STRATEGIC and HIGHER-FREQUENCY TRADING
In the "Services" section, we emphasized somewhat standard, low-key ways to trade with the MIPS models. And, these trading profiles produce much better results than most individuals have ever been able to attain. For example, using MIPS4 trading SPY long and short, this model has produced a gain of 1,400% (with a Max Drawdown of -14%) while the SPY gained only 132% !!!
Most investors (like me) would be elated with that performance, but some want more and are will to work for it. Well, MIPS is there to help, from day traders to options/futures traders.
Even though we DO NOT recommend the strategies below for the average investor, some of MIPS's more sophisticated investors and day traders have shared with us what they have done to perform much better than that above, either by taking more risk or working harder by trading more often. IN ALL CASES THEY ARE RELYING ON THE MIPS MODELS TO PROVIDE THEM WITH THE DIRECTION OF THE MARKET (and it has done so correctly 65--70% of the time in the last 9 years). Many times, these investors are managing only a portion of their MIPS money with the strategies below, and the rest with the recommended MIPS trading profiles in the "Services" section.
Click here for a full definition of "Shorting" or "Going Short"...
- In high-volatility markets (only). we do not recommend using "Inverse Funds" to go Short (better to Short the Index itself) !!!
OTHER STRATEGIES
Hedging:
For Long-Only Investors (Hedging)
1) Instead of shorting, investors with portfolios composed of several stocks with high gains may simply short an equivalent
dollar mount of SPY (or buy SH), to "hedge" the portfolio from big drops.
401K Accounts:
Many investors that buy/hold mutual funds in their 401K account, trade MIPS signals as follows:
1) on Long Signals, make no trades, and
2) on Short Signals, keep the funds that you have long in your 401K; and in another of your accounts, buy an inverse ETF (like SH),
to "hedge" your 401k.
Higher Leverage:
1) Aggressive investors trade more leverage than 1.5x SPY. They may trade:
a) Double leverage (2x) long/short, or
b) Triple leverage (3x) long/short (not recommended), or
c) Double (2x) or triple (3x) leverage long and single leverage (1x) short
Higher Frequency Trading For Long/Short Investors:
1) Trading Options, Futures, etc.
Use the MIPS trends to trade options, futures, etc. "on the money", and renew them until the current trend changes
direction
2) Stock Rotation:
Follow the trend with MIPS, and rotate "high momentum" individual stocks:
a) Use a "stock screener" (Morningstar, VectorVest, OmniTrader, etc.) to identify the best 5-10 top performing stocks,
buy them on long signals, and rotate them very day or week or month, depending on how often you want to trade.
b) Ditto the above to short the worst 5-10 performing stocks on short signals, and rotate them every day or week or
month.
3) ETF Rotation
Ditto #2 immediately above, but with "high momentum" ETFs instead of with individual stocks.
4) Sector Rotation
Trade the "hottest sectors" in the S&P 500 (instead of all sectors, which are included in the Index and the SPY):
a) On long signals, buy the top performing 3-4 S&P 500 Sectors (like maybe technology, health care, financials, etc),
and rotate them every week or month
b) on short signals, short the worst performing 3-4 S&P 500 Sectors (like maybe energy, industrial, materials), and
rotate them every week or month
EXAMPLE
November 5, 2017 - 30 Days Rankings
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Many of the above strategies can increase the number of trades with MIPS signals without violating the trend. If MIPS identifies the trends correctly (which it has done very well in the last 10 years), and if MIPS members are willing to put in the extra effort, they could possibly make more $'s with the above trading strategies than simply holding 1-3 positions (long or short) the entire life of every trade.
We do not track or report the performance of any of the above strategies.
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