Monday, May 12, 2014

IPM Trade Matrix - Trade 9 (Part 7) & IPM Trade Matrix - Trade 10 (Part 1)

I have a strange dilemma. I cannot share the actual IPM Model turn dates because they are sent to subscribers, but want to share the trades as they happen. For example, today's rally came at a time which subscribers already knew about. This time frame was supposed to mark a market bottom. 

With today's rally buy signal was generated and downtrend was negated. Therefore, we are now again in an uptrend and will be taking the long trade. IPM trade matrix entered a partial long trade, as soon as shorts were exited. 

Current market action suggests that the uptrend remains intact, at least till next IPM turn window. This turn window has already been emailed to subscribers. 

Lessons Learned from Last 2 Months:

  1. In an re-entry trade (whether upside or downside) always exit half at pre-determined profit objective
  2. If a market makes a higher high or lower low in certain prop indices (outside of IPM turn window), no trade in the opposite direction. This rule would be applicable Aug 2012, Nov 2013, April 2012, April 2013, April 2014.
  3. No Re-entry trade during WIIW (Weekly IPM Influence Window).

In short, we have learned very valuable lessons over the last 2 months, which will help us throughout our trading voyage. Best part is that IPM trade matrix is evolving and is becoming all-encompassing with time. This will be a great asset in future. 

As for trade 10, one of the market rules is that in an uptrend, IPM trade matrix trades long. As a result, IPM trade matrix has gone long. This trade will be exited at either pre-determined profit objective or stop level, which is below yesterday's low. Since we are in uptrend, market would have to trigger a sell signal before a short trade is triggered in the next IPM turn window (already sent to subscribers)

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 - 2/11/14 to 2/22/14) = +9.8%
TRADE - 6: (Long - 2/22/14 to 3/07/14) = +11.7%
TRADE - 7: (Long - 3/18/14 to 4/11/14) = -18.1%
TRADE - 8: (Short - 4/23/14 to 4/28/14) +11%

TRADE - 9:
Bought TZA at 17.35. This is an aggressive short position. Shorts were added on 4/30 and 5/2. Exited at 17.40. Profit =  +0.3%

When: Outside of IPM turn window in a downtrend - Date info e-mailed to subscribers
Next IPM Turn Window: Bottom 
Trigger: SP500 = 1881 (Aggressive), DJIA = 16520 (Aggressive), GDOW = 2519 (Aggressive)
Supporting Indicators: 8/4 Test completed to the downside. Downtrend in effect.  

Profit Target 1: 1830
Profit Target 2: 1770

Stop: SP500, DJIA and GDOW = Above early April high ==> A rally above early April highs in all 3 indices will negate 8/4 test to the downside i.e. trend will change to UP again.
Trailing Stops: - 
Typical IPM Trade Matrix Risk: 1.5%
Actual IPM Trade Matrix Risk: 0.2% (Entry = 1881 , Exit =1885 , Risk = 0.2% )
Risk Reason: Risk is high because we are outside of the IPM turn window. This makes it difficult to time the turn exactly.

Applicable Rule: 
  1. Sell (1/2) at profit objective 1 to minimize draw-down
  2. No Trade in opposite direction
  3. Do not go long or short without trigger to prevent losses by market moving against you.  
  4. Observe stop-losses to minimize draw-downs
  5. If stops are hit ==> Wait on the sidelines for new opportunity near IPM Turn window

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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  1. Are the additional short u added on 4/30 included in "profit"? Or just original shares? make a profit shorting when the market went up...considering u were in 3x. That's very good on ur part.

  2. Made money BC iwm did poorly in that time frame & ipm trade matrix shorted Russell BC it was in a downtrend.. Spy did well and stayed strong.


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