Tuesday, February 25, 2014

IPM Trade Matrix Update - Trade 6 (Part 2)

Market Overview
Since the beginning of 2014, market has gone net sideways. On the contrary, IPM Trade Matrix has generated ~33% returns. This is exceptional performance at a time when market was very uncertain. 

Going forward, market looks ripe for further rally. If we see sideways market action, which is very possible, over the next few days, more longs will be added until market hits our stop levels.

Overall, it seems like there is a lot of pessimism in the market, as people are trying to short all-time highs. This might be a good development for the bulls. As bull market likes to climb the "Wall of Worry." 

Alongside IPM Trade Matrix, we are working on implementing this trading technique on options trading and also are in process of developing a proprietary Market Meter. According to latest reading, market is bullish based on long-term and short-term proprietary market analysis tools.

These two developments will be shared on the blog over the next few months.

IPM Trade Matrix 2014 Trades

TRADE - 1: (Long) = +2.6%
TRADE - 2: (Short) = +9.3%
TRADE - 3: (Long) - Non IPM Trade Matrix trade -0.2%
TRADE - 4: (Short - 1/31/14 to 2/5/14) +7.25% 
TRADE - 5: (Long) = +9.8%

TRADE - 6: Long
Long TNA at 69.94 ==> 72.75 (added longs)
Trade 6 is the continuation of Trade 5's half position and new positions. Trade 6's longs are initiated on 2/24/14 based on IPM Trade Matrix Trigger. More longs might be added over the next 2-3 days.  

When: Outside IPM Turn window.
Trigger: EW pattern completion. Current pattern suggests that the correction is over or will soon be over. Rally above SP500 = 1851, Global Dow = 2472
Supporting Indicators: Up trend (8/4 did not complete), Next IPM turn window is a Top, Next IPM Turn Window is 1-2 weeks away, Rise has been impulsive in nature

Profit Target 1 (SP500): 1908
Profit Target 2 (SP500): -
*TNA profit objectives might be different than SP500

Stop: Break below SP500 = 1805, DJIA = 15900, GDOW =  2435
Trailing Stops: Will be updated by Friday (2/28)
Typical IPM Trade Matrix Risk: 1.5%
Actual IPM Trade Matrix Risk: 2.4% (Entry = 1850, Exit = 1805, Risk = 2.4% )
Risk Reason: No significant reason for concern. Market needs to hold critical levels and we will see higher levels  

Applicable Rule (There are 7 Rules in the IPM Trade Matrix. Trade 7 Rules will be updated in the next post): 
  1. Do not go long or short without trigger to prevent losses by market moving against you.  
  2. Exit all at profit objective 1 because its the 2nd trade with IPM Turn window. 
  3. No Trade in opposite direction
  4. Observe stop-losses to minimize draw-downs

Note: IPM Trade Matrix Trades will be posted in the first half of 2014. This is an experiment to understand and enhance the capabilities of this Matrix.

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