Thursday, April 24, 2014

IPM Trade Matrix - Trade 8 (Part 2)

Quote of Ali Ibn Abu Talib on Poverty:
If a country is prosperous and if its people are well-to-do, then it will happily and willingly bear any burden. The poverty of the people is the actual cause of the devastation and ruination of a country, and the main cause of the poverty of the people is the desire of its ruler and officers to amass wealth and possessions, whether by fair or foul means.
Note: Updates will be brief in the near future. I have some pain in the arm.

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
Long TZA (Inverse ETF) at 16.24

When: Top within IPM Turn Window - Date info e-mailed to subscribers
Next IPM Turn Window: Bottom 
Trigger: SP500 = 1877, DJIA = 16490, GDOW = 2515
Supporting Indicators: 8/4 Test completed to the downside. Downtrend in effect.  

Profit Target 1: 1820
Profit Target 2: 1760

Stop: SP500 = 1886 , DJIA = 16575 , GDOW = 2525
Trailing Stops: - 
Typical IPM Trade Matrix Risk: 1.5%
Actual IPM Trade Matrix Risk: 0.5% (Entry = 1877 , Exit = 1886 , Risk = 0.5% )
Risk Reason: No clear decline pattern so far. Earnings surprises.

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. I thought profit target 1 was 1820. Why did you exit already?

  2. Sp500 profit objective is 1820 but small caps declined very sharply. This triggered the aggressive trailing stop per IPM trade matrix.

    This afternoon's rally triggered the trailing sell signal. Therefore, trade was Exitted. From a personal perspective, I am looking forward to 1820 and even lower over the next few weeks. But model based trading should not involve emotions.

    Hopefully, we can reenter the short trade in the coming days. It should be a steep decline till next turn date.


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