Tuesday, March 18, 2014

IPM Trade Matrix - Trade 7 (Part 1)

Market & Matrix Overview

As we start IPM Trade Matrix - Trade 7, Trade Matrix has been up 6-0 over the last 2.5 months by the grace of almighty God. As most of you statistical wizards know, probability will catch up to the model at some point in time i.e. model will have a losing trade. And as we have more positive trades in a row, probability of a losing trade increases.

IPM Trade Matrix is a combination of multiple market analysis techniques and is developed based on 6 years of exhaustive market research. As mentioned in the Research section, Inflection Point Model is 95% accurate. Therefore, 1 out of 10 trades should be a loser. 

However, there is a possibility that IPM Trade Matrix might have amplified the accuracy of the Inflection Point Model with various risk-mitigation measures that have gone into the development of trade entry/exit criteria. If this is true, that would mean that we will have multiple positive trades in the upcoming months.

In any case, with IPM Trade Matrix our target is to manage risk and undertake high-probability trades for the long-term success. We will continue to evaluate the IPM Trade Matrix and will see if a fund can be launched based on this model. Please feel free to add comments about the model.

Weekly IPM Update: Weekly Inflection Point Model update will be emailed to subscribers on March 23, 2014. This report will be available for non-subscribers at a nominal cost. If interested in this report, email to:  

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
Long TNA at 82.45 (added positions multiple times today as SP500 & DJIA broke above critical levels. More longs will be added if GDOW breaks above critical level) 
Trade was initiated on 3/18/14 based on IPM Trade Matrix Trigger.  

When: Bottom within IPM Turn Window - Date info e-mailed to subscribers
Next IPM Turn Window: Top / Bottom 
Trigger: SP500 = 1861, DJIA = 16300, GDOW = 2470
Supporting Indicators: Up trend based on 8/4 test

Profit Target 1: 1915-1920
Profit Target 2: 1960
TNA target is separate. It might be hit early. If profit target is hit, aggressive trailing stops will be used & we will discuss it on the blog. 
 New low outside of IPM turn window. Since we are within IPM turn window, provisional Stops are at: SP500 = 1838
Trailing Stops: Will be determined next week 
Typical IPM Trade Matrix Risk: 1.5%
Actual IPM Trade Matrix Risk: 1.34% (Entry = 1865 , Exit = 1840 , Risk = 1.34% )
Risk Reason: Geo-political uncertainty. Fed's FOMC meeting on March 19. Within IPM Bottom window

Applicable Rule: 
  1. Sell (1/2) at profit objective 1 to minimize draw-down (aggressive trailing stops at profit objective)
  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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