reasonably long periods of time (e.g. longer than one year). Some instruments consistently perform better than others. The Wise Forecast system can be used to run global macro investment funds to generate relatively high (>15% annual return) and stable (Sharpe ratio>1) returns with unthinkable, trillion dollar capacity!

Wise Forecast is a unique kind of forecast. It focuses on the forecast of market trends and turning points, whereas most other forecasts are about the prediction of price levels (such as support and resistant levels, fair values, price targets, etc.). Because the system doesn’t focus on price levels, the forecast errors are not cumulative in time. In plain English, the accuracy of the forecast does not deteriorate quickly as time goes on; if it misses a turning point or a small trend, it doesn’t affect its ability to correctly predict the next trend and turning point. In case of the conventional price level forecast, at a time when the forecast missed the target by 3 dollars, the error would be carried on to a later time and the forecast quickly becomes even more inaccurate.

 Another difference and a major advantage of the Wise Forecast is that its forecast of a future trend is produced before the trend gets started; it is a “left hand side” forecast.  In a traditional trend detection (trend following) strategy, one realizes that there may be a new trend when it has already started, often missing out a good entry point; we call this a “right hand side” trend detection .

Convectional big-data and AI based prediction of financial markets usually are only good for a directional (up or down) and short-term (e.g., 1 day, or 5 day) forecast. The forecast errors quickly increase with the time horizon to render it useless beyond a few days. In contrast, the Wise Forecast system can produce a zig-zag path-wise forecast that remains accurate many months into the future.

The system provides forecasts of likely market trends and turning points. It is a probabilistic type of forecast.  Historical back tests and actual experiences indicate that on average it is about 70% accurate, which means that the forecast is correct seven out of ten times. In perspective, 70% accuracy is generally better than any market forecast systems known to people as of today. This level of accuracy can give the user a considerable edge.

The Wise Forecast system provides forecasts of likely market trends and turning points for the world’s major financial markets such as equity indexes, bond indexes, foreign exchange rates, precious metals, commodities and energy products. You can see the forecasts for your chosen instruments and decide to buy at the start of a likely up trend and sell (or go short) at the beginning of a likely down trend. You can visit How to use Wise Forecast to learn more.