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Four Percent Model
The following 4-Percent Model was also created by Ned Davis and described in Martin Zweig's book "Winning on Wall Street". With its help it is easy to measure and analyze market timing tool utilizing the weekly close of the Value Line Composite Index.
It reads that a sell signal occurs if the index decreases at least 4 percent. A purchase signal occurs if the index grows at least 4 percent from the latter value. In 1993 - 1998 utilizing this system to the stock market provided a return of 241% versus the buy-and-hold approach which provided a 120%-return.